Aurora shambles exposes deep flaws in Vic strata

An owners’ revolt at a 1000-unit apartment building in Melbourne has highlighted the crippling inadequacies of Victoria’s strata laws and tribunal system.

And it illustrates how a built-in lack of transparency puts all Victorian apartment owners at a serious disadvantage, certainly compared to other states.

The story, in a nutshell, is that two weeks ago an unprecedented 200 owners in the Aurora building – Melbourne’s third tallest with 1002 apartments – logged in to a four-hour online special general meeting of the block’s owners corporation,

In a state where non-attendance at strata AGMs is the norm, 20 per cent of the strata roll even connecting online is unheard of. 

The majority was intent on electing a new committee and removing the current chair. However, the incumbent, Hun-Jing Tiong has reportedly enjoyed the support of large numbers of overseas investors and resident owners – 75 per cent by some estimates – both in sheer numbers and voting power.

As in NSW and elsewhere, owners’ voting power is based loosely on the size and value of their apartments; it’s not one owner, one vote. The Aurora’s votes and proxies were still being counted at time of writing.

The chair’s opponents were protesting a series of dubious decisions, including the sacking of two building management firms from multi-million dollar contracts.

Both companies are now suing the owners corporation, with legal defence fees adding to the owners’ financial plight from potential compensation pay-outs.

According to reports in Melbourne’s Herald-Sun newspaper there are also three Victorian tribunal hearings underway as well as a number of unfair dismissal cases after building staff members were allegedly replaced with the strata committee’s supporters.

Meanwhile the committee is said to have imposed invalid fines and fees, including $50 for picking up takeaway food deliveries from reception and cancellation of residents’ key fobs when they were wrongly accused of running Airbnb lets.

According to newspaper reports, residents have complained to Victoria Police, City of Melbourne, Consumer Affairs and state politicians, only to be told it was a civil matter.

Whatever the rights, wrongs and culpability in this case, there is no doubt that it’s a shambles and there are a number of reasons for that which are unique to Victoria.

Transparency is one of the fundamental aspects of this “fourth tier” of local democracy.  However, unlike in NSW and Queensland, Victorian strata residents have no right to attend strata committee meetings, even as silent observers.

The Victorian tribunal service is in complete disarray with hearing dates for current cases now being put back to 2025.

It was only last year that Victoria limited proxy votes to five per cent of the strata roll per holder. But even with those restrictions, it would only have required the combined maximum proxies of the chair and three supporters to outvote the entire group of 200 opponents at the meeting.

Also Victorian strata owners do not have a strong independent voice like the Owners Corporation Network (OCN) in NSW or the Unit Owners Association of Queensland (UOAQ), in that state.

And there can be little doubt that, by now, a tribunal in NSW or Queensland would have appointed a compulsory strata manager to replace the Aurora’s committee and get everything on an even keel.

More worrying for Victorian owners is that, judging by posts on the Flat Chat website forum, many unscrupulous committees are taking advantage of the absence of any effective controls to ride roughshod over strata laws and regulations.

But when the authorities can’t respond and the media is only now taking an interest, it all feels so much like Sydney a decade or more ago.

This column first appeared in the Australian Financial Review.