Owners corporation explained: what to check before buying an apartment

When you buy an apartment, townhouse, or unit in Victoria, you're also buying a share of the common property and joining an owners corporation. It catches first-time buyers off guard, because it can be a source of significant ongoing costs and obligations. This is one piece of our complete Section 32 guide.

What it is and what it does

An owners corporation (a body corporate in some states) is the legal entity that owns and manages the common property, the corridors, foyer, gardens, roof, external walls, and shared facilities. Every owner is automatically a member; you can't opt out while you own the unit. It maintains and insures the building (you still need contents cover for inside your unit), cleans and maintains common areas, runs any lift, pool, or gym, sets and enforces the rules, holds AGMs, and approves the budget and fees. Day-to-day work is usually outsourced to an owners corporation manager, while a committee of owners makes the decisions.

The fees

This is where it hits your budget. You pay fees (quarterly, monthly, or annually) covering administration (insurance, management, common-area utilities), a maintenance fund for wear and tear, and in larger or older buildings a sinking fund for major works. There's huge variation:

• Small walk-up, no lift: $800 to $2,500 a year
• Mid-size block with a lift and some common areas: $3,000 to $6,000 a year
• Luxury building with pool, gym, and concierge: $8,000 to $20,000+ a year

The more amenities, the higher the fees, whether you use the pool and gym or not.

Special levies

This is the part that catches buyers out. If a major repair isn't covered by the maintenance fund, the corporation can issue a special levy to every owner, and they can be large: lift replacement $5,000 to $20,000 per unit, roof $10,000 to $30,000, façade rectification $30,000 to $100,000+, and combustible cladding removal anywhere from $20,000 to $200,000 per unit. They're usually paid in instalments, but you inherit the obligation when you buy, which makes it one of the contract red flags worth raising before you sign.

What to check before buying

The Section 32 carries some owners corporation information, and you can also request the owners corporation certificate (a section 151 certificate), a snapshot of the corporation's status. Look carefully at:

• Fees: the current amount and whether they're likely to rise.
• Financial position: a healthy maintenance fund with reserves, versus an empty account and deferred maintenance.
• Pending special levies: the big one. Any levy raised, major repair floated, or structural issue under investigation.
• Insurance and major works: adequate cover, the date of the last valuation, and the age of the lift and roof.
• The rules: some are restrictive, banning pets, short-term rentals, or balcony BBQs, or requiring renovation approval.
• Recent minutes: the last couple of years of AGM and committee minutes show what's actually being discussed and what's coming, which financials alone won't.

The minutes also reveal the committee. Some are active and well-run; some are dysfunctional or paralysed, which produces bad decisions for the building. And note whether the property sits under tiered owners corporations (an overall body plus smaller ones for zones), because that can mean paying into two pools of fees.

Cladding, and when to walk

Since the Grenfell fire in 2017, combustible cladding has been a major concern, and Victoria has assessed many buildings and ordered rectification. For any building that may be affected, get specific confirmation of whether it's been assessed, its risk rating, whether rectification is done, planned, or required, and who pays (the government covers part in some cases). Unresolved cladding can make a unit effectively unsaleable.

Red flags worth taking seriously: undisclosed pending special levies, significant defects (water ingress, structural, cladding), a drained maintenance fund with no plan, a pattern of disputes, a committee at war with itself, or expired insurance. None automatically mean don't buy; they mean understand what you're walking into and price it in.

The simple check: ask the agent for the owners corporation certificate, the last two years of minutes, the current budget, and any recent valuation or condition assessment. A vendor who provides them promptly is usually confident in the building; one who delays or evades is sometimes not. An hour on the documents beats discovering a $50,000 special levy six months in.

Sources

• Owners Corporations Act 2006 (Vic): the law governing owners corporations, including fees, special levies, records, and the section 151 owners corporation certificate.
• Consumer Affairs Victoria: Owners corporations: the regulator's guidance on how owners corporations work, fees and records, and buying into one.
• Cladding Safety Victoria: the Victorian body overseeing combustible-cladding assessment and rectification.

Sources verified 25 July 2026. Fee and levy figures are illustrative and vary by building.