What are owners corporation rules?
Owners corporation rules define how common property and lots should be managed and used. Practical issues such as parking, pets, and noise restrictions are covered in these rules, plus directives on any other activity that could create property damage or interfere with the quiet enjoyment of the premises.
Owners corporation rules allow an entity to customise its governing restrictions and guidelines. If an owners corporation doesn’t make its own rules, then the model rules that appear in the Owners Corporation Regulations 2007 (Schedule 2) will instead be used.
Any owners corporation rules created must be registered with Land Victoria. If they’re not registered, the corporation rules will be discarded in favour of the model rules. New rules must also be communicated to lot owners and tenants. Rules will then be enforced by application to VCAT which can inflict penalties when rules aren’t followed.
Why are owners corporation rules important?
Owners corporation rules are important because they ensure a multi-occupancy property is well managed to keep a high value in the building and grounds, and residents can enjoy it safely without disruption.
Maintenance is always an issue with properties, and when common areas are involved, there needs to be agreement on how this will be handled. By having existing rules, fewer disputes occur as owners and occupants have guidelines to refer to.
Voting on how common areas are to be used and enjoyed also creates a sense of equitable community. Owners corporation rules offer a sense of security by providing instruction on issues such as noise, parking and fire safety.
How to draft owners corporation rules
There are a few things to consider when drafting owners corporation rules. First of all, you must check that there are no existing rules that duplicate the proposed new rule. You need to revoke any previous rules before you proceed and then record them with the plan of subdivision. You cannot make rules that are unclear or unreasonable and you will also need a complaints procedure.
Your rules must:
- Relate to the management of common property or a lot
- Not discriminate against anyone unfairly
- Not conflict with any legislation, such as:
- Residential Tenancies Act 1997
- Disposal of Uncollected Goods Act 1961
- Environment Protection (Residential Noise) Regulations 1997
- Domestic (Feral and Nuisance) Animals Act 1994 and local council laws
- Part 7A, Road Safety Act 1986
- Public Health and Wellbeing Act 2008 and the Public Health and Wellbeing Regulations 2007
How to change owners corporation rules
The first step for changing or adopting new owners corporation rules in Victoria is to convene a general meeting or organise a postal ballot. An agenda must be provided to lot owners 14 days before the meeting or ballot.
The procedure for adopting the new rules depends on how many people vote in the affirmative. If 75% or more voted for the new rules, the owners corporation passes a ‘special resolution’, acknowledged in the general meeting minutes or ballot outcome committee meeting. The corporation passes an interim special resolution if 50% or more voted in favour. This outcome is communicated, along with meeting minutes, to lot owners 14 days after the ballot closure.
The new rules come into force only after 29 days if no petition numbering more than ¼ of the lot owners has been made to the secretary. If such a petition occurs, the rules do not come into effect, and the model rules still stand.
The importance of good legal advice
Creating owners corporation rules is a complicated process involving many considerations. A balance needs to be achieved between individual freedom and community enjoyment of common areas; all the while, certain legal processes must be followed. At P&B Law, we are well placed to advise you on creating your owners corporation rules customised to your specific situation.
Contact us today to get started.