Owners Corporation issues

Frequently Asked Questions

We advise our clients on rules, requirements and obligations under Owners’ Corporation Laws. We can also represent you in any disputes with Owners’ Corporations.

What properties are required to have an Owners Corporation?

If a subdivision contains common property (such as a shared driveway or car park), then an Owners Corporation is automatically brought into existence upon registration of the plan. An Owners Corporation may also exist to manage shared services such as pipes or cables.

What must an Owners Corporation do?

An Owners Corporation must:

  • Maintain the common property including conducting repairs
  • Hold public liability insurance for the common property
  • Hold reinstatement and replacement insurance over any structures on the common property
  • Raise fees from the lot owners to meet financial obligations
  • Prepare financial statements and keep financial records
  • Hold annual general meetings

Two lot subdivisions are exempt from the requirements to hold insurance, prepare financial statements or hold annual general meetings.

Does the Owners Corporation’s insurance cover the structure of my unit/apartment?

An Owners Corporation is required to hold insurance over structures that are on the common property. In apartment buildings, the Owners Corporation usually owns the structure of the entire building, and you only own the inside of your apartment (which is called owning to the ‘interior face’ of the wall).

If any part of the common property is above or below a lot, such as an apartment building with a basement car park, then the Owners Corporation is also required to hold insurance over the structure of the building.

It is more complicated in the case of units. Your plan of subdivision or strata plan will generally state the location of the boundaries of your lot. If they are to the ‘interior face’ of the wall, the Owners Corporation is responsible for insurance of the structure. If the boundaries are to the ‘exterior face’ of the wall, you are responsible for insurance of the structure.

However, it is still a good idea to insure your property even if the Owners Corporation is legally required to insure as you cannot control whether the Owners Corporation has this insurance or the terms of the policy.

Questions? Ask our Property Law team.

Teagan Howard
Deceased Estates
03 9870 9870