There are concerns an Allan government decision to not appoint an Owners Corporation Committee could turn Victorians off of apartment life.
The Allan government has been warned hundreds of thousands of Victorians are living with toxic owners corporations, some being used to thwart its efforts to protect apartment buyers.
The claims come barely a month after the state government rejected recommendations for a Owners Corporation Commissioner from an expert review into the troubled sector that impacts the lives of about 1.2 million Victorians.
In a recent example a Ringwood area apartment complex’s residents were given just one position on a committee after the developer used an illegal amount of proxies and teamed up with the building’s real estate agency strata manager to maintain control of it, despite multiple live-in residents nominating for the positions.
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The residents had hoped to use the committee positions to pass a vote to commence legal action to have defects remedied by the 25-unit building’s developer, but fear this will not be possible for at least another year after the developer used 17 proxy votes — flouting the 5 per cent cap introduced by the Victorian government in 2021.
Australian Apartment Advocacy chief executive Samantha Reece attended the Annual General Meeting on behalf of a resident, but was removed after warning the developer and strata manager they were breaching the proxy farming ban.
“I sat in a room and watched democracy get steamrolled and the strata manager was complicit,” Ms Reece said.
“Residents showed up, they nominated, they engaged — and it didn’t matter. Proxy farming handed control straight back to the developer.
“This isn’t governance. It’s manipulation — and it’s happening across Victoria.”
Melbourne’s inner suburbs are increasingly dominated by housing that comes with an owners corporation, with growing concerns they are not being governed as they should be.
The advocate estimated that “at least 50 per cent” of strata groups were in a situation she would describe as toxic.
“The AAA is receiving calls on a daily basis from Victorian apartment owners where their strata managers are unaware of or disregard the Owners Corporation Act,” Ms Reece said.
“This includes abuse of proxies, lack of action with defects and toxic and bullying cultures.”
She warned the Ringwood area example showed it was also giving developers a way to avoid obligations to repair defects under sweeping reforms to the construction side of the apartment sector pushed through earlier this year.
A government spokesperson said the state had introduced a “raft of reforms to clean up the sector and put power back in the hands of residents”.
“The first tranche of these reforms will give owners struggling to pay body corporate fees the right to a hardship payment plan and means they won’t face aggressive and relentless debt collection,” they said.
Recent changes to the Owners Corporation Act 2006 included clarifications of rules for owners to vote to start legal proceedings over matters up to $100,000.
The Allan government has recently passed new protections for apartment buyers to protect them from bad builds. Picture: NewsWire / Josie Hayden.
The government has also supported recommendations from a review of the Act to beef-up penalties for breaching rules, including the proxy cap and setting restrictions on the use of proxy votes by employees and associates of an organisation.
In 2021, proxy voting was capped at 5 per cent for complexes of 20 or more residences, and a cap of one person voting per lot in owners corporations with fewer than 20.
But enforcement of the rules will fall to Consumer Affairs Victoria after the government ignored a recommendation for an independent Owners Corporation Commissioner.
Both the ACT and NSW have opted to establish a commissioner.
Ms Reece said she wasn’t aware of any action undertaken by CAV in the space and that while the government was now a 10 out of 10 for protecting owners from bad builders after recent legislature changes, it was a one out of 10 for defending their interests in strata management.
She noted that when AAA asked apartment owners what they would buy next in 2023, only 39 per cent said it would be a house. In 2025, that share was 53 per cent, a figure she does not believe will improve in this year’s survey.
“That’s the first time in eight years we have seen the desire to buy an apartment drop and a rise in the response to buy a house and land,” she said.
Sam Reece fears Victorians will turn down apartment life without greater confidence in how they can interact with their owners corporation.
It’s a concerning data point for the government’s twin goals of building 80,000 new homes a year, and having 70 per cent of them created in established areas — the vast majority as townhouses or units that have an owners corporation.
“They are doing 66 per cent of the protections, but without that last third people will still not buy apartments,” Ms Reece said.
“The State Government owes apartment owners protection and the current model with Consumer Affairs Victoria is ineffective. Victorians need a Commissioner, licensing of strata managers, zero insurance commissions and owner education otherwise apartments will simply not get take up in Victoria.”
Ms Reece said a strata commissioner could also help resolve more minor issues currently heading to the Victorian Civil and Administrative Tribunal, with instances she was aware of headed to VCAT including complaints over a neighbours cat in a resident’s yard.
The Portside Apartments have an award-winning reputation for good building and strata governance.
However Ms Reece did note some apartment complexes’ were getting their strata commitments right and pointed to the Portside Apartments in Port Melbourne.
Despite being almost 20 years old, she noted it had been well maintained by the owners corporation and has a healthy maintenance fund.
It now has a number of subcommittees, including one for conflict resolution, and recently installed electric vehicle charging, which helped it to be named as AAA’s Enduring owners corporation award in 2025.
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