Read our jargon buster

Understanding body corporate management can be overwhelming due to the many technical terms involved. To help simplify things, we've created this handy guide that explains some of the most common terminology.

Accessory Unit 

An accessory unit is a unit that is associated with one or more principal (occupiable) units and is intended to be used for a purpose that complements the principal (occupiable) unit. Examples include car parks and storage lockers.

Administration Levy

Administration Levies are a fee paid by Lot owners and typically cover administrative expenses such as insurance, accounting, maintenance, gardening, cleaning and repairs and maintenance. The total Administration Levies are based on the annual budget which is approved by all owners at the Annual General Meeting. An individual Lot owner's contribution towards the Administration Levy is based on their ‘Units of Liability,’ as per the Plan of Subdivision.

Annual General Meeting (AGM)

The Annual General Meeting (AGM) is a mandatory gathering of all members of the Owners Corporation to discuss and decide on matters affecting the Owners Corporation. In Victoria, AGMs must be held at least once a year, within 15 months of the previous AGM. These meetings address topics such as financial reports, insurance, budgets and the election of committee members.

Annual Levy (also called Body Corporate Levy or Fees)

The annual levy is the fee that each Lot owner must pay to ensure that the Owners Corporation can pay its expenses. Annual Levies are typically broken into ‘Admin Levy’ and ‘Maintenance Levy’ – please see definitions for both in this Jargon Buster. 

Committee

The Committee is a group consisting between three (3) and seven (7) owners, elected at the Annual General Meeting to govern the Owners Corporation. The Committee has the delegated authority to make most decisions on behalf of the Owners Corporations day-to-day operations and liaises with the Owners Corporation Manager.

Common Property

Common property is marked on the Plan of Subdivision and is comprised of all land that is not owned by an individual private lot owner. Examples include shared driveways, elevators, hallways, stairwells, and recreational areas. In some cases, exterior walls, the roof and airspace above the property can also be considered as common property if defined in the Plan of Subdivision.  Each Lot owner shares responsibility for maintaining these areas.

Lot Entitlement

Lot entitlement is outlined in the registered Plan of Subdivision and refers to a Lot owners share of ownership of private property and determines your voting rights. 

Lot Liability

Lot liability is outlined in the registered Plan of Subdivision (POS) and represents the share of Owner's Corporation expenses that each Lot owner is expected to pay. Your individual levy is calculated by the number of lot liabilities outlined in the POS.

Maintenance Levy 

An Owners Corporation that has an approved Maintenance Plan (see definition below) must establish a maintenance fund in the name of the Owners Corporation. 

Maintenance Fund Levies are a fee paid to the Owners Corporation to cover future planned maintenance in accordance with the Maintenance Plan. It ensures sufficient funds are available for major repairs and capital expenditure over time. Examples include roof replacements, lift upgrades, and asset replacement. 

An individual Lot owner's contribution towards the Maintenance Levy is based on their ‘Units of Liability,’ as per the Plan of Subdivision.

Maintenance Plan 

As your building ages, it will require regular upkeep and maintenance to help retain the value of the building. A Maintenance Plan will assist in minimising the need to raise special levies to cover major works. 

An Owners Corporation Maintenance Plan must include:

  • Major capital items for repairs and/or replacement over the next 10 years
  • The present condition of those items
  • When the items or components will need to be repaired or replaced
  • The estimated cost of their repair and replacement
  • The expected life of those items or components once repaired or replaced

An Owners Corporations with more than 50 Lots must prepare and approve a Maintenance Plan. Owners Corporations under 50 lots are not required to prepare a Maintenance Plan but may choose to do so.

Mediation

Mediation is a process used to resolve disputes between parties with the help of an independent mediator. The mediator facilitates discussion to help the parties reach an agreement without making decisions on their behalf.

Model Rules 

Rules set out in the Owners Corporation Regulations 2018 relating to the management and enjoyment of common property and is applicable to all Owners Corporations.

Owners Corporation 

The functions of an Owners Corporation (OC) are to manage and administer the common property of residential, commercial, retail, industrial or mixed-use property development. As a Lot owner, you are automatically a member of the Owner's Corporation, along with other lot owners. The Owners Corporation Managers administer the Owners Corporation, including financial management, compliance and ensures that all legislative requirements are met. 

Owners Corporation Manager 

An Owners Corporation Manager (OCM) appointed to assist the Owners Corporation in managing day-to-day affairs and ensuring all legislative requirements are being met. This includes regularly communicating with the Committee, providing advice and direction, organising meetings, preparing financial statements, collecting levies, and coordinating repairs. Services are tailored to meet the unique needs of each property.

Owners Corporation Meetings

Owners Corporation meetings are convened to discuss and make decisions on matters affecting the Owners Corporation, such as maintenance, insurance, levies, and financial affairs. There are three main types of meetings: the Annual General Meeting (AGM) and Special General Meeting (SGM) and Committee Meetings.

Owners Corporation Rules

These are the rules that all Lot owners must follow to prevent disputes and maintain order within the development. They cover various aspects of living and working in the community and are essential for governance. If an Owner’s Corporation does not have a set of registered rules, model rules outlined in the Owners Corporation Regulations 20018 will apply. 

Private Lot 

Private Lot is outlined in the Plan of Subdivision and owned exclusively by an individual Lot owner and not part of the common property.

Private Property

Private property refers to areas of a Lot title development owned exclusively by an individual Lot owner, as outlined in the Plan of Subdivision. It is not part of the common property and is the responsibility of the Lot owner to repair and maintain.

 

Plan of Subdivision (POS) 

A Plan of Subdivision depicts the break-up of a piece of land, showing parcels of land, commonly called ‘lots’, that can be sold separately. It defines and governs the ownership of land, buildings and airspace, setting out private lots, common property and each Lot owner’s voting entitlements and financial contributions. The Plan of Subdivision is registered at Land Use Victoria.

Proxy

A proxy is a designated person who represents a Lot owner at a meeting when that person cannot attend.

Quorum

A quorum is the minimum number of members required to conduct a meeting. For a meeting to proceed, at least 50% of the units must be represented. If a quorum is not achieved at a meeting, the meeting may proceed but all resolutions are interim resolutions for a period of 28 days.

Registered Rules 

Registered Rules are legally binding rules that are set by the Owners Corporation and are essential for the operation of the building. These rules are lodged and registered with Land Use Victoria.

Special General Meeting (SGM)

An SGM is a meeting convened to address urgent matters that cannot be resolved by the Committee alone and cannot be delayed until the next AGM. SGM’s can be convened as follows: 

  • Chairperson of the Owners Corporation Committee; or
  • the Secretary of the Owners Corporation Committee; or
  • a Lot owner nominated by lot owners whose lot entitlements total at least 25% of all Lot entitlements; or 
  • the Owners Corporation Manager who is either
    • Acting on behalf of the authority of the Committee 
    • Nominated by Lot owners whose Lot entitlements total at least 25% of all Lot entitlements
    • In the absence of an Owners Corporation Committee 

Special Levy

A Special Levy is a fee raised by the Owners Corporation body corporate to cover extraordinary items of expenditure, such as funding a remediation project.

Special Resolution

A Special Resolution is required when the Owners Corporation makes significant decisions, such as Leases and Licences and significant alterations to common property. To pass a Special Resolution, 75% of the total Lot entitlements for all the lots affected by the Owners Corporation must support the motion. 

Strata Title 

Each Lot in an apartment or multi-unit complex is individually owned by the Lot owner. In addition, all the owners in the building or complex have shared ownership of the common property, which is maintained by an Owners Corporation.


Trust Account

A trust account holds funds of Owners Corporation members and is kept separate from other funds to ensure proper financial management. 

Owners Corporations Act 2006

The Owners Corporations Act 2006 is the legislation that governs Owners Corporations in Victoria, providing the legal framework for managing strata title developments.