The Victorian government has unveiled a long-awaited legislative blueprint to overhaul the state’s strata sector, triggering a sharp divide between industry representatives and apartment owners. While the government has introduced a first tranche of reforms to parliament, the response from those living in strata schemes has been overwhelmingly negative, with advocates describing the measures as an insult to the intelligence of owners.
The legislation includes provisions for standardized payment plans for unit owners struggling with fees and a reduction in the voting threshold for enforcing building rules. However, the government stopped short of implementing major recommendations from an independent expert panel, including the banning of insurance commissions and the restriction of proxy vote harvesting by developers and strata managers.
Did You Know?
An expert review panel—comprising former Labor consumer affairs minister Marsha Thomson, economist Karen Chester, and strata lawyer David McKenzie—submitted 51 recommendations to the government six months ago, yet only 17 have been supported in full.
Regulatory Gaps and Industry Response
Corporate strata management firms have largely welcomed the government’s decision to pause a recommended ban on insurance commissions and broker fee-sharing. The Strata Community Association Victoria argued that the focus should remain on transparency and consumer choice rather than an outright prohibition of specific remuneration models, pending further market impact analysis.
In contrast, owners’ advocates argue that the system remains broken. Financial Counselling Victoria highlighted that regulatory gaps continue to allow for the imposition of indiscriminate administrative fees, some of which have been deemed unlawful by VCAT on multiple occasions. Critics point to a lack of enforcement by Consumer Affairs Victoria, which has not laid a single charge or cancelled a strata manager registration since 2019, despite receiving nearly 1,000 complaints annually.
Expert Insight:
The core tension here lies in the definition of “oversight.” By favoring a “carrot instead of the stick” approach, the government risks conflating the needs of volunteer-run committees with the operations of large, commercial management firms. Without an independent commissioner to bridge this gap, the power imbalance between individual owners and professional managers is likely to persist, leaving many to navigate high fees and legal delays without adequate protection.
The Path Forward
The state government has indicated it remains open to establishing a dedicated unit within Consumer Affairs to handle strata issues, though this remains subject to future funding. Given the current legislative trajectory, the financial burden on apartment owners will remain high, as the failure to address commission-sharing and hidden fees leaves current practices largely intact.
A possible next step involves further market analysis on insurance commissions, which the government has cited as a reason for its delay. Meanwhile, the opposition has signaled that a change in government could lead to the establishment of an independent strata commissioner, potentially shifting the regulatory landscape for the 1.6 million Victorians living in strata schemes.
Frequently Asked Questions
What are the key changes introduced in the new legislation?
The legislation introduces a standardized right to payment plans for owners struggling with fees, lowers the threshold for enforcing basic building rules from 75 per cent to 50 per cent, and loosens the voting threshold for the sale of older buildings for redevelopment.
Why are owner advocates unhappy with the government’s response?
Advocates believe the government ignored core recommendations, including banning insurance commissions and restricting proxy vote harvesting. They argue the reforms fail to protect owners from predatory corporate managers and unlawful fees.
What is the current status of the proposed independent strata commissioner?
While the expert review recommended a dedicated unit, the government has only stated it is “open” to the idea, noting that any such development remains subject to future funding.
Do you believe current regulatory measures provide enough protection for apartment owners against rising administrative costs?
