Legal exemptions for owners corporation with two lots

Two lot subdivisions are exempt from many of the legal requirements placed on larger owners corporations (formerly bodies corporate).

If your owners corporation has two lots, you do not have to:

  • Get a special resolution to bring legal proceedings
  • Use approved forms as notices to collect fees
  • Take out reinstatement and replacement insurance for the common property in the name of the owners corporation
  • Take out public liability insurance for the common property in the name of the owners corporation
  • Take out insurance for lots where a lot or common property is above or below another lot
  • Give the chairperson a casting vote
  • Restrict votes of lot owners if fees are unpaid.

Your owners corporation is also exempt from legal requirements for:

  • Unanimous resolutions, special resolution and interim special resolutions
  • Financial reporting and financial statements
  • Maintenance plans and funds
  • Annual meeting, general meeting and ballot procedures
  • Keeping records for and establishing an owners corporation register.

What an owners corporation with two lots must do:

  • Prepare owners corporation certificates.
  • Repair and maintain any service relating to a lot that benefits more than one lot and common property.
  • Comply with other laws; for example, fences around swimming pools
  • Care for the common property.

What the lot owners in a two lot subdivision must do:

Individual lot owners are responsible for any common property and risk significant legal and financial liabilities if someone is injured or the building is damaged.

The lot owners in a two lot subdivision should seek advice from their insurer on strata insurance products to cover those risks.

Owners corporation certificates for two lot subdivisions

All owners corporations, including two-lot subdivisions, must issue an owners corporation certificate to any person who submits a written application with the appropriate fee.

The certificate must be issued within 10 business days of receiving the application and contain specific information. As a lot owner in a two-lot subdivision:

  • Not all the information requested for the certificate will be relevant
  • You may not have all the information at hand. You will find some of the information on the plan of subdivision, which is available from Land Victoria.

Issuing the owners corporation certificate for a two lot subdivision:

If you intend to sell your property, you must include an owners corporation certificate and accompanying documents in the vendor’s statement (section 32). This means the information in the certificate must be accurate.

The certificate for a two-lot subdivision must be authorised by affixing the common seal, witnessed by both owners. The owners corporation can authorise its manager to affix the common seal to a document but this authorisation must be recorded in the minutes of the general meeting.

Maintenance issues for two lot subdivisions

If a lot owner in a two-lot subdivision fails to make repairs to their property requested by the owners corporation (see notice of repairs/maintenance), the owners corporation may carry out the works after 28 days written notice.

The owners corporation may then recover the cost of the works from the lot owner, this is only possible if one lot owner has more lot entitlements.

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