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As Australia’s housing trends shift towards more high-density living, strata and body corporate properties are becoming increasingly significant in the housing landscape. Strata committees are often involved to help take the lead on essential day-to-day tasks on behalf of the owners corporation or body corporate. They are a group of volunteer owners responsible for making key decisions on behalf of all owners to help manage the upkeep, finances, and administration of their building.
A well-functioning committee is the heart of a thriving owners corporation or body corporate. However, things might not always be smooth sailing. When it comes to working with others, it is vital to take a step back and critically assess the committee’s dynamic and operations. This type of reflection is not a critique but an opportunity to uncover potential obstacles and address any concerns that may lead to disputes and issues later down the track.
By taking proactive steps to identify and address any roadblocks, you can help foster effective communication and collaboration, keep the property running smoothly, and protect the interests of all lot owners. Explore how to recognise the most common committee challenges to avoid and the actions you can take to address them.
Most of us have experience working in a group in a professional setting where one person usually takes the lead, and others take a less active role. This can occur in a strata committee.
However, more unique challenges can arise when running a body corporate or owners corporation. Unlike traditional workplaces with a broader management structure, a body corporate committee often operates independently. A power vacuum can quickly be created if some members are not participating in key duties and decision-making processes.
To help maintain fairness and keep the property running smoothly, all members should be actively involved and fulfil their responsibilities to the committee. This includes contributing to discussions, attending meetings, making decisions, and carrying out specific duties assigned to their roles.
Even though the strata committee role is voluntary, it requires time and dedication from its members. Moreover, a legal requirement exists for members to conduct their responsibilities with ‘due care and diligence’ to perform their duties ethically and responsibly.
Raise issues and discuss any major decisions by scheduling annual general meetings and calling extraordinary general meetings if required.
Ask committee members to outline their responsibilities to gauge the activity level.
Have an agreed decision-making process in place, engage in discussions, and schedule committee meetings.
Strata committee members play an active role in making decisions and taking action on behalf of all owners. Although this is typically done to help benefit the whole community, it does not necessarily mean it is the best one for the body corporate or owners corporation.
If committee members advance their personal agendas or vested interests, they are not appropriately fulfilling their responsibilities. The focus should be on serving the best interests of the entire community rather than individual benefits. This issue is more common than you might think. Due to the closed structure of the body corporate or owners corporation, there is no need to answer to any other organisation or entity outside the system. Therefore, people can act largely autonomously.
Strata legislation usually requires committees to act in the best interest of the strata scheme without personal bias. Even when all members have genuine intentions, their interests can still come into conflict. Therefore, members should carefully review their state’s legislation requirements and avoid certain decisions that may benefit members or pose a conflict of interest. Although obligated by legislation and laws, they often have considerable freedom and operate largely unchecked.
For instance, the committee members may push to commission improvement projects that drive up property levies. While this is not a negative behaviour in and of itself, it may be problematic if this is against the wishes of the lot owners. The same goes for the inverse – if the committee is keeping levies low but not handling the desired improvement work or keeping up with regular maintenance. If the committee acts contrary to the wishes and needs of the lot owners, this is a sign of disconnect within the committee.
Committee members should carefully review their state's legislation requirements and avoid decisions that may benefit individual members or pose a conflict of interest.
Members with a conflict of interest should abstain from voting on related matters to maintain integrity, fairness, and trust.
Committee members must declare any conflicts of interest, such as financial benefits or relationships, that could influence their decision-making.
Body corporates and owner corporations operate in a democratic way. Depending on state laws, committee members can typically decide on matters that require a normal resolution, such as maintenance issues, disputes amongst residents or requests for permission to keep pets. However, when making changes around common property, most owners must vote on levy contributions or by-laws and building rules. Sometimes, there may be a party that loses or does not get their way. In most cases, this is not a problem. The majority will get their way, and these decisions should balance themselves over time.
However, when it comes to committee decisions, sometimes not everyone will see eye-to-eye. Behaving in a professionalism manner is crucial here. The committee should be able to put differences to one side and work with the common good of the body corporate or owners corporation in mind. If disagreements are not resolved, bullying or anti-social behaviour can fester, potentially causing bigger disputes. This may have several practical implications, including delays in work and increased costs due to inefficiency.
Have a chat with your committee members and find out if they think there is an inherent issue within the committee.
Raise any disagreements or issues with bullying at the next possible meeting.
Discuss how disagreements can be effectively resolved without major confrontation or inertia.
Levy collection is a cornerstone of committee work, providing the funds needed for maintenance and improvement projects to common property. If levy collection practices aren’t consistent and efficient, it could impact building upkeep and operations.
One of the key roles of the committee is to collect levies and any unpaid or overdue fees from residents. These funds help funnel adequate improvements and the general operation of the building. If levies are not being collected, cash flow will slow or stop, along with maintenance, upkeep and other operations.
This might not be solely the fault of the committee. It is common for levy arrears to exist in a body corporate or owners corporation to some extent. The question is, ’why?’. If the committee is proactively issuing contribution invoices and monitoring collections, with or without the aid of a strata manager. In that case, it is likely an arrears problem that stems from some owners not paying their dues.
If levy payments are not being properly collected, issued, or tracked, this could cause insufficient cash flow to maintain the operations of the building.
Raise any levy arrear issues at the next possible meeting.
Make sure that lot owners are being supplied with all the required information about their levies.
Work with committee members at the meeting to draft a workable plan for collecting levies in future.
AGMs are an important part of the operation of the body corporate or owners corporation. The AGM covers a range of different topics, such as:
Even if the committee has recently held a meeting outside the regular schedule, you will still need to hold an AGM to handle all of the above points. Different states may have unique requirements and guidelines regarding how these meetings should be held. Generally, AGMs are held within three months of the end of the previous financial year, even if lot owners or committee members feel nothing is pressing to discuss.
Problems can arise if meetings are missed repeatedly, which may hinder key tasks and duties from being performed and prevent the smooth operation. This is because certain major or financial decisions can only come into effect through an official meeting. This process allows owners to vote on key decisions about property management and helps keep them informed on important issues and outcomes through the agenda motions and minutes.
Call an extraordinary meeting if the AGM is overdue.
Discuss why the AGMs are not being adhered to.
Implement a workable strategy for AGMs moving forward.
The strata committee looks after day-to-day decisions representing the interests of the owners corporation or body corporate. These typically include collaborating with the strata manager to organise meetings, reviewing owner requests concerning by-laws or general housekeeping, approving repairs or maintenance tasks on common property, and keeping fellow owners updated on community priorities, objectives, or key projects.
One duty that can cause issues if neglected is repairs and maintenance tasks. When repairs are not taken care of or routine maintenance is missed, it can lead to increased repair costs, safety risks, disputes, and decreased property value.
• Routine maintenance refers to scheduled jobs that are designed to keep the property running as it should. As building components wear out and structural elements need to be replaced, the ongoing maintenance schedule should reflect this. The committee is responsiblefor this body of work.
• If something is unexpectedly broken or damaged at the property – perhaps because of bad weather or another unforeseen incident – this needs to be taken care of. The committee is accountable for these types of repairs.
Document the repair and maintenance tasks that have been missed.
Raise any roles or responsibilities that need to be fulfilled in the next possible meeting.
Put a clear plan in place to get duties back on track.
The annual budget plays a key role in determining levy payments for the year. However, this process may take some time and effort. The committee is responsible for estimating the expected income and expenses for the coming financial year. It is reviewed at the AGM, and once approved, it helps the owners corporation or body corporate make an educated decision on the fixed strata levies.
Sometimes, the committee needs to increase levies or introduce a special levy to compensate for a budget shortfall. However, poor processes, disagreements, and inactive participation could also lead to inaccurate forecasting and budgeting or ongoing failure of cash flow management.
Discuss the need to raise levies at the next possible meeting.
Discuss and identify what is causing the body corporate or owners corporation to go over budget.
Vote to restructure the committee or replace members if the problem is ongoing
You can address many problems on your committee simply by documenting them and raising them for discussion at the next possible meeting.
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The strata committee plays a vital function in protecting and maintaining an owners corporation or body corporate property. An efficient and well-functioning committee can be a real asset to all the owners.
Ultimately, it’s a team effort where all committee members work together with your strata manager to upkeep a well-maintained property, protect the investment of all owners and enhance community living within your property.
It’s important to remember that committee members are not expected to be industry experts. That’s the strata manager’s job. As industry professionals, they help guide your committee throughout their journey, and we provide a range of easy-to-understand resources to help your committee at every stage of their journey.
Having set up the very first strata scheme in Australia in 1948, we’ve come a long way in our knowledge and experience across various property types. Whether you are new to strata management or an active committee member, we have developed an extensive library of resources to assist you. Download our FREE Community Living guide on committee management. To find out more about the services we offer, click here for a free strata assessment.
This article is edited by Lauren Shaw Regional General Manager and Licensee-in-Charge on August 2024.
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