No Body Corporate, Cracked Towers and ‘Company Title’: A Buyer’s Due-Diligence Guide to Melbourne Apartments and Townhouses

You have found a Melbourne townhouse that looks right.

There are only a few homes in the development. The driveway is shared. One wall backs onto the neighbour’s bathroom. The agent says there is “no body corporate”, then explains that the owners simply manage everything themselves.

Is that a red flag?

Not necessarily.

But it is exactly the kind of property where buyers can make an expensive mistake by inspecting only the kitchen, bedrooms and courtyard.

When you buy an apartment, unit or townhouse with shared property or services, you may also be buying into a financial structure, an insurance arrangement, a maintenance history and a relationship with every other owner in the development.

Those things are largely invisible at Saturday’s inspection.

The same principle applies to a high-rise apartment with impressive views and a concierge, an older brick walk-up with modest owners corporation fees, or an unusual company title apartment.

The question is not simply whether apartments or townhouses are “good” or “bad”.

It is:

What exactly are you buying, who is responsible when something goes wrong, and how much evidence have you seen before you sign?

First: Victoria Does Not Really Have “Body Corporates” Anymore

“Body corporate” is still used conversationally, but the legal term in Victoria is owners corporation.

An owners corporation manages common property in a subdivision. Consumer Affairs Victoria explains that an owners corporation is automatically created when a registered plan of subdivision contains common property. That common property can include things such as gardens, passages, walls, pathways, driveways, lifts, foyers and fences. See Consumer Affairs Victoria’s explanation of owners corporations.

So when an agent says:

“There’s no body corporate.”

Do not stop there.

Ask what they actually mean.

They may mean:

there is an owners corporation but no professional manager

the owners corporation is self-managed

there is very little common property

it is a two-lot subdivision with reduced administrative requirements

there genuinely is no owners corporation because the ownership structure is different.

Those situations are not interchangeable.

Is a Self-Managed Owners Corporation in Melbourne a Red Flag?

Not automatically.

Victorian owners corporations can be managed by their owners rather than by a paid professional manager. Consumer Affairs Victoria expressly recognises that some owners corporations are self-managed by a committee or lot owner. A paid manager, by contrast, must be registered and carry professional indemnity insurance. See Victoria’s rules for owners corporation managers.

For a development containing three or four straightforward townhouses and a shared driveway, self-management may be perfectly workable.

What matters is whether “self-managed” means actively and competently managed or simply nothing gets documented until something breaks.

The questions that matter

Ask:

Who is the secretary of the owners corporation?

Is there an owners corporation bank account?

Are fees actually collected?

What insurance is currently in force?

When was the last meeting?

Are minutes available?

Have any owners disputed repairs or costs?

Have special levies ever been raised?

Who maintains the shared driveway?

Who pays when shared plumbing fails?

Are there upcoming works nobody has budgeted for?

A four-lot owners corporation with modest fees, good insurance, clear records and cooperative owners may be healthier than a professionally managed 200-lot tower facing major defect litigation.

The management model by itself does not answer the risk question.

The records do.

“No Owners Corporation Fees” Is Not Automatically Good News

Buyers understandably like the sound of zero or very low owners corporation fees.

But there is a difference between low running costs and no provision for future costs.

An owners corporation can raise fees for administration, insurance and maintenance, and it can impose special fees for extraordinary expenditure. Consumer Affairs Victoria warns that poor financial management can expose lot owners to financial and legal consequences. See the Victorian guidance on owners corporation finances.

That makes a better question:

What future costs are these fees preparing for?

If an older complex has a roof, common driveway, stormwater infrastructure, fencing and shared services but virtually no money set aside, low fees may simply mean current owners have postponed expenditure.

The next owner may inherit it.

For larger owners corporations, Victoria imposes stronger maintenance-planning requirements. Tier 1 and Tier 2 owners corporations must have a maintenance plan and maintenance fund, while smaller Tier 3, 4 and 5 corporations are not required to have one, although they can choose to. Consumer Affairs Victoria explains the maintenance-plan requirements here.

That distinction is important.

A small townhouse development having no large sinking fund is not automatically non-compliant.

You still need to understand how the owners expect to pay for the next large repair.

What Should You Read Before Buying an Apartment or Townhouse?

This is where apartment due diligence becomes more important than the brochure.

Consumer Affairs Victoria recommends that apartment and unit buyers examine the owners corporation certificate attached to the Section 32 vendor statement, along with contracts, relevant agreements, annual general meeting minutes and the contract of sale. Its official apartment-buying checklist is here.

The owners corporation certificate is particularly important.

It can contain information about:

current annual or quarterly fees

whether fees on the lot are unpaid

special fees or levies already approved

repairs or maintenance that could create additional costs

owners corporation rules

resolutions from the latest annual general meeting.

Consumer Affairs Victoria also warns that Section 32 statements can have been prepared months before a sale. Buyers can request an updated certificate or arrange to inspect owners corporation records. See the official owners corporation records guidance.

Forge has a more detailed guide to what an owners corporation report can reveal when buying a Melbourne apartment.

The important point is not simply to obtain these documents.

Someone has to read them critically.

The Five Lines in Meeting Minutes That Should Make You Keep Reading

Owners corporation records can contain dozens or hundreds of pages.

The useful information is often buried in seemingly boring meeting minutes.

Pay close attention when you see references to:

“Water ingress”

One leak does not condemn a building.

Repeated reports affecting balconies, façades, basements or multiple apartments deserve closer investigation.

“Engineer’s report”

Find the report.

Do not settle for a minute saying it was “discussed”.

“Builder correspondence” or “legal advice”

Ask what the dispute concerns, where it stands and who is paying the legal costs.

“Special levy”

Establish whether the levy has already been paid, is outstanding against the lot, or whether another levy is likely.

“Works deferred”

This can be more revealing than completed repairs.

Deferred roof, waterproofing, façade, lift or concrete work does not disappear because owners voted against spending money.

Cracked Towers: Are Melbourne High-Rise Apartments a Bad Investment?

A crack in a wall is not something an online article can diagnose.

Neither is “high-rise” a diagnosis.

Melbourne does have documented experience with serious apartment-building defects, including combustible cladding, water ingress, structural issues and defective external-wall systems.

But buyers should be careful about turning that history into the claim that every tower is defective.

For example, Victorian Government research arising from the Cladding Safety Victoria program found that, among 359 buildings funded through that combustible-cladding program as at May 2023, nearly half had non-cladding defects. Those defects included structural, fixing, sealing and water-ingress problems. Read the Victorian Government’s findings on non-cladding defects.

That is significant evidence about the buildings examined.

It is not evidence that half of all Melbourne apartment buildings are defective.

The sample consisted of buildings already involved in a combustible-cladding remediation program.

For an individual buyer, building-specific evidence is therefore more useful than fear about towers as a category.

Before buying into a larger building, investigate:

known defect reports

façade and waterproofing issues

cladding history

building notices or orders

litigation involving builders or developers

insurance claims

current insurance cover

major works planned

special levies

maintenance-fund balances

recent engineering or fire-safety reports.

Forge’s analysis of Melbourne apartments in 2026 looks further at why different apartment types need to be assessed building by building rather than treated as one investment class.

What About the Older Brick Walk-Up?

The opposite mistake is assuming that an older low-rise apartment must be safe because it has no lifts, swimming pool or glass façade.

Older blocks can have their own expensive lifecycle issues.

Roofs age.

Balconies need work.

Concrete deteriorates.

Old plumbing eventually needs replacement.

Waterproofing fails.

Drains and shared services can become expensive.

The attraction of a simple 1960s or 1970s block is that there may be fewer complicated building systems to maintain and, in some developments, a meaningful land component shared across relatively few homes.

But “old brick” is not a substitute for due diligence.

Forge has a dedicated guide to what to check before buying an older Melbourne apartment and how to investigate special-levy risk.

Shared Wall Plumbing in a Townhouse: Who Pays If It Leaks?

This is one of the most important questions for townhouse buyers — and one of the hardest to answer from an inspection alone.

Imagine your bathroom shares a wall with the neighbouring townhouse.

There are pipes inside or around that wall.

Who owns them?

Who fixes them?

The answer does not necessarily depend on which side of the wall the water appears.

You need to establish the title boundaries, what constitutes common property and whether the relevant service benefits one lot or multiple lots.

Victorian owners corporations have responsibilities for common property and for certain services benefiting multiple lots. Consumer Affairs Victoria also states that an individual lot owner must not simply repair a service benefiting more than one lot unless authorised by the owners corporation. See the rules for maintaining common property and shared services.

The plan of subdivision is therefore essential reading.

It defines the lots and common property and records lot entitlement and liability. Land Services Victoria notes that plans can be complex and that common property can include different parts of land, buildings and airspace. Read Land Services Victoria’s owners corporation guidance.

If responsibility for a shared wall, roof, pipe or driveway matters to your purchase, have the title documents interpreted properly rather than relying on an agent’s verbal explanation.

Two Townhouses Can Be Different Again

Victoria gives two-lot subdivisions some different treatment.

Consumer Affairs Victoria says a two-lot owners corporation must still care for common property and repair and maintain a service that benefits more than one lot.

However, two-lot subdivisions are exempt from some requirements that apply to larger owners corporations, including certain insurance obligations. The government specifically warns that individual owners can still face legal and financial risks and should consider appropriate insurance. See the Victorian rules for two-lot subdivisions.

There is another practical issue.

If two owners each hold 50% voting entitlement and disagree over a major repair, decision-making can become difficult. Consumer Affairs Victoria notes that some disputes in a 50/50 two-lot arrangement may ultimately require an application to VCAT.

So when somebody tells you:

“It’s only two units, so there’s basically no owners corporation.”

That is not a sufficient due-diligence answer.

Owners Corporation vs Self-Managed vs Company Title

These terms frequently get mixed together.

Owners corporation

You own your lot under the relevant title structure and become a member of the owners corporation responsible for applicable common property and services.

A professional manager may or may not be appointed.

Self-managed owners corporation

This is still an owners corporation.

The difference is that owners handle management themselves rather than paying a professional owners corporation manager.

Company title

This is fundamentally different.

Consumer Affairs Victoria explains that under company title, a company owns the entire land and building. The buyer purchases shares in that company, and those shares provide the right to occupy a particular unit.

There is no conventional plan of subdivision creating individually owned apartment lots, and company title is not regulated by the Owners Corporations Act in the same way as ordinary strata-title property. See Consumer Affairs Victoria’s explanation of company title.

That means a company-title buyer should examine the company’s constitution and rules carefully and obtain appropriate legal advice.

Do not assume it is simply “strata with a different name”.

Finance, renovations, leasing, transfers and occupancy can all depend on the documents governing that particular company.

Is Company Title Automatically Bad?

No.

But it is unusual enough in Victoria that buyers should understand why a property is company title before comparing it directly with conventional strata-title apartments.

Ask for:

the company constitution

relevant by-laws

financial statements

meeting minutes

insurance details

maintenance records

rules affecting leasing or renovations

details of any disputes

confirmation from your lender that the ownership structure is acceptable.

Most importantly, make sure your conveyancer or solicitor understands company title.

The structure itself is not necessarily the problem.

Buying it without understanding the structure is.

Are Studio Apartments a Sham?

No.

A studio is a housing format, not a scam.

But a small apartment can have a narrower pool of future owner-occupiers, investors or lenders depending on its size, configuration, title and building.

That changes the due-diligence question.

Instead of asking:

“Are studios bad?”

Ask:

“Who is realistically going to want this particular studio when I eventually sell it?”

Consider its natural light, ventilation, storage, usable floor plan, outlook, owners corporation costs and location.

Then confirm your finance before making an unconditional commitment. Individual lenders can have their own lending criteria for small or unusual properties, and those policies can change.

A cheap purchase price does not compensate for a property you later discover is difficult to finance or difficult to resell.

Insurance: The Document Buyers Forget to Read

Apartment buyers often focus on fees and sinking funds while barely looking at insurance.

That is a mistake.

Consumer Affairs Victoria says most owners corporations must hold reinstatement and replacement insurance for buildings on common property and public liability insurance for common property. Multi-storey developments can have additional insurance obligations. Two-lot subdivisions receive different treatment. See Victoria’s owners corporation insurance requirements.

Do not simply ask:

“Is the building insured?”

Ask:

Who is the insurer?

What is the insured value?

When was it last reviewed?

What is the excess?

Have there been significant claims?

Have premiums risen substantially?

Are any known defects excluded or affecting cover?

What insurance will I need personally?

An owners corporation certificate stating that insurance exists is the beginning of that investigation, not necessarily the end.

The Forge “Before You Offer” Apartment and Townhouse Checklist

Before making an offer on a Melbourne apartment, unit or townhouse with shared property, work through these questions.

Title and structure

What title am I actually buying?

Is there an owners corporation?

How many owners corporations affect my lot?

Is it professionally managed or self-managed?

Is it company title or stratum title?

What does the plan of subdivision say is private versus common property?

Money

What are the annual owners corporation fees?

What is in the maintenance fund?

Are there outstanding levies?

Have special levies been raised recently?

Are major works being discussed but not yet funded?

Are any owners substantially behind on their fees?

Building condition

Are there defect reports?

Has water ingress been reported?

Are there cracking, balcony or façade concerns?

Is there any cladding history?

Have engineers or building consultants been engaged?

Are there unresolved building notices or legal proceedings?

Insurance

Is the required insurance current?

What is the building insured for?

What claims have occurred?

Are there unusually large excesses?

Has insurance become difficult or expensive to obtain?

Governance

Read recent meeting minutes.

Check whether meetings actually occur.

Look for recurring disputes.

Identify deferred repairs.

Find out whether owners cooperate when money needs to be spent.

Your lot

Who owns the walls around the apartment or townhouse?

Who is responsible for pipes and services?

Is parking actually on your title?

Is the storage cage on title, common property or allocated by rule?

Are renovations restricted?

Are there rules affecting pets or use of the property?

Future needs

If you may eventually require safer entry, bathroom changes, rails, ramps or other accessibility work, investigate both the physical building and the owners corporation rules before purchase. Some modifications involving common property will require a different process from alterations wholly within your lot.

For buyers planning around ageing, disability or long-term accessibility, Mobility Access Modifications provides home accessibility modifications across Melbourne and can help assess what practical changes may be possible.

Why Buyer Advocacy Matters More With Apartments Than the Inspection Suggests

An apartment inspection can take 20 minutes.

The financial commitment may last decades.

That imbalance is why good Melbourne apartment buyer due diligence goes far beyond deciding whether you like the view.

A buyer’s advocate should be helping you ask:

What has happened in this building before?

What are owners discussing now?

What expense might be coming next?

How does this apartment compare with genuinely comparable sales in the same building and competing buildings?

Will another buyer want this floor plan in five or ten years?

Is a cheap asking price compensating for a genuine risk — or simply creating an opportunity?

Forge works with Melbourne apartment and townhouse buyers to assess the property and the structure around it, including owners corporation records, comparable sales and building-level issues before a buyer commits.

The Red Flag Is Often Not the Thing Buyers Think It Is

A self-managed owners corporation is not automatically a red flag.

A high-rise apartment is not automatically defective.

A 1970s brick block is not automatically bulletproof.

Company title is not automatically a bad purchase.

A shared bathroom wall does not automatically mean you will be paying for your neighbour’s plumbing.

And owners corporation fees are not automatically wasted money.

The real danger is uncertainty that nobody has investigated.

If the driveway is shared, find out who owns and maintains it.

If the building has cracks, find the engineering history.

If the fees are unusually low, find out what is not being funded.

If the apartment is company title, read the constitution.

If the owners corporation is self-managed, examine its records.

If the agent says, “There’s never been a problem”, verify that against the minutes, financial statements, insurance claims and maintenance history.

Because when you buy an apartment or townhouse, you are not just buying what you can see behind the front door.

You are buying a share of everything that can go wrong outside it.

Forge Real Estate Melbourne can help you blueprint your future by finding the perfect blue-chip property where your lifestyle needs and investment goals converge.

📞 Phone: (03) 91003633

✉️ Email: info@forgeproperty.com.au

🌐 Website: www.forgerealestate.com.au

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