Reading an Owners Corporation Certificate: The Financial Health Check Most Buyers Skip

If you're buying an apartment, townhouse, or any lot that shares a building or land with other owners, the single most useful financial document in your contract is the Owners Corporation Certificate. Under s.151 of the Owners Corporations Act 2006 (Vic), a vendor selling a lot that is part of an owners corporation must obtain the certificate and provide it to you as part of the Section 32 vendor statement disclosure, before you sign. It tells you what fees are owed, whether a special levy is looming, whether the building is properly insured, and whether the scheme is caught up in a legal dispute. Read it properly and you can price the risk before you're committed. Skip it, and you can inherit someone else's problems at settlement.

Why the certificate is a financial health check, not paperwork

An owners corporation (OC) is the legal body that all lot owners in a shared scheme belong to automatically. It collects levies, insures the common property, and pays for shared maintenance. When you buy in, you're not just buying your lot — you're buying a share of the OC's balance sheet, its obligations, and its problems. The certificate is the vendor's obligation to show you that balance sheet at a point in time.

The reason it matters so much is that owners corporation costs are not optional and not always predictable. Regular levies are one thing; a surprise special levy for major repairs is another, and it can be a substantial one-off charge per lot. The certificate exists precisely so you can see those pressures coming before you're locked in. This is doubly important when you're buying an apartment, where the shared building fabric — roofs, lifts, cladding — is exactly where the big, lumpy costs live.

What the certificate must legally cover

The Act requires the certificate to disclose specific categories of information. These are the five you should check line by line:

That last row is the one buyers most often underestimate. A "known liability" statement can flag a problem — say, an unresolved building order affecting the building — that hasn't yet been priced. There may be no dollar figure attached, but the obligation is real and the bill is coming. Treat any known-liability disclosure as a prompt to dig deeper, not a footnote.

Operating fund vs maintenance fund: read both

Owners corporation money usually sits in two distinct funds, and they tell you different things.

• Operating fund. Covers day-to-day expenses — cleaning, gardening, minor repairs, management fees. It's funded by the regular (usually quarterly) levy. A healthy operating fund means the routine running of the building is being paid for on time.
• Maintenance or capital works fund. A sinking fund for larger, less frequent works — roof replacement, major structural repairs, cladding rectification. This is the fund that absorbs the big, lumpy costs so they don't all land as a shock special levy.

For the capital works fund, there's an important legislative backstop: owners corporations above a lot-count threshold set by the Act and regulations are required to maintain a 10-year maintenance plan estimating future capital works costs. If the scheme you're buying into is required to have one, ask to see it. A well-funded plan that matches the building's age is one of the strongest signals of a well-run OC.

The tell to watch for is a maintenance or capital works fund balance that looks small relative to the building's age and size. That's a sign future special levies are more likely, not less — because the money to cover the next big repair simply isn't there yet.

Levies, arrears and interest

Levies are most commonly charged quarterly, apportioned by each lot's ownership or liability entitlement — so a larger lot generally pays a larger share. When levies go unpaid, they become arrears, and arrears can carry interest.

Here's a nuance that trips buyers up. The interest rate on overdue levies isn't fixed by the Act. Many owners corporations set an interest rate on overdue levies in their own registered rules — commonly around 10% per annum in practice (as at 2026). Because that rate is set scheme by scheme rather than by statute, don't assume it: confirm the actual rate against the specific owners corporation's rules rather than treating any figure as fixed.

Because those charges sit against the lot, the practical question is whether outstanding fees will be cleaned up at settlement. If they aren't adjusted, unpaid levies plus accruing interest can become your cost — a conveyancing detail worth nailing down early (more on that below).

Red flags to look for

The certificate rewards a sceptical read. These are the patterns worth flagging to your conveyancer:

1. A thin capital works fund. A maintenance/capital works fund balance that looks small relative to the building's age and size — future special levies become more likely.
2. Contingent-liability language. Any mention of a "possible deficit levy" or similar wording. This means a cost exists that hasn't been fully quantified or struck yet.
3. Repeated interest charges. Multiple separate interest charges on arrears over a short period — a sign of an ongoing collection problem, not a one-off late payment.
4. A low sum insured. A building sum-insured figure that looks low relative to a plausible full-rebuild cost for a building of that size and construction type. Under-insurance can leave owners exposed after a major event.

None of these automatically kills a deal — but each is a question you want answered before you sign, not after.

Why the certificate alone isn't enough

The certificate is a point-in-time financial snapshot. What it won't necessarily show is context. It may not reveal whether the owners corporation is actively tendering remediation works, whether a special levy is being discussed but not yet formally struck, or the tone of recent disputes between owners.

The practical way to see that context is the most recent AGM and committee meeting minutes. Minutes capture the conversations behind the numbers — the repair that's been argued about for two years, the quote that came in higher than expected, the owner who keeps voting down maintenance spending. Request them separately from the certificate itself; they're where the story lives.

What to actually do before you sign

Turn the reading into a checklist:

• Read the certificate for the specific lot being sold, not just the owners corporation as a whole. Arrears sit against the individual lot, so a healthy overall OC can still come with a lot that's behind on fees.
• Request the last one to two years of AGM and committee meeting minutes in addition to the certificate, to get the context the snapshot can't give you.
• If a special levy or known liability is disclosed, ask for any cost estimate that exists — even a preliminary one. A rough number is far more useful than none.
• Confirm with your conveyancer whether outstanding arrears on the lot will be adjusted at settlement, so you aren't inheriting someone else's unpaid fees plus accruing interest. If you're still choosing a conveyancer, this is exactly the kind of scrutiny you're paying them for.

How to read this guide

This explainer describes the disclosure obligations under the Owners Corporations Act 2006 (Vic) and the way owners corporation finances are typically structured. It is general information for buyers, not a substitute for advice on a specific certificate. The interest rate on overdue levies is set scheme by scheme in the owners corporation's own registered rules — the roughly 10% per annum figure quoted above (as at 2026) is a common market practice, not a statutory rate — so always confirm it against the actual rules. The exact scope of a 10-year maintenance plan requirement also depends on the scheme's lot count. Owners corporation legislation is periodically amended, so verify the currency of specific provisions with your conveyancer before relying on them.

Frequently asked questions

Who pays for the Owners Corporation Certificate?

The vendor is responsible for obtaining the certificate, because it forms part of their Section 32 disclosure obligation to you as the buyer. You should receive it before you sign the contract.

What is a special levy?

A special levy is a one-off charge beyond the regular quarterly or annual fees, usually raised to fund a specific major cost — a large repair, a legal matter, or building-order rectification. If one has been struck or is proposed, it must be disclosed on the certificate.

What's the difference between the operating fund and the maintenance fund?

The operating fund covers day-to-day costs like cleaning, gardening, minor repairs and management fees, and is funded by the regular levy. The maintenance or capital works fund is a sinking fund for larger, less frequent works such as roof replacement or major structural repairs.

Do I inherit unpaid owners corporation fees when I buy?

Unpaid fees sit against the lot, so they can become your cost unless they're adjusted at settlement. Confirm with your conveyancer that any outstanding arrears — and accruing interest — will be sorted out at settlement.

Is the certificate enough on its own?

No. It's a point-in-time snapshot and won't show context such as remediation works being tendered or a levy being discussed but not yet struck. Request the recent AGM and committee meeting minutes as well to see the full picture.

What interest applies to overdue levies?

The rate isn't fixed by the Owners Corporations Act. Many owners corporations set an interest rate on overdue levies in their own registered rules — commonly around 10% per annum in practice (as at 2026) — but because it's set scheme by scheme, always confirm the actual rate against the specific owners corporation's rules.

Check the building before you commit

An Owners Corporation Certificate only makes sense against the wider picture — the building's age, the suburb, and how the scheme has been run. Explore the suburb profiles and property-intelligence tools on Delora to put the certificate in context before you sign, and take your certificate, minutes and cost estimates to your conveyancer with specific questions ready.