68Obligations of initial owner

68 Obligations of initial owner

(1) Subject to subsection (3), the initial owner of land affected by an owners corporation must act honestly and in good faith and with due care and diligence in the interests of the owners corporation in exercising any rights under this Act.

(2) Subject to subsections (3) and (4), the initial owner of land affected by an owners corporation must take all reasonable steps to enforce any domestic building contract (within the meaning of the Domestic Building Contracts Act 1995) entered into by the initial owner in respect of land in the plan of subdivision providing for the creation of the owners corporation.

S. 68(3) amended by No. 4/2021 s. 36(1).

(3) Subsections (1) and (2) apply to an initial owner only while the initial owner is the owner of a lot to which is, or the lots to which are, attached the majority of the lot entitlements of the lots affected by the owners corporation and only until the end of the period of 10 years following the registration of the plan of subdivision.

(4) Subsection (2) applies only to the enforcement of a breach of contract—

(a) to the extent that it relates to the common property affected by the owners corporation; and

(b) of which the initial owner is aware or ought reasonably to be aware.

S. 68(4A) inserted by No. 4/2021 s. 36(2).

(4A) The initial owner of land affected by an owners corporation or an associate of the initial owner must not—

(a) be appointed as the manager of the owners corporation; or

(b) vote on any resolution of the owners corporation that relates to a defect in or on a building on the plan of subdivision.

S. 68(4B) inserted by No. 4/2021 s. 36(2).

(4B) The initial owner of land affected by an owners corporation must not—

(a) propose an annual budget of the owners corporation that is unreasonable or unsustainable; or

(b) designate as a private lot what normally would be common property or services; or

(c) receive any payment from the manager of the owners corporation in relation to the manager's contract of appointment.

S. 68(5) substituted by No. 4/2021 s. 36(3).

(5) In this section—

associate, of the initial owner, means—

(a) a director of the initial owner; or

(b) an employee or agent of the initial owner; or

(c) a spouse, domestic partner, parent, brother, sister or child of the initial owner or the initial owner's representative; or

(d) a child of the spouse or domestic partner of the initial owner or the initial owner's representative;