Owners Corporation workshop Oct 2012: Owners Corporation Powers — Amending Plans of Subdivision. Sections 32 and 34D, Subdivision Act 1988 (Vic)

At our Owners Corporation Workshop in October 2012, we presented on the powers of owners corporations to amend Plans of Subdivision. Provided below are the notes from the presentation.

The Subdivision Act 1988 (Vic) (the Act) contains two provisions that allow an owners corporation (OC) to amend the plan of subdivision giving rise to that OC. Set out below is a practical guide to the use of Sections 32 and 34D of the Act.

Section 32 — Application to Office of Titles — unanimous resolution required

Use to:

• Dispose of (sell, gift, lease, etc.) common property or other land acquired by the OC
• Purchase land to become common property or a lot on the Plan
• Alter the boundaries of land affected by the OC (increase or decrease area of common property)
• Increase or decrease the number of lots affected by the OC
• Create new lots or new common property
• Create, name and specify the scope of a new OC on the Plan
• Dissolve an OC (power limited)
• Merge one OC with another OC (power limited)
• Create, vary or remove any easement or restriction on the Plan
• Consolidate all of the land affected by an OC into a single lot (power limited)
• Create, alter or extinguish lot entitlements required as a result of changes to a Plan pursuant to another power under S.32
• Amend or cancel a scheme of titles under the Cluster Titles Act 1974
• Create roads or reserves on the Plan

Steps required

1. Pass unanimous resolution of the members of the OC according to the procedure set out in the Owners Corporation Act 2006 (Vic) (the OC Act);
2. Engage surveyor to draw Plan of Subdivision pursuant to S.32 (S.32 Plan), Abstract of Field Records and Surveyors Report;
3. Submit S.32 Plan to Council for certification and for Council to issue a Statement of Compliance (surveyor or lawyer can organise);
4. Engage lawyer to prepare Application to the Office of Titles;
5. Obtain consent of all registered Mortgagees, Caveators, etc. of each Lot affected by the S.32 Plan. The procedure set out in Section 22(1B) – (1F) of the Act can be used to obtain the consent of interested parties as follows:
   1. Lodge the Section 32 Plan at the Office of Titles;
   2. OC applies to the Office of Titles to serve the interested party with a notice of the Application in the required form;
   3. The interested party must respond to the notice providing or refusing its consent to the Application within the notice period (not less than 30 days);
   4. If the interested party fails to respond in the notice period then it is deemed to have consented to the Application; and
   5. If the interested party refuses its consent in the notice period then the OC can apply to the Supreme Court to obtain an order for consent – the Supreme Court may make an order providing the consent of the interested party if the Court is satisfied that the refusal of consent was “unreasonable”.
6. Lodge S.32 Plan for registration at the Office of Titles (Note that if the procedure under Section 22(1B) of the Act is required then the S.32 Plan must be lodged before the Office of Titles is asked to serve its notices.

Section 34D – Application to VCAT – unanimous resolution not required

Use to apply to VCAT for an Order

• To compel the OC to exercise any power under Sections 32 or 33 of the Act
• Consenting on behalf of a member or group of members of an OC to the doing by an OC of anything allowed under SS. 32 or 33 (limited power – member must be incapacitated, out of Victoria, impracticable to contact and/or that member is in the minority or the proposed plan is likely to be in the best interests of the OC)
• Consenting to the registration of a plan on behalf of a person who’s consent is required under Section 22 of the Act (limited power)
• Restraining the OC from taking any action under the Act

Steps required

1. Prepare proposed Plan following steps 2-4 (inclusive) for S.32 Plan
2. Submit the proposed Plan to the lot owners for approval – the easiest method being by ballot
3. If the ballot fails, engage lawyer to draw VCAT Application pursuant to S.34D
4. Apply to VCAT for relevant Order
5. Lodge Plan (supported by VCAT Order) at the Office of Titles for Registration

Please note: The steps set out above for both S.32 and S.34D of the Act are only a summary of the process required. Each step of that process can represent a significant hurdle to the registration of a S.32 Plan and legal advice should be sought before commencing either of the processes under Section 32 or Section 34D.

More information

For more information, please contact Anton Block, Principal Lawyer and Head of Owners Corporation, on (03) 8600 8833 or ablock@kcllaw.com.au.

Note: This update is a guide only and is not intended to constitute legal advice.