Owners Corporation: What It Is & How It Works in Australia

If you manage strata-titled properties, you already deal with owners corporations every day. Understanding how they operate is essential to managing compliance, maintenance and client expectations. An owners corporation is the legal entity that governs the common property in a subdivided development, and for property managers like us, understanding how it works is not optional. It shapes your compliance obligations, your maintenance coordination and the boundaries of your management role. In this guide, I’ll walk you through everything you need to know to manage strata-titled properties with confidence.

What Is an Owners Corporation?

An owners corporation (formerly known as a body corporate) is a legal entity that manages the common property of the following types of property developments:

• Residential
• Commercial
• Retail
• Industrial
• Mixed-use

It is automatically created the moment a plan of subdivision containing common property is registered with the relevant land titles authority in each state.

When your client purchases a unit, apartment or townhouse in a strata development, they automatically become a member of the owners corporation. Membership transfers automatically on sale. The owners corporation is not a company you can register or deregister of your own choosing. It exists by operation of law the moment the subdivision plan is lodged and registered.

Common property is everything shown on the plan of subdivision that sits outside the individual lot boundaries. This typically includes:

• Gardens
• Pathways
• Driveways
• Stairwells
• Foyers
• Lifts
• Fences
• Car parks
• Walls

The owners corporation is responsible for managing, administering, repairing and maintaining these shared spaces.

How Owners Corporation Terminology Varies by State

The legal name for the entity that manages common property varies across Australia. Use the correct term for the jurisdiction when communicating with owners, tenants and service providers.

The underlying function across all states is consistent: the collective manages shared spaces, sets levies, enforces rules and protects the common property. The name and specific legislative requirements differ. Always check the relevant state legislation before providing advice to your clients.

What Does an Owners Corporation Manage?

Understanding the scope of an owners corporation’s responsibilities is critical for any property manager with strata properties in their rent roll. The owners corporation is responsible for a defined set of functions. As Consumer Affairs Victoria outlines, those core responsibilities include:

• Common property maintenance: Repairing and maintaining all shared infrastructure, from elevators to gardens to structural elements of buildings.
• Insurance: Taking out and maintaining insurance for the common property where required. For example, in Victoria, owners corporations with common property, except two-lot subdivisions, must hold public liability insurance of at least $20 million for the common property.
• Financial management: Preparing budgets, setting levies, collecting contributions from lot owners and maintaining proper financial records.
• Record keeping: Maintaining an owners corporation register, meeting minutes, financial statements and correspondence.
• Rules enforcement: Enforcing the owners corporation rules and managing dispute resolution between lot owners.
• Certificates: Providing owners corporation certificates when requested during property transactions, which form part of the vendor disclosure statement.
• Meeting governance: Conducting annual general meetings and calling special meetings when required.

For property managers, the important distinction is this: the owners corporation manages the common property. Your client owns their individual lot (the airspace within their apartment’s boundaries, for example), and you manage that lot on their behalf. Your responsibilities as their property manager do not extend to the common property, but you do need to coordinate with the owners corporation on many issues, including maintenance requests, renovation approvals and rules compliance.

How an Owners Corporation Is Governed

An owners corporation is governed through formal decisions, elected representatives and appointed service providers. For property managers, the key is knowing who has authority over the common property and where your role begins and ends.

The Committee

Most owners corporations operate through a committee. The owners corporation elects committee members at the annual general meeting (AGM). 

• In NSW, this was formerly called the “executive committee.”
• In Victoria, it is simply the “committee.”
• In Queensland, it is the “body corporate committee.”

The committee handles day-to-day decisions within limits set by the owners corporation as a whole. It can approve routine maintenance, interact with contractors, respond to owner requests (such as pet approvals or minor renovation works) and communicate with lot owners. Matters that affect ownership rights, levies or rules changes must be referred to a general meeting of all owners.

Strata Managers vs Property Managers

This distinction trips up a lot of property managers, particularly those newer to strata work. The strata manager (sometimes called an owners corporation manager) is appointed by the committee to administer the scheme, arrange insurance, collect levies, attend meetings and maintain records. They act on behalf of the owners corporation as a whole.

Your role as a property manager is different. You act on behalf of your individual landlord client, managing their specific lot, finding tenants, conducting routine inspections and handling lease administration. The two roles intersect regularly, but they are legally distinct. Understanding where your authority ends and the strata manager’s begins will save you significant frustration and protect you from liability.

Owners Corporation Fees and Levies

Every lot owner must make financial contributions to the owners corporation. These are called owners corporation fees in Victoria, and strata levies in NSW and most other states. They fund the shared costs of running the building and maintaining the common property.

Common Types of Owners Corporation Levies 

Levies are typically paid quarterly. The amounts are set at the AGM based on a budget prepared by the committee or the owners corporation manager. There are two standard types:

1. Administrative fund (or general fund): Covers day-to-day expenses such as cleaning, insurance, garden maintenance and management fees. In NSW, the owners corporation must give lot owners at least 30 days’ written notice of levies to be paid.
2. Maintenance fund (capital works or sinking fund): Set aside for long-term capital expenses such as roof replacement, lift maintenance, repainting and structural repairs. In NSW, each scheme must prepare a 10-year capital works plan.

A third type, the special levy, is raised when unexpected expenses arise that exceed what is available in the existing funds. Special levies require approval at a general meeting and can create friction between owners, particularly in older buildings with deferred maintenance.

How Levies Are Calculated and Paid 

Levies are calculated based on lot entitlement or lot liability, which reflects each lot’s proportionate share of ownership in the common property. A larger or more valuable lot typically carries a higher lot entitlement and pays more in levies. In Victoria, owners corporation fees in the administrative fund must be paid within 28 days from the date the notice is issued.

Owners who fall behind on levies face serious consequences. These typically include financial penalties and interest, loss of voting rights at meetings and in prolonged cases, legal action through the relevant tribunal or court.

What Investor Clients Need to Know 

For investor clients, some owners corporation or body corporate fees may be deductible, depending on what the fees cover and when they are incurred. The ATO explains that not all body corporate fees are deductible in full in the income year they are incurred, so clients should confirm the treatment with their accountant.

Owners Corporation Rules

Every owners corporation operates under a set of rules that govern the use of lots and common property. These rules cover matters such as noise, waste disposal, parking, smoking, pets and short-term rental accommodation. 

• In Victoria, a set of model rules apply automatically to all owners corporations under Schedule 2 of the Owners Corporations Regulations 2018. Additional rules can be adopted by a special resolution (75% majority) and must be registered with the relevant land titles authority.
• In NSW, these are called by-laws. A copy of the by-laws must be attached to the contract of sale when a strata property is sold. 
• In Queensland, these are usually called body corporate by-laws. The terminology differs, but the purpose is the same.

As a property manager, you need to be familiar with the rules of any strata scheme where your client owns a lot. Your tenants must comply with those rules, and you are responsible for ensuring they do. If a tenant breaches the rules, the owners corporation may issue a notice directly to the lot owner, which then becomes your problem to manage.

Decision-Making in an Owners Corporation

Owners corporations make decisions through formal resolutions at meetings. There are several types of resolutions, each requiring different levels of agreement:

The AGM is where most routine decisions are made, including approving the budget, setting levies, electing the committee and reviewing the owners corporation manager’s contract. Lot owners who cannot attend can typically appoint a proxy to vote on their behalf.

For property managers with investor clients who own strata lots, keeping your clients informed about upcoming AGMs is a valuable service. Many investors leave strata management to chance, missing votes on special levies or major works that could significantly affect their investment.

What Property Managers Need to Know About Strata Work

Managing a strata-titled property adds a layer of coordination that you do not have with a freestanding house. In my experience working with property management agencies across Australia, strata properties consistently generate more administrative volume per property than any other property type. 

The reason is simple: there are more parties involved, more rules to manage and more coordination required between the property manager, the strata manager, the committee, the tenant and the lot owner.

Some of the most common touch points include:

• Maintenance requests: You need to determine whether a maintenance issue falls within the individual lot or on common property. Plumbing within the lot is typically the owner’s responsibility. Plumbing that services multiple lots or runs through common property is typically the owners corporation’s responsibility. Getting this wrong costs time and money.
• Renovation approvals: If your client wants to make alterations to their lot, they may need approval from the owners corporation. The rules on this vary by state and by scheme. Do not let a tenant start renovation work without checking the by-laws and the renovation approval process first.
• Routine inspections: When you conduct routine inspections, you’re assessing the individual lot, not the common property. However, you should note any obvious issues with common property and communicate those to your client so they can raise them with the committee if needed.
• Insurance: The owners corporation insures the building structure and common property. Your client’s landlord insurance typically covers the contents of their lot and public liability within their lot. Help your clients understand the difference so there are no gaps.
• Owners corporation fees as a property expense: Quarterly levies are paid by the lot owner, not the tenant. Ensure your owners corporation fee payment process is clear in your property management agreement.

At PMVA, I’ve seen agencies add strata properties to their rent roll without updating their internal systems to account for this extra administrative layer. The properties then fall behind on compliance, levy tracking and maintenance coordination. 

Bringing in systematic back-office support to handle strata administration tasks is one of the most effective ways to manage a growing strata portfolio without placing more pressure on your property managers. Our property management and maintenance support services are specifically designed to handle this kind of operational load so your property managers can stay focused on client relationships.

What I Check Before a Strata Property Enters the Rent Roll

When an agency adds a strata property to the rent roll, I do not treat it like a freestanding house with extra paperwork. I treat it as a shared-responsibility asset, because the admin only works when every task has a clear owner.

Before the property goes live, I like to separate the file into four lanes: the lot owner, the tenant, the strata manager and the back-office support team. That stops maintenance requests, levy notices and rule breaches from bouncing between people without a decision.

My strata intake check includes:

• Scheme rules or by-laws: Are the current rules saved in the property file and shared with the tenant before the lease starts?
• Maintenance boundaries: What belongs to the lot, what belongs to common property and who confirms grey-area repairs?
• Levy notices: Who receives levy notices, who tracks due dates and how are special levies escalated to the owner?
• Insurance details: What does the owners corporation policy cover and where does the landlord’s own insurance need to start?
• AGM and meeting notices: Who monitors upcoming meetings, agenda items and votes that may affect the owner’s investment?
• Approval requirements: What approvals are needed for pets, renovations, access, parking, moving arrangements or short-term rental use?
• Escalation contacts: Who is the strata manager, who is the committee contact and who inside the agency owns follow-up?

This is the point where back-office support becomes valuable. A property manager should not be digging through old emails to find a levy notice, checking by-laws during a tenant dispute or chasing strata contacts every time a maintenance request crosses into common property.

At PMVA, this is the kind of structure I want in place before the portfolio grows. When the admin layer is organised early, your property managers can focus on judgement, advice and client relationships instead of carrying every small strata detail in their head.

Owners Corporation vs Body Corporate vs Strata Management: Clearing Up the Confusion

The interchangeable use of these terms is a genuine source of confusion, even among experienced property professionals. Here is a clear distinction:

• Owners corporation / Body corporate: These are different names for the same legal entity. The owners corporation is the collective of all lot owners in a strata scheme. It is not an external company. Every lot owner is automatically a member.
• Strata manager / Owners corporation manager: This is a professional service provider appointed by the owners corporation to administer the scheme. They are external to the owners corporation, operating under a management agreement.
• Property manager: You. You act on behalf of an individual lot owner, managing their tenancy and rental income. You are not part of the owners corporation management structure.

Understanding these boundaries protects you from scope creep and liability. Your agency’s management agreement should be clear about what falls within your role and what sits with the strata manager or the committee.

Strata Growth in Australia and What It Means for Property Managers

Strata living is becoming a larger part of Australia’s residential property market, especially in capital cities. The Property Council of Australia reported that the Australasian Strata Insights Report 2022 found at least one in six Australians lived in strata-titled properties such as apartments and townhouses, with the number of strata properties growing by 7% over the previous two years. As more investors buy into apartment complexes and townhouse developments, strata-titled properties are likely to make up a larger share of rent rolls across many markets.

For property management agencies with 250+ properties under management, this trend has real operational implications. Strata properties generate more administrative tasks per property, require closer coordination with external strata managers and carry more compliance touchpoints than residential houses. Agencies that build systems to manage this efficiently will grow their strata portfolios profitably. Agencies that try to manage strata properties the same way they manage houses will find that their property managers burn out before their portfolios do.

The smarter path is to separate the high-judgement work, client relationships, inspections and negotiations from the high-volume administrative work:

• Levy tracking
• Maintenance coordination
• Rules compliance checking
• Documentation

That is exactly the kind of work PMVA virtual assistants handle every day, allowing your team to manage larger strata portfolios without proportionally increasing their workload.

FAQs: Owners Corporations

Your Strata Portfolio Needs More Than Good Intentions

Owners corporations are now part of everyday Australian property management, and strata portfolios need clear systems for levies, maintenance, rules and owner communication. When those tasks have a clear owner, your property managers can stay focused on advice, inspections and relationships instead of carrying every small strata detail themselves. At PMVA, this is exactly the kind of structure I help agencies create through property management and maintenance support. I’d love to help your team build a calmer, more organised way to manage strata growth.