The who’s who of strata management
It’s essential to understand each party’s role and responsibilities, when it comes to strata management
There are many people involved in strata management, regardless of how big or small your strata property may be. Each person, group and professional service provider involved needs to engage in a significant amount of work to keep a strata property running like clockwork.Do you know who exactly is involved in maintaining and improving your valuable asset, and what they actually do? In this article, we explore the roles and responsibilities of the following parties involved in strata management:
The owners corporation
Property owners automatically become part of the owners corporation when purchasing a strata property, and play an important role in the who’s who of strata management. Owners cannot opt-out of being part of the owners corporation and are legally responsible for carrying out tasks required such as maintaining the property’s common areas, infrastructure and shared amenities.
An owners corporation is responsible for:
- Ensuring owners and residents have a copy of relevant state legislation and by-laws or building rules, so they are aware of their rights, responsibilities and limitations
- Overseeing and managing maintenance and repairs of common property
- Managing strata finances and funds
- Issuing fee notices to owners
- Developing financial budgets and statement of accounts, and keeping proper financial records
- Keeping records and accounts of all strata property matters
- Appointing a strata committee to undertake strata management activities.
The strata committee
A strata committee plays an essential role in the administration of the property. Committee roles are usually undertaken voluntarily and require a significant investment of their own time.
Committee members and the nominated roles (chairperson, secretary and treasurer) are elected at an AGM to represent the owners corporation’s interests. They carry out decisions made at committee meetings on behalf of the owners corporation. They are often the first contact point for owners with a strata-related matter they wish to discuss or a common property maintenance issue.The following people are eligible for election to the strata committee:
- An individual who is an owner
- A company nominee of a corporation that is an owner
- A co-owner of a lot, as long as only one co-owner is a member at the same time
- An individual who is not an owner but is nominated for election by an owner who is not a member.
Strata committee responsibilities include:
- Maintaining an owners corporation register
- Overseeing day-to-day strata management and maintenance of common property
- Managing and maintaining strata insurance
- Making decisions, within their powers, on behalf of the owners corporation
- Reviewing owner requests such as pet applications, flooring applications
- Attending to by-law or building rule breaches
- Carrying out specific tasks as outlined by the legislation
- Reviewing financial information and approving invoices.
Examples of common decisions made by a strata committee include:
- What work gets done to the common property, and when
- Managing items for meeting agendas
- Proposing property improvements at annual general meetings
- Proposing changes to, or addition of, new strata by-laws or building rules
- Acting on a by-law or building rule breaches such as noisy parties or parking violations
- Making decisions on the degree to which common property is kept clean (i.e. the number of cleans per week, degree of landscaping per month)
- Responding to resident pet ownership applications and other applications.
Strata committees often appoint a qualified strata management company or building manager to undertake these duties to ensure a strata property’s smooth running, thus playing a crucial role in the who’s who of strata management.
In New South Wales strata committee functions are governed by the Strata Schemes Management Act 2015.
Section 29(1) of the Strata Schemes Management Act 2015 and Regulations 2016 (the Act) requires a committee of between one to nine members to be appointed to the committee.
Section 30(2) of the Act specifies that for strata properties comprising more than 100 lots, the committee must consist of at least three members.
An owners corporation with more than 13 lots must elect an owners corporation committee. For those with fewer than 13 lots, electing an owners corporation committee is not mandatory.
In Queensland, body corporate functions are regulated by an update to the Body Corporate and Community Management Act 1997 under the Body Corporate and Community Management (Standard Module) Regulation 2020.
The maximum number of committee members is seven. Different committee regulations apply under the Small Schemes Module the relevant legislation. The committee need only consist of a secretary and treasurer for properties with two or fewer owners.
Strata committees can adopt policies and procedures that help facilitate their roles and service the owners corporation effectively.
A sound governance framework can include:
- A timeframe in which the committee acknowledges an application has been received and when it must request further information or clarification
- An outline of the process by which the committee may refuse applications
- A timeframe in which an application may be refused if the applicant does not provide the necessary information
- A deadline for when a final decision is to be made
- A process for appeals if applicants wish to appeal a decision.
The strata manager
Strata management companies employ experienced professionals, referred to as strata managers, to administer the owners corporation, in line with strata legislation.
Under a service agreement, they manage matters relating to common property — the building areas shared amongst the owners such as pool facilities, foyers, hallways and communal gardens. They liaise with the strata committee to coordinate the owners corporation’s financial, legislative and compliance obligations such as:
- collecting and banking fees
- arranging property maintenance
- organising meetings
- taking out and maintaining required insurance
- attending to correspondence
- keeping and maintaining records, arranging audits and financial reporting and solving problems within the community living arrangements.
They are qualified to provide sound advice on legislative and financial matters, so your committee can make informed decisions that benefit all owners.
There are some tasks they are not able to conduct — in such instances, it may be wise to engage a property manager or building manager’s services.Having set up the very first strata scheme in Australia back in 1948, we’ve come a long way in our knowledge and experience across a variety of 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. Click here to download our FREE Community Living guide on committee management. For a consultation to review your current by-laws with the Kemps Petersons Legal team, click here. To find out more about the services we offer, click here for a free strata assessment.