Victoria's Owners Corporation Reforms: A Win for Strata Owners, or the Industry?

The Victorian Government’s response to the statutory review of the Owners Corporations Act 2006 has been met with a mixed reception. While the government and some industry stakeholders have welcomed the reforms as a meaningful modernisation of a framework long overdue for an update, a vocal cohort of lot owners and advocates argue the response falls short - and may even make things worse.

Here’s an honest look at both sides of the debate.

What the Government Says It’s Delivering

The government’s stated goals are straightforward: stronger consumer protections, greater accountability, and a more professional OC sector. The headline measures include:

A licensing scheme for OC managers, bringing them in line with other real estate professionals
Expanded enforcement powers for Consumer Affairs Victoria (CAV), moving away from a system that relies almost entirely on civil dispute resolution
Financial hardship protections for lot owners struggling to pay OC fees
Developer accountability measures, including a duty to act in the best interests of future lot owners
A centralised information hub to improve transparency across the sector
Fairer voting rules, including restrictions on proxy vote blocs and longer AGM notice periods

On paper, these are substantive reforms. The government has supported 17 of 51 recommendations in full, 26 in principle, and 3 in part.

The Critical View: Who Really Benefits?

Not everyone is convinced. Critics - particularly among lot owner communities - argue that the response is skewed toward the interests of the strata management industry rather than the owners who fund it.

The Insurance Commission Problem

One of the most significant concerns raised during the review was the practice of OC managers receiving commissions and other financial benefits from third-party suppliers, particularly insurers. The Expert Panel recommended an outright ban.

The government’s response? “Support in principle” - with further analysis required on market impacts. Critics argue this is a delay tactic that protects a profitable revenue stream for managers at the expense of owners, who often have no visibility into what their manager is earning from their insurance arrangements.

The government has also placed the related Trowbridge invoice transparency model - which would require standardised line-item disclosure on insurance invoices - under review, with no commitment to a timeline.

For lot owners who have long suspected they are paying inflated insurance premiums that generate undisclosed commissions for their managers (in The Age just a few days ago..), this response offers little immediate comfort.

CAV’s Enforcement Record

The government has committed to expanding CAV’s (Consumer Affairs Victoria) regulatory powers - but critics point out that CAV has reportedly taken no enforcement action against an OC manager in five years under the existing framework. Expanding powers means little, the argument goes, if the regulator has shown no appetite to use the ones it already has.

The government’s response acknowledges the current framework is “no longer fit for purpose” - which raises the question of why it has been allowed to persist without intervention for so long.

The Strata Hub Comparison

The government’s proposed centralised information hub has drawn comparisons to New South Wales’ Strata Hub, which has faced criticism since its introduction. Reports have surfaced of strata managers in NSW joking openly about the additional income the Hub’s administrative requirements generate - costs that are ultimately passed on to lot owners. Four corners videos here.

If Victoria’s hub follows a similar model, critics warn it could add yet another layer of cost to small and medium OCs without delivering meaningful benefits to owners.

Small and Medium OCs Bearing the Load

Several of the reforms - including extending mandatory maintenance plans to Tier 3 OCs (10–50 lots) and introducing licensing requirements - will impose new compliance costs on the sector. For large OCs with professional management, these costs may be absorbed relatively easily. For smaller OCs, already stretched by rising levies and cost-of-living pressures, critics argue the burden falls disproportionately on the owners who can least afford it.

The Proxy Vote Compromise

The Expert Panel recommended prohibiting OC managers, building managers, and developers from exercising proxy votes entirely. The government has supported this only in part - restricting voting blocs beyond the existing cap, but stopping short of an outright ban.

The government’s reasoning is that smaller OCs rely on proxies to meet quorum. Critics counter that this compromise still allows the very parties with the most to gain from OC decisions to wield significant voting influence.

A Question of Consultation

Perhaps the sharpest criticism has been directed at the government’s approach to consultation. Minister Paul Edbrooke’s comments indicating a desire to continue working with industry “stakeholders” have been seized upon by owner advocates who argue that the industry - not owners - has had disproportionate influence over both the review process and the government’s response.

The concern reflects a broader tension in how regulatory reform of this kind gets made - industry bodies are typically well-organised and well-resourced when it comes to consultation, while individual lot owners are far more diffuse. That dynamic is worth keeping in mind as the legislative drafting phase begins.

At the same time, it’s worth noting that the Expert Panel did undertake significant public consultation - 159 written submissions, 300 survey responses, and 53 stakeholder meetings - and the review was chaired by an independent panel, not the industry itself.

Where Both Sides Have a Point

The truth, as is often the case, sits somewhere in the middle.

The government’s critics are right that the response leaves unresolved some of the most consequential issues - insurance commissions, enforcement culture at CAV, and the cost burden on smaller OCs. “Support in principle” and “under review” are not the same as reform, and the history of regulatory inaction in this sector gives owners legitimate grounds for scepticism.

But the government’s defenders are also right that licensing, financial hardship protections, and expanded enforcement powers represent genuine progress - if implemented well. The OC sector has operated for years with inadequate accountability mechanisms, and the direction of travel in this response is, broadly, toward greater consumer protection.

The real test will come in the legislative drafting phase. How the licensing scheme is designed, whether the hub genuinely serves owners or creates new revenue opportunities for managers, and whether CAV develops a genuine enforcement culture will determine whether these reforms deliver on their promise - or simply add cost and complexity without meaningful accountability.

What Lot Owners Should Watch

If you own a lot in a Victorian owners corporation, here are the specific issues worth tracking as these reforms progress:

Insurance commissions: Will the government ultimately act on the ban, or will “further analysis” quietly bury it?
CAV enforcement: Will expanded powers translate into actual action against non-compliant managers?
Hub design: Will the centralised information hub be built for owners, or will it become another compliance cost passed on through levies?
Licensing requirements: Will the scheme genuinely raise standards, or create a credentialling process that incumbent managers pass easily while costs rise?
Consultation process: Will lot owners have a genuine seat at the table as legislation is drafted, or will industry bodies continue to dominate?

The Bottom Line

This is a reform package with real potential - but also real risks. The government has signalled the right direction on several fronts. Whether it follows through, and whether it does so in a way that genuinely prioritises the one-in-five Victorians who live under an owners corporation, remains to be seen.

Lot owners would be wise to stay engaged, stay informed, and hold the government to account on the specifics - not just the headlines.

This post draws on the Victorian Government Response to the Statutory Review of the Owners Corporations Act 2006 (June 2026) and publicly available commentary from lot owner communities and industry stakeholders. It is intended as an informational overview only.

The full government response is available on Engage Victoria.