Strata Giant Faces Landmark Lawsuit Over Power Abuse Charges
In a significant legal development, apartment owners in prominent high-rises are initiating a class action lawsuit against Bluestone OCM, a major strata management firm in Victoria. This lawsuit alleges a systematic campaign of overcharging and aggressive debt recovery tactics that violate the Owners Corporations Act.
Background of the Legal Action
The class action is spearheaded by Wilbur Tong, representing owners within the 47-story Marina Tower located in Docklands. He claims that Bluestone’s practices have unfairly impacted many lot owners since 2020. The action targets all lot owners in Victorian strata schemes managed by Bluestone, focusing on those who received misleading notices regarding fees.
Details of Allegations
- Three defendants have been named: Bluestone OCM Pty Ltd and the owners’ corporations for the Marina Tower.
- Tong’s family reportedly fell behind on levies while trying to repair their unit, accruing over $24,000 in payments despite receiving claims of supposedly outstanding debts.
- According to the writ, Bluestone pursued Tong’s family for an alleged debt of $8,000, which they contest as overstated.
- In November 2024, a statement claimed they owed over $13,400, largely comprising legal and recovery costs.
Implications of the Case
Legal expert Aarahnan Raguragavan, representing the plaintiffs, emphasized the need for transparency in strata management. He expressed concerns that the sophisticated nature of Bluestone’s tactics may overwhelm the average lot owner, leading to unjust financial burdens.
Bluestone’s Response
While the allegations are serious, Bluestone OCM has denied any wrongdoing. The firm asserts that it adheres to ethical and transparent operational principles aimed at benefiting the communities it serves.
Broader Context and Legislative Scrutiny
This case arises amid increasing scrutiny of strata and owners corporation laws in Victoria. The government is actively reviewing these laws, particularly concerning excessive administrative and debt recovery fees, which have been deemed unlawful by VCAT.
- The Labor government is advocating for more residents to consider strata living.
- Minister for Consumer Affairs, Nick Staikos, is overseeing an independent review of strata laws, which will address various management issues including unethical practices and hardship provisions for owners.
Next Steps for Affected Owners
Potentia Litigation is inviting other affected individuals residing in properties managed by Bluestone OCM to join the lawsuit before it is officially lodged in late February. The outcome of this case may shape future regulations and management practices in Victoria’s strata schemes.
