VIC Do I Have to Form a Owners Corporation?

[Davo Stevo]

Hi all,

Hopefully a simple question for some of you out there!

I am looking at creating a small (3 units) development on a single title/block of land. This is likely to consist of two 2 bedroom units and one 1 bed unit. If I retain ownership of all 3 units, and the land, and let the units out, do I have to form a owners corporation for my tenants?

Obviously I will have full responsibility to ensure the maintenance of the units and any common areas are kept up to scratch as they will be entirely my property.

I have found plenty of information pertaining to 2 unit developments, and the subsequent reduced governance requirements, however nothing answers the question if I were to retain ownership of all the units.

In fact, does the number of units have any bearing if the landlord/land owner were to retain ownership?

Many thanks in advance,

 

[Rod]

If you are subdividing the title - yes.

If you are not subdividing - no.

Recommend you get legal advice as there are pros and cons of each. The fact that you are asking the question is evidence of the need for good legal advice

 

[Davo Stevo]

Hi Rod. Thanks for your response. I will do that.

 

[Matthew Karakoulakis]

Hi Davo,

I agree with Rod that there are pros and cons of both subdividing the title and not subdividing the title. For instance, it is arguable that two separately titled blocks can generate better valuation than a single-titled block with multiple dwellings.

According to Consumers Affairs Victoria, an owners corporation is created automatically when a plan of subdivision containing common property is registered at Land Victoria.

Moreover, Owners Corporations have duties and powers outlined in the Owners Corporation Act 2006. Further, the Owners Corporations is responsible for managing, administering, repairing and maintaining the common property.

Please feel to free to contact us by clicking on the link below or alternatively you can send an email to [email protected] to schedule an appointment.

 

[Luiza]

Hi all,

Hopefully a simple question for some of you out there!

I am looking at creating a small (3 units) development on a single title/block of land. This is likely to consist of two 2 bedroom units and one 1 bed unit. If I retain ownership of all 3 units, and the land, and let the units out, do I have to form a owners corporation for my tenants?

Obviously I will have full responsibility to ensure the maintenance of the units and any common areas are kept up to scratch as they will be entirely my property.

I have found plenty of information pertaining to 2 unit developments, and the subsequent reduced governance requirements, however nothing answers the question if I were to retain ownership of all the units.

In fact, does the number of units have any bearing if the landlord/land owner were to retain ownership?

Many thanks in advance,

Hi
If you subdivide the land and your surveyor draws a plan of subdivision with common property, then there will be an owners corporation, whether you want it or not. However, the owners corporation may remain inactive if it does not have an annual general meeting, fix any fees or holds any insurance.
And yes, even if you retain the ownership of all the units, you must comply with the legislation.
But really, don't have sleepless nights over it - it's not as bad as it sounds. There is a lot of information on this subject on the Consumer Affairs website: Owners corporations (formerly body corporate).