REIV Owners Corporation Management Education Requirement Proposal Instructions

REIV Owners Corporation Management Education Requirement Proposal Instructions

Acknowledgement of Country
The Real Estate Institute of Victoria (REIV) acknowledges the Traditional Owners of Country throughout Australia. We pay our respect to them, their culture and their leaders past, present and emerging.

Executive Summary

The Owners Corporations Act 2006 (“the Act”) provides the foundational legislative instruction on the functions and responsibilities of owners corporations, formerly referred to as body corporate. The Owners Corporations Regulations 2018 (“the Regulations”) act as supplementary rules to the Act.

Owners corporation managers play a pivotal role in the supervision and upkeep of dwellings and common property under their charge. An integral part of the real estate sector, owners corporation management is growing in size, significance, and impact. It is important that Owners Corporation Managers are appropriately qualified and registered to deliver a high level of professional service.

The Real Estate Institute of Victoria (REIV) recommends introducing mandatory minimum education requirements for owners corporation managers to improve efficiency, transparency, and accountability in the sector.

Background and Context

The Act does not legislate minimum education or licensing requirements for those operating as owners corporation managers. Considering the level of responsibility and financial expertise required for the efficient control of the resources by owners corporation managers, including the oversight of physical real estate and the funds accessible for services rendered, the people managing these resources must be appropriately qualified and licensed. Trends around the intensification of dwelling choices indicate that owners corporation management will continue to be one of the fastest-growing real estate services.

ABS data from 2021 reflects a significant increase in the dominance of medium and high-density living across Melbourne. Between 2001 and 2021 alone, the percentage of units in a four-story or higher block increased from 15.3% to 49.4%, a more than threefold expansion. In absolute terms, the number of occupants living in these buildings increased substantially from 27,190 to 137,063, a growth of more than five fold. Furthermore, most new unit builds fall into the four-story and above category of dwellings, accounting for 95.2% of recent developments. These numbers demonstrate the significant growth in medium- to high-density living, resulting in a manifold rise in owner corporation managers with substantially larger financial and real estate portfolios.

REAL ESTATE INSTITUTE OF VICTORIA

These trends are anticipated to continue with the up zoning and intensification priorities identified in Victoria’s Housing Statement as the state aims to build 800,000 new homes over the next decade. These objectives will lead to a rapid acceleration of concentrated housing and, in turn, a substantial increase in the number of dwellings that will form a part of an owners corporation structure. Owners corporation managers are anticipated to manage significant volumes of funds on behalf of lot owners. This creates an impetus for improving the current legislation so that the sector is well prepared. Given the high impact of the activities undertaken by owners corporation managers and the diverse stakeholder network that interacts with them, it is in the best interest of all parties to ensure that clearly defined account abilities are in place to avoid misconduct, whether deliberate or unintentional.

Discussion

As noted, owners corporation management is a critical part of the real estate industry and is increasing in size, significance, and impact. People employed in the sector must be appropriately qualified and licensed to deliver the crucial level of professional practice required in the arena. The Housing Statement’s reference to mandatory training for agents and owners corporation managers demonstrates that the government appreciates the significance of appropriate education and training arrangements when delivering high-quality consumer services.

The well-documented objective of boosting Victoria’s housing supply includes the densification of housing as a central tenet. As these objectives are realised over time, there will be material increases in:

• the number of occupants living in dwellings under owners corporation management,
• the number of lots covered by owners corporation management,
• the volume of funds held by owners corporations management, and
• the diversity and complexity of amenities under the oversight and authority of owners corporation management.

Proposal

To improve the level of service, ensure better compliance with existing legislation, and build greater trust and transparency in the sector, the REIV proposes introducing mandatory minimum education requirements for individuals working in owners corporation management. The new education requirements would apply to Tiers 1, 2, and 3 owners corporations as prescribed by the Act. This ensures that the education requirements have universal application and accredited owners corporation managers can switch between tiers.

Entry-level qualification

The REIV recommends the introduction of minimum qualifications for individuals working in owners corporation management. The minimum qualifications would align with the requirements for working in other real estate services, i.e., the Agent Representative qualification, which is mandated at the Certificate IV level.

The options for a mandatory entry-level qualification above would be as follows:

• CPP40521 Certificate IV in Strata Community Management, or
• CPP41419 Certificate IV in Real Estate Practice with new elective units focusing on owners corporation management

Ownership of an owners corporation management business

Individuals taking the next step and progressing to own or manage a registered owners corporation management business should be required to undertake further mandatory training. These requirements would align with the Estate Agents (Education) Regulations.

The pathway options for the qualification above would be as follows:

• CPP40521 Certificate IV in Strata Community Management, or
• CPP41419 Certificate IV in Real Estate Practice with new elective units focusing on owners corporation management In addition to:
• CPP51122 Diploma of Property (Agency Management – Strata)

Transitional Arrangements

Transitional arrangements must be considered for people already working in the sector, which recognise their experience and allow them to fast-track their qualifications.

Transition rules would apply for a period of three (3) years from their introduction.

• Applicable to individuals with two to five years of continuous work experience within the preceding ten years as an owners corporation manager:
  Complete, either through study or recognition of prior learning, key units from the CPP40521 Certificate 1V in Strata Community Management, packaged as a skill set.
• Applicable to individuals with over five years continuous work experience within the preceding ten years as an owners corporation manager:
  Complete, either through study or recognition of prior learning, key units from the CPP51122 Diploma of Property (Agency Management — Strata).

Attracting other real estate professionals

Considerations must be extended to other real estate professionals to allow them to transition to the owners corporation management sector and ensure that new education requirements do not inadvertently create a staff shortage.

• Registered Agents Representatives must complete the skill set developed from CPP40521 Certificate IV in Strata Community Management
• Licensed Estate Agents to complete the skill set developed from the CPP51122 Diploma of Property (Agency Management – Strata)

Concluding Statement

The growing scale and impact of the owners corporation management space require a closer examination of the training necessary for people working in the sector. Owners corporation managers will play an increasingly significant role in Victoria, and mandating education requirements will ensure that Victorians receive high-quality real estate management services. The REIV is available to consult with the relevant Australian Skills Quality Authority or contribute to the Australian Qualifications Framework on the development of this program.

REAL ESTATE INSTITUTE OF VICTORIA
reiv(@reiv.com.au 039205 6666