‘Dog’s breakfast’: Strata overhaul splits flat owners and industry

Apartment and townhouse owner advocates have lashed a long-anticipated state government blueprint to overhaul Victoria’s strata sector, saying it “insults the intelligence of apartment owners”.

While the government response to the independent expert panel review into the Owners Corporations Act drew a furious reaction from lot owners on Wednesday, the corporate strata management industry warmly welcomed the changes, praising the state for holding back on insurance commission bans.

Susan Chandler, general manager of Strata Community Association Victoria – the lobby group for professional strata management firms – backed the government’s decision to pause a recommended ban on lucrative insurance commissions and broker fee sharing until more research was done.

“SCA (Vic) has consistently advocated that the focus of reform should be on transparency, informed consent and consumer choice, rather than an outright prohibition on any particular remuneration model,” Chandler said. “We therefore welcome the government’s decision to undertake further market impact analysis before making a determination.”

The expert review – carried out by former Labor consumer affairs minister Marsha Thomson, economist Karen Chester and prominent strata lawyer David McKenzie – was given to the government six months ago and made 51 recommendations.

The government, in its response, supported 17 of the 51 in full. The rest were either categorised as supporting “in part”, “in principle” or not at all.

On Wednesday, the government introduced legislation to parliament to enact a first tranche of changes, including giving unit owners struggling to pay their owners’ corporation fees a standardised right to a payment plan.

The new laws will also lower the threshold for enforcement of basic rules in owners’ corporations from 75 per cent of all owners in a building back to 50 per cent or a simple vote of the smaller appointed committee, and loosen the voting threshold for owners to sell an older building for redevelopment.

However, among the 34 recommendations not fully committed to or those the state wants further time to consider were major ticket items owners’ advocates have long called for, including banning insurance commissions and other kickbacks, and banning developers and strata managers from harvesting proxy votes.

Advocates have also long called for an independent strata commissioner, matching NSW. Instead, the review proposed a new dedicated unit set up within Consumer Affairs – a recommendation the government said it was open to but was subject to funding.

On Wednesday,