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Types of managers – volunteer and paid professional
Your owners corporation (formerly body corporate) can appoint a manager to help handle day-to-day affairs.
There are two types of manager:
- a volunteer manager, who does not have to be registered or insured
- a paid professional, who must be registered and have professional indemnity insurance. This includes a person or company who is rewarded for managing an owners corporation by incentives such as free accommodation, lower fees or discounted use of facilities.
Volunteer and paid registered managers have the same legal obligations.
An owners corporation:
- does not abdicate responsibility when it appoints a manager. It is legally responsible for actions taken by a paid or volunteer manager on its behalf.
- may appoint a manager to carry out any powers or functions it is able to delegate at a general meeting. This appointment must be in writing or through a contract of appointment in the approved form
- usually delegates powers to a manager in a contract or an instrument of delegation, but some owners corporations may be self-managed by a committee or a lot owner who has been delegated powers on a voluntary basis.
Registered managers – public register
A person or company paid or rewarded for managing an owners corporation must be registered with the Business Licensing Authority and insured. If you are appointing a professional manager, you can only deal with a registered manager.
You can check a manager’s registration on the Business Licensing Authority’s public register of owners corporation managers. This register includes details of any orders made against a manager.
Note: Restrictions on registering a manager who has a criminal record came into effect on 1 December 2021.
Most professional managers are members of a professional body and may use industry-endorsed documents to ensure they are properly appointed and have appropriate powers. These documents may include an approved ‘Contract of appointment’.
A manager’s contract of appointment is a contract between the owners corporation as a legal entity and the manager or their company. This means:
- it is the owners corporation that is subject to the contract, not individual lot owners
- individual lots owners are bound by the contract as members of the owners corporation.
All registered managers must:
- be appointed by an instrument or contract of appointment in the approved form
- act honestly and in good faith. They must not improperly use their positions to gain an advantage for themselves or any other person
- take reasonable steps to ensure that goods and services which they obtain are on competitive terms and prices
- not pressure any member of the owners corporation to influence a vote or election held by the owners corporation
- disclose in writing any commission, payment or other benefit to the chairperson of the owners corporation
- carry professional indemnity insurance for the prescribed amount
- hold all money on behalf of an owners corporation on trust
- account separately for money held for each owners corporation it manages
- comply with a request by the owners corporation to provide copies of financial statements of bank accounts for any period within the last three years
- report to the owners corporation at each annual general meeting
- if there is a committee, report to the committee as required
- lodge an annual statement with the Business Licensing Authority.
If you want to register as a manager, view our Owners corporation managers section.
Restrictions on the registration of managers
From 1 December 2021, there are restrictions on registering a manager who has a criminal record.
Anyone who has been convicted or found guilty of the following offences within the last 10 years is not eligible for registration.
- An offence involving fraud, dishonesty, drug cultivation or trafficking.
- An offence involving sexual slavery or servitude.
- An offence involving child pornography or violence.
- An offence connected with sex work or a sexual offence.
- An offence committed outside Victoria that would constitute an offence referred to in any of the examples above, if it was committed in this state.
The offences must have been punishable by a prison term of three months or more when the person was found guilty or convicted.
A person can apply to the Business Licensing Authority for permission to be registered as an owners corporation manager if they have committed one of the above offences. The Business Licensing Authority may grant permission for the applicant to be registered as an owners corporation manager if it is satisfied that it is not contrary to the public interest to do so. If the Business Licensing Authority permits the registrations, it may also impose conditions on the person’s registration to protect the public interest.
The outcome of permission applications will be contained on the register of owners corporation managers.
If an owners corporation manager (or if the manager is a corporation, a director of the corporation) is convicted or found guilty of any of the offences above, and has not applied to the Business Licensing Authority for permission to continue to be registered, their registration will be automatically cancelled 30 days after the conviction.
Professional indemnity insurance
A registered manager must be covered by professional indemnity insurance, and notify the Business Licensing Authority if they cease to be covered. Their registration will be automatically cancelled 30 days after coverage ceases.
The manager coordinates the owners corporation’s daily affairs, including collecting and banking fees, arranging property maintenance and, in certain circumstances, organising meetings.
A manager can usually:
- prepare and distribute notices, agendas and minutes
- attend to correspondence
- arrange quotations for repairs and maintenance
- take out and maintain required insurance
- pay all invoices
- prepare and distribute financial statements and budgets
- provide owners corporation certificates
- keep and maintain the owners corporation register
- keep and maintain records
- arrange audits and reports required by law
- prepare and implement a grievance procedure, and
- ensure compliance with the Owners Corporations Act 2006, the Owners Corporations Regulations 2018 and rules.
An owners corporation manager’s legal powers and functions depend on whether the owners corporation has a committee.
If there is no owners corporation committee
If there is no committee, then the manager’s role is:
- delegated by the owners corporation at a general meeting
- to carry out his or her duties, powers and functions
- to report to the owners corporation.
If your owners corporation has a committee
If your owners corporation has a committee, the manager’s role is:
- set out in the rules of the owners corporation
- determined or delegated by the owners corporation at a general meeting
- determined or delegated by the committee
- to report to the committee as required
- to report to the annual general meeting.
Changes to duties of a manager
The duties of an owners corporation manager have been expanded. Managers must:
- ensure any goods and services they procure on behalf of the owners corporation are competitively priced and are procured under competitive terms.
- not exert pressure on any member of the owners corporation to try and influence the outcome of a vote or election.
- give written notice to the chairperson disclosing any commission, payment or other benefit they are entitled to receive under a contract to supply goods owners corporation or services to the owners corporation.
Upon request from an owners corporation, the manager must provide copies of financial statements for bank accounts that contain money they hold on trust on behalf of the owners corporation, as soon as practicable. This applies for any period within three years immediately preceding the request.
A manager can only hold money on trust on behalf of separate owners corporations in the same bank account if:
- each owners corporation is on the same plan of subdivision and has consented to the money being held in the same account, or
- the bank account is a statutory trust account held by:
- a licensed estate agent under the Estate Agents Act 1980
- an Australian legal practitioner within the meaning of the Legal Profession Uniform Law (Victoria), or
- a licensee under the Conveyancers Act 2006.
Money held by a manager on trust on behalf of an owners corporation includes any interest earned.
A manager must disclose any beneficial relationship they have with a supplier of goods and services they propose to enter into a contract with on behalf of the owners corporation. They must disclose this in writing to the chairperson as soon as they become aware of the beneficial relationship.
They will not be in breach of their duties if they:
- could not have reasonably been expected to be aware of the beneficial relationship before a contract is entered into, and
- disclose the beneficial relationship to the chairperson of the owners corporation immediately after becoming aware of it.
A manager must disclose in writing to the chairperson of the owners corporation any commission, payment or other benefit they stand to receive from a supply contract.
Delegating powers to a manager
Your owners corporation must delegate duties, powers and functions to a manager in an approved form or instrument of delegation. This enables the manager to act on behalf of the owners corporation.
The owners corporation cannot delegate:
- functions or powers requiring a special or unanimous resolution
- matters requiring decision of the owners at a general meeting.
Anybody can be a volunteer manager. If the volunteer manager is also a member of the owners corporation, they are not personally liable for anything they do in good faith as a volunteer manager under the Owners Corporation Act.
A manager may delegate some or all duties, powers and functions to an employee.
Your owners corporation should consider the powers delegated to the manager at each annual general meeting.
Download the Instrument of delegation - owners corporations (Word, 64KB).
Appointing a manager
Changes to the appointment and removal of a manager
From 1 December 2021, an owners corporation manager cannot be appointed for more than three years, or five years for a retirement village owners corporation.
A manager’s contract cannot include terms that:
- require the owners corporation, before it revokes the appointment of the manager, to:
- pass a special resolution
- pass a unanimous resolution
- pass any other resolution requiring more than a simple majority of votes, or
- convene a general meeting of the owners corporation allow the manager to renew the contract of appointment at his or her discretion.
- require a tier one or two owners corporations to give three months or more notice of its intention to revoke the appointment.
- require a tier three, four or five owners corporations to give one month or more notice of its intention to revoke the appointment.
- provide for the automatic renewal of the contract of appointment if the owners corporation fails to give notice of its intention not to renew in accordance with its terms.
- restrict the ability of the owners corporation to refuse to appoint a person as manager, other than a requirement that consent to appoint a person as manager must not be unreasonably withheld by the owners corporation.
If any of these terms are included in a contract entered into on or after 1 December 2021, they will be void.
If an owners corporation fails to give notice of its intention to not renew a contract of appointment, it will be taken to have been renewed. In this circumstance, the contract may be terminated by the owners corporation or the manager with at least one months’ written notice (or a shorter period if provided for under the contract).
Selecting a manager
Consider the following questions when selecting a manager:
- what does the owners corporation expect or require in management services?
- what are the services to be provided in the management fee?
- what services are provided out of hours and on weekends?
- what experience the person has in management?
- what are the manager’s skills and qualifications and knowledge?
- is the manager a member of a professional organisation?
- is the manager committed to ongoing professional development?
- when will the manager be available (for example, what days or hours)?
- how often will the manager be onsite?
Before appointing a manager, check their registration details in our Public register of owners corporation managers section. This includes details of any orders made against a manager.
Appointing your owners corporation manager
The appointment requires an ordinary resolution at a meeting or by ballot.
The owners corporation can delegate its decision to appoint a manager to the committee, a sub-committee or to a lot owner, but it is preferable to appoint a manager at a general meeting to enable powers and functions to be appropriately delegated.
The appointment of the manager at a general meeting will also enable the lot owners to meet the manager, ask any questions and affix the common seal to all the relevant documents confirming the appointment.
Download the Contract of appointment - owners corporation manager (Word, 114KB).
Removing a manager
Note: from 1 December 2021 there have been changes to the removal of a manager.
To remove an owners corporation manager (regardless of whether their contract has expired or not), the owners corporation should:
- conduct a vote at a general meeting or hold a postal ballot to remove a manager
- follow the process for the removal or termination of the manager outlined in the contract of appointment.
Alternatively, your owners corporation may apply to the Victorian Civil and Administrative Tribunal (VCAT) for an order terminating the manager’s contract.
Once a manager’s appointment is terminated, the manager has 28 days to return all funds and records to the owners corporation.
Complaints about your manager
Discuss any concerns with your manager in the first instance. Many complaints or disputes start as misunderstandings and your manager may not be aware of the issue.
If this fails, you can:
- contact the committee or chairperson and clarify the manager’s duties and responsibilities in the contract of appointment. The contract may also set out a process for complaints with the manager
- make a written complaint to the owners corporation or committee. Your owners corporation is required to have a process for dealing with grievances
- make a written complaint to Consumer Affairs Victoria
- apply for an order at the Victorian Civil and Administrative Tribunal (VCAT)
- if your manager is a member of a professional body, make a complaint about any breach of its code of conduct. The complaint may need to be lodged by the owners corporation rather than an individual.