A Developer’s Guide to Setting Up a New Owners Corporation in Victoria

As a property developer in Victoria, your responsibilities don’t end at the completion of a building. If your project includes multiple lots—such as apartments, townhouses, or commercial units—you’re also responsible for establishing an Owners Corporation (OC). This process is legally required and essential for the long-term management and maintenance of the common property.

In this guide, we’ll walk you through everything you need to know about setting up a new Owners Corporation in Victoria, helping you avoid costly missteps and ensure a smooth handover to future lot owners.

What is an Owners Corporation?

An Owners Corporation (formerly known as a Body Corporate) is a legal entity automatically created when a plan of subdivision containing common property is registered with Land Use Victoria. It manages shared areas such as lobbies, gardens, driveways, lifts, and other common facilities on behalf of the lot owners.

Step-by-Step: How to Set Up an Owners Corporation as a Developer

1. Plan of Subdivision with Common Property

The process begins with the plan of subdivision, which must clearly define:

• Individual lots (e.g. apartments or units)

• Common property (e.g. corridors, gardens, driveways)

• Lot entitlements and lot liabilities (which determine voting power and how fees are shared)

TIP: Engage a licensed land surveyor early to help you structure the plan correctly. Poor planning can lead to future disputes and financial issues.

2. Decide on the Number of Owners Corporations

Your development may require more than one OC if it includes:

• Mixed-use (residential + commercial)

• Multiple buildings or stages

• Complex facilities (e.g. a shared gym or rooftop only for one building)
  

Example: A project might have OC1 for the whole site, OC2 for residential apartments, and OC3 for commercial lots.

3. Create a Set of Rules (Recommended)

By default, an OC adopts Model Rules as per the Owners Corporations Regulations 2018. However, developers often create Custom Rules to suit the specific needs of the development, such as:

• Short-stay restrictions

• Pet rules

• Balcony usage

• Waste management

TIP: Custom rules must be registered with Land Use Victoria to be enforceable. If you unsure if they are registered check the POS (Plan Of Subdivison)

4. Appoint an Owners Corporation Manager (Pre-Sale or Post-Completion)

Developers often appoint an OC Manager early—ideally during the pre-settlement phase—to:

• Help set budgets and levies

• Coordinate insurance

• Prepare for the inaugural general meeting

• Assist with compliance documents
  

Note: Under the Owners Corporations Act 2006 (VIC), any initial management contract must not exceed 3 years.

5. Prepare the Initial Budget & Fees

The initial budget must cover:

• Insurance premiums

• Common area maintenance

• Utilities (e.g. common lighting, lifts)

• Administration (e.g. strata manager fees)
  

This budget must be disclosed in Section 32 (Vendor’s Statement) documents provided to purchasers.

6. Disclose OC Information in Sale Contracts

Developers are legally required to disclose:

• The existence of the OC

• Estimated fees

• Lot liability and entitlement

• Copy of proposed rules (if any)
  

Failing to do so can lead to disputes or withdrawal from purchase.

7. Hold the Inaugural General Meeting

Once the first lots are sold, the OC must convene its first general meeting. At this point, control of the OC begins to transfer from the developer to the lot owners.

The agenda typically includes:

• Confirming insurance

• Electing the OC committee

• Confirming manager appointment

• Approving the budget
  

🔍 Common Pitfalls to Avoid

• Unbalanced lot entitlements that unfairly benefit commercial lots or the developer

• Inadequate budget forecasts, leading to levy shortfalls

• Failing to register custom rules

• Overly complex OC structures that confuse owners

• Delaying manager appointment, leaving owners without support

Developer Checklist for Setting Up an OC in Victoria

Task	Completed
Drafted and registered a Plan of Subdivision with common property	☐
Assigned lot entitlements and liabilities	☐
Decided on number and structure of OCs	☐
Created and registered custom OC rules (if needed)	☐
Appointed a licensed OC manager	☐
Prepared and disclosed OC information in sales documents	☐
Budgeted and set initial levies	☐
Scheduled and conducted inaugural general meeting	☐

Partner with the Right OC Manager Early

Engaging an experienced Owners Corporation Manager during the development phase is one of the smartest moves a developer can make. It ensures compliance, supports your purchasers, and preserves the long-term value of your project.

A good OC Manager will:

• Help structure the plan of subdivision

• Draft meaningful custom rules

• Provide realistic levy estimates

• Smoothly manage the transition from developer to owners
  

Need Help with OC Setup in Victoria?

We specialise in working with developers from the design phase through to post-handover management. Get in touch today to discuss how we can help ensure your Owners Corporation is set up for long-term success.