When the roof of a five-unit Melbourne apartment block began leaking badly enough that buckets were the only thing keeping water out of the light fittings, the owners’ corporation had a problem beyond damp ceilings: there was almost nothing in the maintenance fund to fix it. It was, one owner-occupier told VCN, the moment she and her neighbours decided to fire their property manager and run the building themselves. “If I don’t do it,” she said, “the building will fall into the street.”
It is a sentiment VCN has heard repeatedly in recent months, as owner-occupiers across Victoria — particularly in older apartment blocks — reach a breaking point with the state’s commercialised strata management industry and begin reclaiming control of their own buildings.
What is an owners’ corporation and why does it matter? #
For readers unfamiliar with strata law, an owners’ corporation (called a “body corporate” in some other states) is the legal entity that collectively owns and manages the shared parts of a multi-unit building — the roof, foyer, lifts, gardens, car parks and structural walls. In Victoria, owners’ corporations are governed by the Owners Corporations Act 2006 and, since amendments that took effect in 2021, by tightened rules around fee disclosure, maintenance plans and dispute resolution.
Every lot owner in a strata scheme is automatically a member of the owners’ corporation. The corporation can either self-manage or engage a licensed strata manager. For decades, the default has been to outsource: a professional manager handles levies, maintenance quotes, insurance, annual general meetings, and compliance paperwork in exchange for a management fee that, in metropolitan Melbourne, typically runs between $3,000 and $12,000 a year depending on the building’s size and complexity.
The appeal is obvious. Strata law is genuinely intricate, and most apartment buyers do not purchase a unit expecting to become amateur building administrators. But a confluence of pressures — soaring management fees, a cost-of-living squeeze that has made every levy dollar visible, and a string of high-profile building defect scandals — has shaken confidence in the industry.
A system under pressure #
Consumer Affairs Victoria (CAV), which administers the Owners Corporations Act, receives hundreds of complaints each year relating to strata management — ranging from fee disputes and inadequate maintenance to allegations that managers have not convened legally required meetings or have failed to obtain competitive quotes for repair work.
VCN understands that the volume of disputes referred to the Victorian Civil and Administrative Tribunal (VCAT) under the Act has grown year on year since the 2021 reforms came into force, though CAV has not published granular complaint-category data for the most recent financial year. A VCAT spokeswoman confirmed to VCN that owners’ corporation disputes remain one of the tribunal’s busier civil lists.
The industry’s own peak body, Strata Community Association (Victoria), acknowledges there is variation in service quality across its membership and has pushed for stronger licensing requirements. Currently, strata managers in Victoria must hold a real estate agent’s licence, but there is no specialist strata licence — a gap that consumer advocates have been pressing government to close for several years.
The case for self-management #
Self-management is entirely legal in Victoria. Small schemes — those with fewer than four lots, or where the total annual levies fall below a prescribed threshold — are not required by law to have a professional manager at all. Larger schemes can also choose to self-manage, provided they comply with the Act’s requirements around record-keeping, annual general meetings, maintenance plans, and the handling of funds.
For owner-occupiers in small older buildings, the financial case can be compelling. Owners in one six-unit Northcote block told VCN that after dismissing their strata manager in late 2023, they redirected what had been a $7,200 annual management fee into their maintenance fund. Within eighteen months, they had accumulated enough to commission a long-overdue electrical upgrade — work their previous manager had quoted but never progressed.
“We basically paid someone for years to send us invoices and book the occasional tradie,” one owner said. “When we started doing it ourselves, we realised how little had actually been done.”
Not every self-management story is a success, however. VCN has also spoken to owners in larger Melbourne buildings who attempted to go it alone and found themselves overwhelmed by the administrative load — particularly around insurance renewal cycles, compliance with the 2021 maintenance-plan obligations for tier-one schemes, and navigating disputes between neighbours without a neutral third party to absorb the tension.
The legal risks owners may not see coming #
Strata lawyer Annelise Pryor, who practises in Melbourne’s CBD, told VCN that self-managing owners frequently underestimate two areas of legal exposure. The first is insurance. The Owners Corporations Act requires prescribed schemes to hold public liability insurance of at least $20 million, and failure to maintain compliant cover can expose individual lot owners personally. The second is the maintenance-plan obligation introduced in 2021, which requires tier-one schemes (broadly, those with annual fees above $200,000) to hold a formal, independently prepared maintenance plan and a funded maintenance fund matched to it.
“The reforms were designed to stop what happened in New South Wales with Mascot Towers and Opal Tower from happening here — buildings where the maintenance fund was essentially a fiction,” Ms Pryor told VCN. “But those same obligations create real administrative complexity for a volunteer committee that’s already flat out with their day jobs.”
She said VCAT had seen a rise in intra-building disputes where self-managing owners had fallen behind on levy collection — particularly in buildings with a mix of owner-occupiers and investors, where the latter group sometimes resist levies that benefit the former more directly.
What Victorian law says owners can do right now #
Under the Owners Corporations Act 2006, an owners’ corporation can terminate a strata management agreement by ordinary resolution at a general meeting, provided the notice requirements in the agreement and the Act are met. Most standard management agreements include a notice period — commonly 30 to 90 days — and some include early-termination fees. Owners considering this step should review their management agreement carefully before calling a general meeting, and may wish to obtain independent legal advice.
Consumer Affairs Victoria’s free information service can explain owners’ rights under the Act without providing legal advice. CAV’s website also hosts plain-English guides to running an owners’ corporation without a professional manager — including template AGM procedures, model rules, and guidance on levy-setting and maintenance-fund requirements.
VCAT’s owners’ corporation list is available to resolve disputes between lot owners, or between owners and a manager, where internal negotiation has failed. Application fees apply but are modest relative to legal costs.
The bigger picture: an industry that needs reform #
The push by owner-occupiers to reclaim their buildings is, in some respects, a symptom of a sector that has grown faster than the regulatory framework designed to govern it. Victoria now has more than 110,000 registered owners’ corporations, according to Land Use Victoria data, managing everything from two-unit subdivisions in regional towns to skyscraper towers in Melbourne’s Docklands precinct. The same licensing framework — a standard real estate agent’s licence — applies to a sole operator managing three small blocks and to a national firm managing dozens of high-rises.
Consumer advocates, including the Owners Corporation Network of Victoria, have long argued that a specialist strata licence with mandatory continuing education, a dedicated professional standards body, and a statutory compensation fund for clients of insolvent or delinquent managers is overdue. The state government has not committed to a timeline for reform on that front.
In the meantime, owner-occupiers in buildings with leaking roofs, empty maintenance funds, and disengaged managers are making their own decisions — one Zoom call at a time.
Resources and support: Readers experiencing disputes with strata managers or within their owners’ corporation can contact Consumer Affairs Victoria on 1300 558 181 or visit the CAV website. VCAT’s owners’ corporation list can be accessed at vcat.vic.gov.au. If you have information about misconduct in the strata management industry, contact Crime Stoppers on 1800 333 000 or report online at crimestoppersvic.com.au.
