VIC: Q&A Seeking an Order for Works to Proceed

This question has been submitted by a VIC lot owners asking about seeking an order for works to proceed.

Table of Contents:

• QUESTION: When an Owners Corporation Manager submits a maintenance request to a supplier, what information should they supply? What checks should be carried out and what insurance should be in place?
• QUESTION: What is the most effective and cost-efficient way under the Owners Corporation Act to secure funding, selection of contractors and schedule of works when a 26% unit owner seeks to delay and avoid making the commitment?

Question: When an Owners Corporation Manager submits a maintenance request to a supplier, what information should they supply? What checks should be carried out and what insurance should be in place?

Answer: When we receive maintenance requests from Owners Corporation Managers for small maintenance jobs, most committee members and managers aren’t aware of the requirements.

We receive lots of maintenance requests from Owners Corporation Managers for small maintenance jobs, sometimes with minimal scopes of work being supplied. Maintenance works over $5,000 fall under the Domestic Building Contracts Act 1995 and a Major Domestic Building Contract needs to be entered prepared between the builder and the owner / the Owners Corporation (OC). However, most committee members and managers aren’t aware of these requirements.

Works over $16,000 will require a registered builder to perform the works and also provide Home Warranty Insurance for the works undertaken, for residential buildings 3 levels and under the Insurance certificate is issued by the Victorian Managed Insurance Authority – VMIA a state government run agency. Once the cover is affected, VMIA will forward the Warranty Insurance Policy directly to the owner.

Before committing to any works being undertaken, the OC must ensure the builder has the right qualifications and is registered in the appropriate category for the works. All builders need to be registered with the Victorian Building Authority – VBA. If the builder is in fact registered then the next step is to check if they are qualified to undertake certain works. For example, there are limitations on builders CCB-L what does it mean? The ‘L” stands for ‘Limited’ which means the builder is Limited in only undertaking certain works for example a CCB-L (Corporate Commercial Builder – Limited) or CDB-L (Corporate Domestic Builder – Limited) may only be restricted to undertaking works on low rise buildings. This means they cannot carry out works on buildings that are higher than 15 metres, that is generally buildings up to 5 levels.

Always try and deal with builders that hold either a CDB-U (Corporate Domestic Builder – Unlimited) for residential works and a CCB-U (Corporate Commercial Builder – Unlimited) for non-residential buildings or residential buildings where they are over 5 levels. Also, check the builder’s registrations on the VBA website to ensure they are current and registered. The search is free.

Paul Cummaudo
Roscon Group
E: [email protected]
P: 1800 767 266

This post appears in the October 2021 edition of The VIC Strata Magazine.

Question: What is the most effective and cost-efficient way under the Owners Corporation Act to secure funding, selection of contractors and schedule of works when a 26% unit owner seeks to delay and avoid making the commitment?

Answer: This depends on the value of works. I suggest that an application is made to VCAT seeking an order for works to proceed.

This depends on the value of works.

If the works require funding of an amount less than twice the total amount of the current annual fees then an ordinary resolution is required to levy extraordinary fees to meet the cost of the works.

To pass an ordinary resolution you will need the majority of owners voting in favour to proceed.

There are two ways to achieve this; at a meeting or by ballot. Both require issuing documentation to Lot owners (via post or email) and therefore the cost would be similar.

If the works require funding of an amount more than twice the total amount of the current annual fees then a special resolution is required to levy extraordinary fees. If the owner holds 26% of both the total lot entitlements and total votes then you won’t be able to achieve a special resolution.

In this situation I would suggest that an application is made to VCAT seeking an order for works to proceed.

Gregor Evans
The Knight
Email
P: 03 9509 3144

This post appears in Strata News #487.

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