Victoria’s strata sector is entering one of its most significant legislative reform periods in decades. With new consumer protections already introduced and a formal review of the Owners Corporations Act underway, 2025 marks the beginning of major structural and legislative change. At last week’s LookUpStrata webinar, Fabienne Loncar from Moray & Agnew Lawyers guided attendees through what has changed, what is under review, and what Victorian strata communities should expect as new reforms begin to take shape.
Fabienne’s presentation explored the current review of the Owners Corporations Act, short-stay regulation, levy hardship issues, manager conduct, collective sale, the new Buyer Protections Act, amendments affecting privacy and planning, and the practical steps committees and strata managers should begin taking now.
VIC: Upcoming legislative reforms for Victoria’s strata sector – what’s changing and what to expect
Why the legislative review is happening
Fabienne explained that the reform process is not unexpected, reminding attendees that when the 2021 amendments came into force, “the government said that they would re-review those changes in five years. And true to their word, this is what they’re doing now.”
The terms of reference require the review panel to determine whether the 2021 changes achieved their intended outcomes. Key areas of focus include:
- Short-stay regulation
- Financial hardship and levy recovery
- Termination of strata schemes and collective sale
- Manager conduct, ethics, and consumer protections
Short-stay levy and behaviour concerns
The Short-Stay Levy Act 2024 was introduced at the start of 2025 with the intention of pushing investors from short-term rentals into the long-term rental market. A 7.12 percent levy applies to certain short-stay providers. Fabienne noted that although the goal was to influence housing availability, the changes have not necessarily had the desired outcome.
On behavioural issues, she stated that owners corporations still struggle to enforce short-stay conduct rules, explaining that the lack of enforcement cases since 2021 suggests the current framework is not working as intended.
New privacy risks for committees and managers
A major new development affecting all owners corporations is the introduction of a statutory tort for serious invasions of privacy, which now applies broadly across individuals, committees, and management companies. Fabienne warned that this includes “unauthorised CCTV or hacking of personal records or a misuse of private information,” and urged both committees and managers to consider whether appropriate privacy policies exist.
This change affects:
- Placement and use of CCTV
- Storage and handling of owner and tenant information
- OC and management company data practices
Many schemes have not yet turned their minds to privacy compliance, making early action essential.
The Buyer Protections Act – big changes for defective buildings
One of the most significant changes for Victorian strata communities is the Building Legislation Amendment (Buyer Protections) Act 2025. Fabienne distilled its implications for multi-storey buildings:
- For buildings three storeys and under, domestic building insurance will shift “from a last resort policy…to a first resort policy.”
- For buildings over three storeys, developers will be required to provide a mandatory 2 percent defects bond, held for two years.
Fabienne noted that this will be “a huge relief for owners corporations who are often left holding the bag for serious defects,” though the effectiveness of the scheme will depend on how it is implemented.
She also emphasised that no occupancy permit or plan of subdivision can be issued for buildings with unresolved defects.
Wider planning and consumer law reforms
The Consumer and Planning Legislation Amendment (Housing Statement Reform) Act 2025 introduces broad industry-wide changes aimed at increasing housing supply, improving oversight, and strengthening professional standards. Two changes are particularly relevant to strata:
- A new “officer in effective control” requirement for OC management companies (commencing 2027)
- Mandatory education for strata managers, real estate professionals, conveyancers, and others
Fabienne explained that businesses must start identifying who will hold the officer role, noting that it should be someone who is “in the business”, such as a director or senior manager who oversees operations.
Levy recovery challenges and the push for reform
One of the most disruptive events of 2025 was the Victorian Magistrates’ Court determining that it no longer has jurisdiction to hear levy recovery claims under sections 31 and 32 of the Owners Corporations Act 2006.
She also warned that from April 2025, managers must be using the updated prescribed fee notices issued by Consumer Affairs Victoria, or risk having matters struck out.
Collective sale and termination – the issue Victoria must confront
The review is also considering whether the current unanimous voting requirements for terminating strata schemes or altering plans of subdivision are still realistic. Fabienne highlighted that “buildings over 100 lots are normally very very difficult to get 100 percent consent,” and pointed to other states that have reduced thresholds to 75, 80 or 90 percent.
She questioned why Victoria has not modernised its approach and suggested reform is likely, particularly given ageing building stock and redevelopment pressures.
Case law lessons from 2024–25
Fabienne summarised several recent and relevant cases, using them to highlight emerging trends for committees and managers:
1. Renovation disputes and unreasonable refusals
In Gilbert v Whitford, VCAT accepted that refusal to approve renovations was based on “a personality conflict,” not genuine amenity concerns. Committees should consider imposing reasonable conditions rather than issuing outright refusals.
2. Noise disputes and mitigation of loss
In a student accommodation case, a claim for three years’ rent loss was rejected because VCAT found the true cause was COVID-related student shortages and that the owner had failed to mitigate their loss by reducing rent or advertising honestly.
3. Accuracy and clarity in committee resolutions
VCAT found a committee resolution invalid because its wording was unclear and formatted as a question rather than a clear decision. Committees must ensure resolutions are explicit, properly recorded, and passed by valid methods.
4. Levy recovery cost limits
Recent cases reinforce that excessive legal costs will not be recoverable in VCAT, and that committees must correctly identify what costs they are entitled to pass on.
5. When special resolutions are still required
VCAT clarified that even after the 2021 amendments, a special resolution is required for proceedings not involving a debt under $100,000.
Emerging themes and likely directions
Fabienne’s analysis suggests several reform themes are likely to emerge once the panel delivers its report on the 1 December 2025:
- Lowering voting thresholds, especially for termination of schemes or major changes
- Greater transparency and oversight of management conduct
- Broadening training and education requirements for strata managers and property professionals
- Strengthening privacy compliance
- Improving levy recovery frameworks, potentially reinstating court pathways
- Clarifying short-stay enforcement options
- Embedding more consumer protection for defects
What committees and strata managers should do now
Based entirely on Fabienne’s transcript statements, the following practical actions were highlighted:
Committees should:
- Review and update voting and meeting procedures
- Consider privacy policies for CCTV and personal information
- Examine renovation approval processes to ensure conditions are reasonable and decisions defensible
- Prepare for possible changes to short-stay rules and voting thresholds
- Begin discussions about levy hardship, payment plan processes, and communication with owners
- Conduct earlier building condition assessments, especially at the 2-year and 5-year marks
Strata managers should:
- Review conflict-of-interest and disclosure processes
- Implement workflow tools to ensure consistent compliance
- Train staff on conflicts, disclosure duties, and unfair contract terms
- Review management contracts against SCA templates or legal advice
- Prepare businesses for a future without commissions
- Identify who may serve as the “officer in effective control”
- Begin planning for mandatory training hours starting in 2027
Fabienne ended the session by saying: “This is a really exciting time to be part of the Victorian strata industry”.
Watch the full recording
This webinar delivered one of the clearest and most comprehensive breakdowns of current and upcoming reforms in Victoria’s strata sector. If you attended, watching the recording again will help reinforce the detail and plan for changes ahead. If you missed it, this is essential viewing for anyone involved in managing a Victorian strata community in 2025 and beyond.
Link to presentation: Upcoming legislative reforms for Victoria’s strata sector
Webinar Presenter
Fabienne Loncar Moray & Agnew Lawyers E: floncar@moray.com.au P: 03 8687 7319
This post appears in Strata News #771.
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