The strata committee plays an important role in the administration and management of the common property. They serve as a representative on behalf of owners to help make decisions, oversee daily administrative tasks, maintain the property and fulfil the legal responsibilities of the body corporate or owners corporation.
However, there are certain restrictions to the committee’s decisions to help balance the distribution of power and protect the interests of all owners. Understanding and respecting these limits is essential to maintain transparency, legal compliance, and the overall harmony of the community. By adhering to the legal framework and best practices, strata committees can effectively manage their responsibilities in line with the interests of all owners.
During each annual general meeting (AGM), committee members are elected to serve a one-year term. They are typically responsible for running the owners corporation or body corporate property for the benefit of the owners by:
Looking after administrative tasks and the day-to-day tasks of the strata property.
Making decisions on behalf of the owners corporation or body corporate
Implementing legislative and compliance requirements.
The roles of chairperson, secretary and treasurer are considered office-bearing positions. They each come with unique duties and responsibilities. Separate individuals or one person can fill these roles. To manage effectively, the committee should meet regularly to make decisions and document them in meeting minutes for future reference.
The committee member’s roles usually include a fiduciary and legal obligation to undertake these duties with ‘due care and diligence’. Here are some main aspects that owners corporations, and body corporate committee members are liable for:
Each member must perform their duties for the benefit of the scheme and all owners, with due care and diligence.
Keep equity and equality at the forefront of decision-making.
No single member can make decisions on behalf of the committee. However, individual office bearer roles may perform specific tasks without a committee meeting, such as the secretary maintaining the strata roll (list of all owners).
Committee members should understand the governance processes in their scheme's by-laws, building rules, and other related legislation.
Remember this when voting or making decisions within your committee. Separate the collective interests of owners corporation or body corporate from the committee member's interests as an individual lot owner, as they may not always align.
The list of things a strata committee should do will depend on whether it is self-managed or a strata manager is engaged.
If a strata property is self-managed, the committee would need to carry out all tasks of the owners corporation or body corporate, such as issuing levy notices, arranging insurance quotes, preparing financial statements and keeping records.
However, these days, the emergence of outsourced services and growing compliance requirements have encouraged many owners to enlist the help of property management providers. If a strata manager is engaged, the committee’s functions become less task-related, and more management is needed to fulfil legal obligations. They can instead leverage the expertise of the strata manager and work hand in hand to achieve the property’s maintenance, administration, and legislative duties.
One of the most important things a strata committee should do is to appropriately maintain the common property following any terms and requirements agreed upon by the owners corporation or body corporate.
This can involve:
A strata committee should also review the capital works or maintenance plan and schedule the required works, ensuring enough budget is allocated for the works to occur. This may involve:
While the strata committee does their bit to manage common property, it is also the responsibility of all owners to support them by reporting damage and safety concerns.
A strata committee’s role in administering by-laws or building rules can be put into two categories — breaches and approvals.
Complaints about by-law or building rule breaches should initially be directed to the strata committee, who can decide whether to issue a breach notice to request for compliance or explore another course of action.
The strata committee is also responsible for reviewing applications for pet and renovation and alternation approvals.
Although the strata committee has no authority to pass new or modify existing by-laws or building rules, they can propose new or suggest amendments to an existing one. This proposal can then be included as a motion for discussion at a general meeting of the owners corporation or body corporate.
If a strata, owners corporation, or body corporate property has delegated responsibilities to a professional strata manager, the strata manager should store records on their electronic document management system.
However, the strata committee should still ensure record keeping is accurate. This includes ensuring agendas and minutes are correct and that the information required to be kept by legislation is passed onto the strata manager.
Information includes:
Good communication makes a massive difference to strata community living — there’s nothing like an open discussion to help turn things around. A strata committee should encourages conversations in meetings and promote balanced discussions to reach a consensus.
When there are disagreements, they are responsible for mediating matters and building rapport so that owners are heard and treated fairly. The committee is responsible for ensuring all owners are aware of and abiding by the by-laws or building rules.
Importantly, a strata committee should be the point of contact for other owners and building residents and should be able to answer strata-related questions regarding by-laws or building rules, finances, access information, and be ready to mediate discussions between neighbours.
The specifics of committee spending limits and reserved issues are governed by state legislation, and these can vary from state to state in Australia. Furthermore, the spending authority of the committee may also be outlined in the strata management agreement or the by-laws of the individual owners corporation or body corporate.
The extent of the committee’s spending limits can also be set by the owners corporation or body corporate.
These limits help set boundaries for when committees authorise maintenance and other day-to-day expenses without requiring a resolution.
Larger expenditures exceeding the committee’s spending limit usually require approval from the body corporate or owners corporation at a general meeting.
Committees are generally required to operate within the budget approved by the body corporate or owners corporation.
Any major renovations or changes to the common property that alter the appearance or structural integrity of the building may often require broader consensus from the body corporate or owners corporation. Therefore, approval through a general meeting resolution could be needed before any common property work can progress.
Significant changes or improvements to common property, such as structural modifications or extensive repairs, usually require a special resolution passed at a general meeting.
Some minor works might be within the committee’s authority, but it’s essential to check specific state regulations and by-laws.
Adjusting levies, which are fees paid by owners to cover the costs of maintaining and managing the strata scheme, is another area with defined limits. Setting or changing these amounts usually requires a resolution at an owners corporation or body corporate meeting.
Changes to unit entitlements could impact levy payment amounts and, therefore, generally require a special or unanimous resolution or application through the state’s relevant government body.
Introducing special levies for unforeseen expenses usually needs approval by the owners corporation or body corporate.
The power to make, amend, or repeal by-laws generally rests with the owners corporation or body corporate and requires a special resolution at a general meeting.
Any changes to by-laws must comply with relevant state legislation to ensure they are enforceable.
Strata legislation usually requires committees to act in the best interest of the strata scheme without personal bias. Therefore, members should carefully review their state’s legislation requirements and avoid certain decisions that may benefit members or pose a conflict of interest.
Committee members must declare any conflicts of interest, such as financial benefit or relationships, that could influence their decision-making.
Abstaining from decisions: Members with a conflict of interest should abstain from voting on related matters to maintain integrity, fairness, and trust.
While committee decisions are made on behalf of the scheme, there are some limitations to the committee’s decisions. For example, a strata committee cannot decide on matters requiring a unanimous or special resolution, such as dissolving a strata property, amending by-laws or building rules, setting or changing levies, and changing property owners’ rights, privileges or obligations.
This section offers a general guide to restrictions on committee decision-making in your state. However, to understand these restrictions comprehensively, please review your by-laws and the most recent legislation or consult with your strata manager.
A strata committee does not have the power to decide on any of the below, as all owners are entitled to vote on these matters at a general meeting of the owners corporation. Some common examples include:
In Queensland, a body corporate committee have restrictions on decisions that must be made by ordinary, special, majority vote, or resolution without dissent. Below are some common examples:
Committees can make decisions within the limits set by the owners corporation and only on matters that require an ordinary resolution (i.e. they do not need a general meeting) or on issues that a special or unanimous resolution must decide. Some common examples include:
Under section 11 of the Owners Corporations Act 2006, the owners corporation can delegate powers (outside of restricted matters) by special resolution to the committee at an annual general meeting.
This would mean that specific spending limits and requirements can be placed to dictate how the committee can spend the owners corporation funds.
In the Northern Territory, decisions made by the committee are supposed to represent the body corporate as a whole. However, exceptions exist regarding restricted matters requiring further processes and resolutions. Below are some examples of some situations that committees decision limits:
In the Northern Territory, the body corporate sets the maximum amount that should be spent on common property repairs or improvements. The committee cannot exceed this expenditure limit without a special or unanimous resolution. However, below are the key statutory restrictions outlined in the Unit Title Act:
Improvements to common property cannot exceed the prescribed amount unless:
If the proposed expenditure exceeds the limit, the committee should:
In Tasmania, the committee can only act on powers delegated to them by the body corporate and cannot decide matters requiring a unanimous resolution. Below are some examples of restricted matters:
On the other hand, the committee can make some decisions with a simple majority unless the building or complex’s rules say otherwise. Examples include:
Committee spending limits are not defined within the Strata Titles Act 1988 (Tasmania). Instead, it is common practice to agree on the expenditure amount at the annual general meeting.
Strata managing agents are trained professionals with knowledge and expertise to help committees maintain proper and timely compliance. The main functions that they can assist with can include areas such as:
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In conclusion, strata committees are crucial in managing and maintaining communal living environments. However, it’s important to note that their powers are not limitless. While they can make decisions about the upkeep of common areas, manage finances, enforce by-laws, and handle administrative tasks, there are boundaries to their authority. They cannot make decisions that infringe on individual lot owners’ rights, make substantial changes to common property without consent, or bypass any procedures outlined in the strata legislation. Understanding these limits helps to achieve a balanced living environment where the rights of all stakeholders are respected.
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. Or, 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.
PICA Group acknowledges the traditional owners as the custodians of Australia, recognising their connection to land, waters and community. We pay our respects to First Nations Peoples and Elders, past and present.