How to Run an Owners Corporation Tender in Victoria — The Complete Guide

Published by The OC Hub | theochub.com.au

Running an owners corporation tender doesn't have to be complicated. But without the right process, committees often end up either staying with a manager who isn't delivering — or rushing into a new appointment without comparing the market properly.

This guide walks you through every step of the OC tender process in Victoria: when to do it, how to run it, what to look for, and how to make a decision your whole committee can stand behind.

What is an OC tender?

An owners corporation tender is a formal process for inviting OC management companies to submit proposals for your building's management contract. It gives your committee the information it needs to compare managers side by side — on price, services, experience, and fit.

A tender isn't just about finding a cheaper manager. It's about finding the right manager for your building, with a contract that actually protects your owners corporation's interests.

When should you run an OC tender?

There's no single right time, but there are clear triggers that indicate a tender is worth running:

Your current contract is coming up for renewal. Most OC management contracts run for one to three years. When your contract is within 60–90 days of expiry, you have the opportunity to go to market without penalty. This is the most common time to tender.

Your management fees have increased significantly. Annual CPI increases are standard, but if your fees have jumped well above CPI or seem high compared to similar buildings, a tender will quickly tell you whether you're getting market value.

Your committee is unhappy with the current manager's performance. Poor communication, slow responses, unresolved maintenance issues, or lack of financial transparency are all valid reasons to explore other options. Note that you may be able to exit a contract early — see the FAQ section below.

Your building is a new development and you've inherited the developer's manager. Developer-appointed managers are selected before owners have any say. Once your committee takes control, it's worth reviewing whether that appointment is still the best fit for your building.

You haven't tendered in the last five years. As a matter of best practice, the OC industry generally recommends reviewing your management arrangement at least every five years, even if you're happy with your current manager. It keeps fees competitive and ensures accountability.

Step 1: Check your current contract

Before you do anything else, dig out your existing contract of appointment and read it carefully. You need to understand:

• When does the contract expire?
• What are the termination conditions and notice periods?
• Are there any penalties for early termination?
• What services are included in the base fee, and what attracts additional charges?

If you're unsure about your termination rights, the Owners Corporations Act 2006 (Victoria) does allow for termination at any time — but there may be financial obligations if you exit before the contract term is up. Understanding this upfront prevents costly surprises.

Step 2: Define what your OC actually needs

No two buildings are alike. Before you invite proposals, your committee should agree on what good management looks like for your specific property. Consider:

• How many lots does your building have?
• Is it residential, commercial, mixed-use, or industrial?
• How complex is your common property — does it include lifts, pools, car stackers, or specialist plant?
• What are the biggest issues your current manager hasn't resolved?
• Do you have significant capital works planned in the next few years?
• What does your committee value most — responsiveness, financial transparency, site visits, technology?

This becomes your scope of services — the specification you send to tendering managers. The more specific it is, the more useful the proposals you'll receive.

Step 3: Identify and invite suitable managers

Not every OC manager will be the right fit for your building. When compiling your tender list, consider:

Size and specialisation. Some managers focus on residential apartments; others specialise in commercial or mixed-use properties. Match the manager's experience to your building type.

Portfolio size. A manager who carries an oversized portfolio of buildings may not have the capacity to give your building the attention it needs. Ask how many buildings each manager in their team handles.

SCA membership. Look for managers who are members of the Strata Community Association (SCA Victoria), the industry peak body. SCA membership requires adherence to a code of conduct and professional development standards.

Reputation. Ask for references from current or recent clients with buildings similar to yours. Check Google reviews.

A well-run tender typically invites three to five managers to submit proposals. Fewer than three doesn't give you enough to compare; more than five becomes difficult to evaluate meaningfully.

Don't forget to invite your current manager. Their proposal will either confirm they're competitive — or make the case for change. Either outcome is useful.

Step 4: Issue your Request for Proposal (RFP)

Your RFP is the document you send to each tendering manager. It should ask for:

• A detailed fee schedule (base management fee, disbursements, additional service charges)
• A description of their management services and what's included
• Details of their team — who would manage your building, their experience, and their current portfolio load
• Their technology platform — how owners and committees access information, log maintenance requests, and view financials
• Their approach to site visits and committee communication
• Insurance certificates and compliance documentation
• References from comparable buildings

Send the same RFP to every manager. This is important — you can only make a fair comparison if everyone is responding to the same questions.

Set a clear deadline for responses, typically two to three weeks from issue.

Step 5: Evaluate the proposals

When the proposals come in, resist the temptation to go straight to the fee column. Price matters, but it's rarely the whole story. Evaluate each proposal across several dimensions:

Fee structure. What does the base fee cover? Are common services — like issuing OC certificates, attending the AGM, or managing maintenance requests — included, or do they attract additional charges? A low headline fee with many add-ons can end up more expensive than a higher all-inclusive fee.

Services and responsiveness. What are the manager's stated response times for urgent and non-urgent matters? Do they commit to regular site visits? How are maintenance requests tracked?

Team. Who would actually be managing your building day-to-day? What is that person's experience, and how many buildings do they currently carry?

Technology. Can owners access a portal to view levy accounts, lodge requests, and access meeting minutes? Does the committee have real-time visibility of financials?

References. Follow up on references. Ask specifically whether the manager delivers on what they promise, whether they're proactive or reactive, and whether the committee would appoint them again.

Create a scoring matrix to compare managers consistently across each criterion, weighted according to what your committee values most.

Step 6: Interview your shortlisted managers

Narrow your list to two or three finalists and invite them to meet with your committee. An in-person or video meeting reveals things a written proposal can't — how the manager communicates, whether they've actually read your RFP, and whether they understand your building's specific challenges.

Come prepared with questions. Good ones to ask include:

• What do you know about our building and our current situation?
• Walk us through how you'd handle [specific issue your building faces].
• How do you communicate with lot owners, not just the committee?
• What would the first 90 days of your management look like for us?
• What has gone wrong with a building you manage, and how did you handle it?

Pay attention to whether the manager listens carefully or just pitches. A manager who asks good questions about your building is a better sign than one who talks at you about their company.

Step 7: Negotiate the contract

Once your committee has chosen a preferred manager, don't simply accept the contract they present. OC management contracts are negotiable. Key areas to review:

• Term length. Shorter initial terms (one to two years) with renewal options give you more flexibility.
• Fee escalation. Cap annual increases — CPI is standard, but get it written in.
• Termination clauses. Understand exactly what "for cause" termination looks like and what notice periods apply.
• Scope of services. Make sure everything discussed verbally is captured in writing.
• Disbursements. Get a clear list of what disbursements are charged and how they're calculated.

If you're uncertain about any contract terms, consider seeking independent legal advice before signing.

Step 8: Manage the transition

A smooth transition from your old manager to your new one requires planning. Key steps include:

• Providing written notice to your current manager in accordance with the contract
• Requesting a full handover of all records — financial statements, meeting minutes, maintenance histories, contractor agreements, insurance policies, and lot owner contact details
• Introducing the new manager to your committee and key owners
• Notifying lot owners of the change in writing, with the new manager's contact details

Allow four to six weeks for a full transition. Your new manager should take the lead on coordinating the handover — if they've done this before, they'll know exactly what to ask for.

How long does an OC tender take?

A standard end-to-end tender process typically takes six to ten weeks:

• Weeks 1–2: Review contract, define scope, compile tender list
• Weeks 3–4: Issue RFP, managers prepare responses
• Week 5: Receive and evaluate proposals
• Week 6: Shortlist interviews
• Week 7: Committee decision, notify managers
• Week 8: Contract negotiation
• Weeks 9–10: Transition and handover

If your situation is urgent — for example, you need to exit a poor-performing manager quickly — the process can be compressed to two to three weeks.

Do you need to involve the full committee?

The committee has the authority to run a tender and appoint a new manager. Under the Owners Corporations Act 2006 (Victoria), this is within the committee's delegated powers unless lot owners have passed a resolution at a general meeting specifically removing this authority.

That said, good governance suggests keeping all lot owners informed throughout the process — particularly at the point of final decision. A brief written update to all owners before the new appointment is confirmed builds trust and avoids surprises.