The note to section 10 of the OC Act states that, "[a]n owners corporation executes a document by the use of its common seal." It does not say "must execute", and it is arguable that an owners corporation can execute a document without using the seal. The OC Act allows the owners corporation to formally delegate any of its powers and functions to the committee, the manager, a lot owner, chairperson, secretary or an employee of the owners corporation (s.11).

Proposed amendments to the OC Act under debate require that the delegation of powers may be made by resolution or by instrument of delegation and must be made at a general meeting. It is unclear whether the instrument must be signed at that meeting. The amendment would prevent a delegation by ballot and would prevent committee delegations to the manager or a lot owner under s.102(1) at a committee meeting.

Currently section 101 provides that the committee has all the powers and functions that may be delegated by the owners corporation, except in matters requiring a unanimous or special resolution. CAV takes the view that these powers are not automatic and must be delegated by instrument in accordance with section 11. The proposed amendments reverse this and will provide for automatic delegation of powers if no delegations are made.

An owners corporation may require that certain matters which are normally passed by an ordinary resolution must be dealt with only at a general meeting (s.82). These matters are prohibited from delegation or decision by ballot. The OC Act requires authorisation by resolution to use the common seal of the owners corporation (s.20).

To pass an ordinary resolution requires a majority of the votes that are available at a meeting where a quorum is present (i.e. greater than 50% attendance) (s.92(2)).

By special resolution (i.e. 75% of the total lot entitlements of all lots affected by the OC (s.96(a)), an owners corporation may lease or license the whole or any part of the common property to a lot owner or other person (s.14) or obtain a lease or licence over land (e.g. for additional parking) (s.15).

Legal proceedings must not be commenced unless authorised by special resolution (s.18(1)). This includes a counter-claim, an appeal, and an application to a court. A special resolution is not required for an application to VCAT to recover fees and other money or to enforce the rules of the owners corporation (s.18(2)).

A special resolution is not required to settle a legal matter and a committee resolution may be sufficient, unless that power is specifically reserved for a general meeting to determine. The better way to proceed is to obtain a special resolution to authorise a person or persons to make decisions.

Schedule 1 of the OC Act specifies 10 categories under which the owners corporation may make rules by special resolution. If the owners corporation does not make any rules or revokes all of its rules, then the Model Rules under Schedule 2 of the OC Regulations apply to it (s.139(2)). Current rules that are registered remain viable, provided they are consistent with the new OC Act. Rules must not unfairly discriminate against a lot owner (s.140(a)), they bind owners and occupiers (s.141), must be registered to have effect (s.142) and must be given to owners (s.143).

If the Model Rules provide for a matter and the rules of the owners corporation do not provide for that matter, the Model Rules relating to that matter are deemed to be included in the rules of the owners corporation.

The OC Act prescribes which records the owners corporation must keep (s.144) and the duration (s.145). However, it omits mentioning important records (including warrantees and guarantees from builders, manufacturers and contractors etc.) and other records that should be kept for life (such as architectural plans).

Records are available for inspection on request by a lot owner, mortgagee or purchaser at no charge, however, a reasonable fee may be charged for a copy (s.146). It is reasonable to assume that the term "purchaser" is a purchaser under contract and not a prospective purchaser, as this term is used elsewhere in the OC Act. It follows that privacy laws cannot be used as a reason to refuse an owner or purchaser access to these records, including the register of owners.

The owners corporation must maintain details of contracts, leases, licenses and other particulars in a register prescribed under sections 147 and 148. The register may be kept in an electronic or written form, however, care will be needed to exclude private information.

As members have unlimited liability for any debtsof an owners corporation, the owners corporation is not permitted to carry on a business (s.13 OC Act) but may participate in a registered company that carries on a business (e.g. a gym) as the business entity would be expected to have limited liability.

A subdivision with two lots (a "2-lot subdivision"), for example, two apartments or two villa units that usually share a common driveway, is exempt from compliance with many of the sections and divisions of the OC Act. For example, section 7(1) exempts a 2-lot owners corporation from compulsory insurance of the common property. Note that this could leave owners personally liable for an injury on common property if public liability insurance on common property is not included in the lot owner’s individual policy of insurance.