Buying a Home With No Owners Corporation

An owners corporation only exists in Victoria when a registered plan of subdivision creates common property, or in some cases shared services, under the Subdivision Act 1988 and Owners Corporations Act 2006. If your unit, duplex or townhouse has no owners corporation, there is no managing body collecting fees, arranging building insurance or organising shared driveway repairs. Even a two lot owners corporation, which is tier 5 under the Victorian system, is exempt from the usual duty to insure common property, so your conveyancer needs to check the plan of subdivision and Section 32 before you sign.

Most buyers use words like 'strata', 'body corporate' and 'owners corporation' as if they all mean the same thing. For a pair of villa units in Preston, a side by side duplex in Reservoir or anyone buying a townhouse in Melbourne, the legal set up can be much lighter, and sometimes there is no owners corporation at all.

What is an owners corporation in Victoria?

An owners corporation is the legal body that manages common property in a subdivision. If you want the plain English version of what an owners corporation is, think of it as the group of lot owners who share legal responsibility for shared parts of the land or building.

It is not created because an agent says 'body corporate'. It is created when the registered plan of subdivision shows common property or certain shared services, such as a shared driveway, garden, foyer, wall, drain or service meter.

That means the plan matters more than the sales brochure. Two homes can look almost identical from the street, yet one may sit inside an active owners corporation while the other sits on two separate lots with none. A Saturday inspection won't tell you.

When can there be no owners corporation?

There may be no owners corporation where the plan of subdivision creates separate lots with no common property and no shared services that need one. Each owner then owns their own lot, and the 'shared' features are dealt with through easements, fencing law, title boundaries or ordinary neighbour agreement.

This is common in older dual occupancy properties across Melbourne. You might see a shared driveway, party wall or dividing fence and assume there is a committee or manager in the background. In a no owners corporation set up, there isn't.

That doesn't make the property risky by itself. It just changes the questions you need to ask before you sign: who insures the building, who pays for the shared drive, and what happens if your neighbour refuses to contribute?

What are the three common set ups for units, duplexes and townhouses?

Most Victorian buyers have one of three set ups: a full owners corporation, a two lot owners corporation or no owners corporation. The labels sound small, but the insurance consequences can be large.

A full owners corporation with common property is the usual arrangement for apartment blocks and many townhouse developments. It may arrange insurance, collect fees, run meetings, keep records, set rules and manage common areas.

A two lot owners corporation can exist where two lots share common property or shared services. It is tier 5 under the Victorian system, the lightest category. It still exists as an owners corporation, but it is exempt from many larger scheme duties, including formal meeting procedures, financial statements, maintenance plans and the usual requirement to insure common property.

No owners corporation at all means no manager, no owners corporation fees, no annual meetings and no owners corporation insurance policy. Each owner deals with their own lot and negotiates directly with neighbours, subject to the title, easements and Victorian fencing rules.

All three can look like 'just a unit' when you're standing in the driveway. The difference sits in the title documents, not the bricks.

Who insures the building if there is no owners corporation?

If there is no owners corporation, each owner normally arranges their own building insurance. This is the biggest trap for buyers who assume 'the body corporate has it covered'.

In a full owners corporation, owners corporation insurance usually deals with required reinstatement and replacement cover for buildings on common property, plus public liability cover for common property. In a two lot owners corporation, that insurance duty does not apply in the same way. In a no owners corporation property, there is no owners corporation to hold a policy.

For a detached house, arranging your own building insurance is straightforward. For an attached duplex or pair of units with a shared wall, it can be more awkward. Your insurer may need to know exactly what you own, what your neighbour owns and how the shared structure is treated.

We've seen this come up when buyers head towards settlement believing the building is insured through a body corporate, only for the plan and Section 32 to show no owners corporation and no policy in the contract pack. That is a much better discovery before settlement than after a storm damages the roof or a fire affects a party wall.

Your lender may also ask for proof of adequate building insurance before settlement, so don't leave that question until the week you are booking movers.

Who maintains the shared driveway, wall and fence?

Without an owners corporation, shared features are usually managed through easements, fencing law and direct agreement between neighbours. There is no committee to email and no manager to chase quotes.

A shared driveway is often protected by a right of carriageway, which gives one or more owners the legal right to pass over part of the land. It usually tells you who can use the driveway, but it may not give a neat answer about resurfacing costs, drainage repairs or line marking.

A party wall, meaning a wall shared by two attached homes, depends on title boundaries, building law and any easement or notation on the plan. You generally cannot damage or undermine your neighbour's support, and renovation work may trigger protection of adjoining property rules.

Dividing fences sit under the Fences Act 1968. Neighbours usually share the cost of a sufficient dividing fence, and if one owner wants a more expensive fence, that owner may need to pay the extra. A fencing notice can start the formal process, and the neighbour usually has 30 days to respond.

For day to day life, this often works well. The key is knowing that shared repairs are a neighbour to neighbour issue, not something a body corporate will step in and organise.

What happens if you and your neighbour disagree?

If there is no owners corporation, there is no owners corporation dispute process to fall back on. Disagreements usually depend on the issue: fencing, easements, building work, nuisance or general property rights.

Fence disputes follow the Fences Act process. Shared driveway disputes may turn on the wording of the easement and how the driveway has been used. Building work near a boundary may involve building surveyors, protection work notices or council rules. The Dispute Settlement Centre of Victoria can be a sensible first stop before people spend money on formal proceedings.

Two lot owners corporations can also be tricky. When there are only two owners, every shared decision can feel personal. If both owners agree, repairs can be simple. If they don't, a small maintenance issue can sit there for months.

That does not mean you should avoid these properties. A low fee, low admin set up can be appealing. Just be clear that less paperwork also means fewer built in systems when something goes wrong.

How does your conveyancer check this before you sign?

Your conveyancer checks the plan of subdivision, the title, easements and the Section 32 to confirm whether an owners corporation exists and what it actually does. This is why contract review matters before signing, especially before an auction.

The plan of subdivision is the starting point. We look for common property, an owners corporation number, lot boundaries and any notes about shared services. If there is common property, we check whether it is a full arrangement, a two lot owners corporation or something more complex.

The title then helps identify easements, covenants and other restrictions. For a small unit or duplex, that may include drainage easements, party wall rights, shared access or service easements. These details can affect what you can do later, including extensions, fencing, landscaping and driveway changes.

The Section 32 should then match the title picture. If the property is affected by an owners corporation, the contract pack should include an owners corporation certificate or the required owners corporation information. That certificate can show fees, insurance, rules, minutes, maintenance information and known issues.

If there is no owners corporation certificate, we don't simply assume everything is fine. We ask why. Sometimes there is no owners corporation, which may be completely acceptable. Sometimes a certificate is missing when it should be there, which needs to be fixed before you make a decision.

What should you ask before buying a home with no owners corporation?

Before you sign, ask direct questions about title, insurance and shared maintenance. The answers should be clear from the documents, not just from the agent's verbal comments.

A useful pre signing checklist is:

Does the plan of subdivision show any common property?
Is there an owners corporation number on the plan?
Does the Section 32 include an owners corporation certificate?
If there is no owners corporation, who insures the building?
Are there easements for the driveway, drainage, services or access?
Is any wall, roof, fence, drain or driveway shared with a neighbour?
What would happen if a shared repair is needed after settlement?

If the answers are vague, pause before signing. In Melbourne's auction market, it is easy to feel rushed. The right document check can save you from buying a property that works differently from what you expected.

Frequently asked questions

Does every townhouse or unit in Victoria have an owners corporation?

No. An owners corporation only exists if the registered plan of subdivision creates common property or certain shared services. Many older two unit blocks, duplexes and villa units in Victoria are separate lots with no owners corporation. Your conveyancer confirms this by reading the plan of subdivision and Section 32.

How do I find out if a property has an owners corporation?

Check the plan of subdivision and the Section 32 vendor statement. If the plan shows common property and an owners corporation number, the Section 32 should include an owners corporation certificate or the required owners corporation information. If there is no common property and no certificate, there may be no owners corporation, but your conveyancer should confirm the title position before you sign.

Who insures the building if there's no owners corporation?

If there is no owners corporation, each owner usually arranges their own building insurance. This matters most for attached homes, such as duplexes, where a shared wall or roofline can make insurance more complicated. With a two lot owners corporation, the owners corporation is also exempt from the usual duty to insure common property, so owners should get insurance advice before settlement.

Is buying a home with no owners corporation a bad idea?

No. A home with no owners corporation can be a good purchase, especially if you want no owners corporation fees, no meetings and more direct control over your lot. The key is knowing the set up before you sign, arranging proper building insurance and being comfortable that shared repairs are handled directly with your neighbour.

What is a two lot owners corporation?

A two lot owners corporation is the smallest category of owners corporation in Victoria and sits in tier 5. It may exist where two lots share common property or shared services, but it is exempt from many duties that apply to larger schemes, including formal meeting procedures, financial statements, maintenance plans and the usual duty to insure common property. It exists legally, but buyers should not assume it operates like an apartment body corporate.

Who pays for a shared fence or driveway with no owners corporation?

A dividing fence is usually shared between neighbours under the Fences Act 1968, with each owner contributing to a sufficient fence unless a different rule applies. A shared driveway is usually governed by an easement, such as a right of carriageway, which may explain who can use the driveway but may not clearly set out repair costs. In practice, driveway repairs often need direct agreement between the affected owners.

About the Pearson Chambers Conveyancing team

Pearson Chambers Conveyancing is a Melbourne focused conveyancing firm helping buyers across Victoria understand contracts before they commit. We review plans of subdivision, titles, easements and Section 32 vendor statements for first home buyers every day. Checking whether a home has a full owners corporation, a light two lot arrangement or no owners corporation at all is part of the detail the PC team looks at before clients sign.

Sources we consulted

Need a Section 32 review before you sign?

Thinking about a unit, townhouse or duplex and not sure whether there is an owners corporation behind it? Pearson Chambers Conveyancing offers a complimentary Section 32 contract review so you can understand who is responsible for the building, driveway, fence and shared services before you commit.

Email contact@pearsonchambers.com.au.

General information only, current as at the date of publication. Victorian conveyancing rules and legislation change frequently. Please contact the Pearson Chambers Conveyancing team for advice on your specific contract.