Strata Life Guide: Serving on a Strata Committee

The Strata Committee undertake an important role in the management of their scheme, almost always on a voluntary basis. Committee members are usually owners within a scheme, but can included a person who is not an owner but has been nominated by an owner. Each year at the Annual General Meeting (AGM), the committee positions are vacated (the committee members are removed), and a new committee is nominated, elected and serves until the next AGM. More often than not, most committee members will volunteer year after year for several years. However, there is no limit on how long a person can serve on the committee.

The following guide is a starting point for any owner or Strata Committee member to better understand what the committee is, their various roles and responsibilities. As the full role is extremely vast, it is not possible to contain in short guide. The main sections of the Strata Schemes Management Act 2015 are 29-48. NSW Government also has a great resource about serving on a strata committee

Terminology

AGM – The Annual General Meeting is a meeting of all the owners to be held once per year
Strata Committee – A committee of volunteers who have been elected to represent the Owners Corporation by managing the day to day business of the scheme
Owners Corporation – The “corporation/company” that owns the building, land and common areas of the property
Lot – A lot is a defined section within the Owners Corporation. This could be an apartment, shop, townhouse, parking space, laundry, storage unit, etc.
Act – Strata Schemes Management Act 2015 (SSMA 2015)
Scheme – Same as “Owners Corporation”
Meetings:
- “General” meeting is for all owners
- “Committee” meeting is for committee members (owners welcome to attend)
NCAT – NSW Civil and Administrative Tribunal
Office Bearers – The committee position of Chairperson, Treasurer and Secretary

Why have a committee?

With a scheme of over say 5 lots, it starts becoming impractical for all owners to be directly involved every time a decision needs to be made. For the bigger decisions, all owners should be involved. For example, engaging an electrician to replace a broken light should not require all owners involvement, but raising levies or spending $100,000 on repainting the building should.

Essentially, a committee is tasked with running the day to day activities of the scheme. The committee may have the assistance of a Strata Manager and Building Manager (if applicable) to provide guidance and undertake a large portion of the committee’s duties.

Section 29 (1) of the Act requires the appointment of a committee. A committee consists of up to 9 members. In a scheme with 3 to 99 lots, the minimum is 1 member. In a scheme over 99 lots, a minimum of 3 members is required. In a 2 lot scheme, there must be a committee member to represent each owner.

If no committee is elected, there are 4 possible scenarios:

A strata managing agent be delegated full authority (section 52(1)(a));
The Owners Corporation administers the strata scheme (i.e., every decision is made at a general meeting) (section 29(4));
NCAT can order a meeting to appoint a committee (section 48); or
NCAT can order a managing agent to administer the scheme. This is called a compulsory appointment where the appointed Strata Manager will make the decisions for running a scheme (section 237).

Duties and Functions of a Committee

The duty of a committee, as defined by the Act is for each member to carry out his or her functions for the benefit of, so far as practicable, the Owners Corporation and with due care and diligence (section 37).

A majority of the duties and functions are usually delegated to a Strata Manager, where one is appointed. Where a Strata Manager is appointed, committee positions are still important and often take on a more general function such as meeting contractors on site, providing instructions to the Strata Manger, etc. See below for more information on the committee roles.

Functions of a strata committee as defined by the act:

A strata committee has the functions conferred on it by or under the SSMA 2015 or any other Act.
A decision of a strata committee is taken to be the decision of the Owners Corporation. However, in the event of a disagreement between the Owners Corporation and the strata committee, the decision of the Owners Corporation prevails.
The following decisions cannot be made by the strata committee—
- a decision that is required by or under any Act to be made by the Owners Corporation by unanimous resolution or special resolution or in general meeting,
- a decision on any matter or type of matter that the Owners Corporation has determined in general meeting is to be decided only by the Owners Corporation in general meeting.
An Owners Corporation may in general meeting continue to exercise all or any of the functions conferred on it by this Act or the by-laws even though a strata committee holds office

Committee decision making

Other than the specific duties of the office bearers that are listed in the Act (see more information below), no committee member has the authority to make a decision on behalf of the Owners Corporation. All decisions of a committee must be made at a properly convened committee meeting.

The main duty of an Owners Corporation is to control, administer and manage the common property for the benefit of all owners, tenants and occupants. The committee is elected by the Owners Corporation to ensure that these obligations are met.

Note that decisions made at General meetings override decisions made at Committee meetings. The Act also stipulates certain decisions which cannot be made at a Committee meeting, and must be made at a General Meeting.

Some key areas for an Owners Corporation include:

Repairs, Replacement & Maintenance – Sections 106-124 of the Act specifies that an Owners Corporation has a mandatory duty to properly repair and maintain common property. An owner may sue the Owners Corporation if it fails to meet this duty (section 106(5)).
Monies & Records – Sections 73 – 105 of the Act details financial matters, such as budgeting, raising levies to meet the budgets and producing records. The accounting records will allow owners to scrutinise expenses and the accuracy of the financial information. While the Committee is not able to raise levies (to be done at a General Meeting), they have an obligation to prepare budgets, issue levy notices, provided financial statements and manage the finances.
Insurances – Sections 160 – 175 of the Act sets out the requirements for insuring the building, including a damage policy (building insurance), workers compensation (if the scheme has employees), public liability and voluntary workers cover. The 2015 Act removed the requirement to get an insurance valuation, placing the responsibility to the committee or Owners Corporation to determine the appropriate replacement value. The committee can of course seek professional advice, such as from receiving a professional insurance valuation.
Administration of By-laws – Every strata scheme will have a set of by-laws that govern the rules and behaviour of people connected to the scheme. This includes owners, occupiers, tenants, mortgagees, visitors and the Owners Corporation itself.

Types of by-laws include:

- Behavioural by-laws – regulates the behaviour of residents in a scheme. Examples include making noise, parking on common property, keeping of animals etc.
- Common property rights by-laws – grants exclusive right or privilege for parts of the common property to an owner(s). Examples include permission for a top floor apartment to install a skylight, a renovation which changes/impacts the common property, signage rights for a commercial lot etc.
- Empowering by-laws – enables the Owners Corporation greater powers than provided for in the Act (but not at odds with the Act), such as a by-law enabling a minor renovation to be approved at a committee meeting instead of a general meeting.
- Record keeping – The Act requires the Owners Corporation to keep and maintain proper records and information regarding the administration of the scheme. The main records include: the strata roll; minute book; financial & accounting records; insurance documents; correspondence; reports; agreements; by-laws, strata plans etc. These records must be kept for a minimum of 7 years and be available for inspection by any owner, mortgagee or any person authorised by the owner as an interested party (e.g. a perspective purchaser).

Restrictions to committee decision making

There are 3 situations where the Act restricts the decision making of the committee:

Restricted matters – certain matters that require a general meeting for approval defined in the Act. Common examples include: approving an addition to common property; changes to the by-laws; appointing or dismissing a strata or building manager; approving or changing levies; and changing the insurance policy/coverage.
Removal of powers or additional obligations – at each AGM, the owners are required to determine if additional restrictions should be placed on the committee. Placing a restriction on the committee is rare, but could include a spending limit, or a limit on making certain decisions, such as appointing a new gardener.
Veto of proposed decision – The owners within a scheme can object to a motion being determined by the committee. If more than 1/3^rd of the owners (calculated by unit entitlements) objects in writing to the secretary before the meeting, the committee cannot vote on that matter.

Office Bearers & Committee Roles

Office Bearers (the positions of Chairperson, Secretary and Treasurer) are elected by a Strata Committee at the first committee meeting following the AGM. These positions are responsible for specific functions. One person is able to undertake more than one position.

The Chairperson – preside at meetings and ensure meetings are conducted in accordance with the Act.

The functions of the chairperson include the following (section 42 of the Act):
- to preside at meetings of the Owners Corporation and the strata committee of the Owners Corporation,
- to make determinations as to quorums and procedural matters at meetings of the Owners Corporation and the strata committee of the Owners Corporation
The Chairperson does not have the casting vote.
Who would make a good Chairperson? A leader, well organised, management experience, diplomatic nature, skilled at dealing with people with a thick skin to deal with any potential verbal altercations during a meeting.

The Secretary – manage and undertake administrative matters for the scheme.

The functions of a secretary include the following (section 43 of the Act):
- to prepare and distribute minutes of meetings of the Owners Corporation and submit a motion for confirmation of the minutes of any meeting of the Owners Corporation at the next such meeting,
- to give on behalf of the Owners Corporation and the strata committee of the Owners Corporation notices required to be given under this Act,
- to maintain the strata roll,
- to enable the inspection of documents on behalf of the Owners Corporation in accordance with this Act,
- to answer communications addressed to the Owners Corporation,
- to convene meetings of the strata committee and (apart from its first annual general meeting) of the Owners Corporation,
- to attend to matters of an administrative or secretarial nature in connection with the exercise of functions by the Owners Corporation or the strata committee of the Owners Corporation,
- any other functions conferred on the secretary under any other Act or law.
Who would make a good Secretary? A well organised, methodical person with good time management and communication skills.

The Treasurer – manage the finances for the scheme

The functions of a treasurer include the following (section 44 of the Act):
- to notify owners of any contributions levied in accordance with this Act,
- to receive, acknowledge, bank and account for any money paid to the Owners Corporation,
- to prepare any strata information certificate,
- to keep the accounting records and prepare the financial statements.
The treasurer may delegate the exercise of any of the treasurer’s functions (other than this power of delegation) to another member of the strata committee of the Owners Corporation if:
- the delegation is specifically approved by the strata committee, and
- the strata committee specifically approves of the function being delegated to that member, and
- the delegation is subject to any limitations as to time or otherwise that the strata committee requires.
While a delegate is acting in accordance with the terms of the delegation, the delegate is taken to be the treasurer of the Owners Corporation.
The committee may, by a written notice given to the treasurer, order the treasurer not to exercise any of the treasurer’s functions that are specified in the notice unless the treasurer does so jointly with another person so specified.
Who would make a good Treasurer? Well organised and methodical, good at numeracy, trustworthy. Accounting knowledge and computer skills would be useful, but isn’t essential.

Shall I join the Strata Committee?

Joining the Strata Committee will require work, commitment and time, so make sure you are prepared for what is involved. Strata Life is here to work with and help the committee by undertaking most of their responsibilities and duties. We provide guidance to the committee when they are required to make a decision. The responsibility of having to comply with all of the legislation can be time-consuming and confusing if you do not have trusted guidance.

For some schemes the ‘worst case’ scenario for a committee member may be facing unfriendly owners at meetings, in the passage way outside your unit or a knock at your door. This is never nice and may feel quite intimidating. This happens, but is fairly rare. Generally Strata Life will deal with disputes in the scheme and be available to chair meetings, removing committee members from the front line of a disgruntled owner as much as possible.

In most cases there is no payment for the countless hours spent volunteering your time on the committee. So why join?

Being involved with the day to day decisions, the committee effectively dictates the scheme’s short and long term future, as well as how funds are used. How well the scheme is maintained, quickly problems are fixed, cleaned, cared for, managed etc, will greatly impact the life quality for any resident in the building. This may include yourself or perhaps your tenant.

A well maintained and managed building will attract more potential buyers and renters, resulting in an increased demand for your building over your neighbours’ strata scheme. The increased demand will positively impact the price of your apartment, most people’s largest asset.

The key is a group of volunteers who care and are invested in the wellbeing of the scheme. So, regardless of your experience – sign up if you have a positive, can-do attitude wishing to maintain and enhance your strata scheme.

What does a high functioning committee look like?

A high functioning committee will look different from building to building. For example, the needs of a building with 5 units will be different to then needs of a building with 150 units. As such, the committee contributions will vary as well. There are however a few common traits which will remain the same, namely good communication, regular committee meetings and an equally shared workload.

Good communication – Often committee emails will include the Strata Manager for the Strata Managers advice, guidance and assistance. Committee members may also have a whatsapp group (or similar) in place to discuss smaller items and raise issues/concerns quickly with other committee members. Clear, to the point and direct communication is often more successful.
Regular committee meetings – If your scheme has a lot going on, having monthly or quarterly meetings for the committee to discuss items and reach resolutions will help the scheme tick along. Virtual meetings are getting easier and easier to do, even a quick 30 minute meeting on Zoom before work will help get decisions made.
Equally shared workload – Often a committee will be made up of 1 or 2 members who do 90% of the work, while the other 5 members tag along for the ride. The members doing most of the work get burnt out or start becoming resentful. Having the workload shared equally across all members is the key to a hard

Strata Life can provide advice and strategies on how to transition a dysfunctional committee into a high functioning committee based on your buildings needs and our extensive experience in working with successful committees.

Leaving the Strata Committee/filling a vacancy:

The number of committee members is typically set at the AGM when electing the committee. That number can only be changed by the owners at a General Meeting. If a committee member ceases being a committee member, this will create a vacancy on the committee.

There are 5 ways a committee member will cease being a committee member:

At the AGM the existing committee is stood down. A new committee is nominated and elected. Most committee members will continue nominating and being re-elected for many years continuously;
The committee member submits a written resignation notice;
The lot who nominated the committee member for election, is no longer eligible (other than being unfinancial). E.g., the lot who nominated the committee member sells their unit;
The member is removed by the Owners Corporation – This requires a special resolution at a general meeting; or
The person dies.

Can you fill a vacancy of the Strata Committee?

A committee may, at a strata committee meeting, appoint a person eligible for election as a member to fill a vacancy.

Can you have an acting member (proxy) of the Strata Committee?

A member of the Committee may appoint an owner (or Company nominee) to act in his or her place at a Strata Committee meeting. The owner does not have to be a current member of the Committee and whilst they are acting in this capacity they are taken to be a member. Unlike a proxy given at a general meeting, which allows the proxy giver to provide their ‘vote’ to anyone, an acting member must be an owner or company nominee. Also, unlike a proxy for a general meeting, an acting member appointment must be consented to by the Strata Committee present at the meeting. If the person appointed as acting is already a member of the Committee they can cast a vote separately from their own.

References/Additional information:

NSW Fair Trading Information pages, booklets, publications

Specific ‘Strata Committee’ NSW SSMA 2015 links

Specific ‘Strata Committee’ NSW SSMR 2016 links

About Strata Life – Strata Management Services

At Strata Life we strive to take the pressure of the day to day running of a strata scheme off of the shoulders of the committee members and owners. Whilst the nature of strata itself does mean that the owners/committee are responsible for the decisions, the pressure is reduced by having a proactive manager provide guidance with a plain sense approach and quickly actioning issues as they arise.

We appreciate Committee members often have full time jobs and busy lives. Add to this that the strata scheme is often your home where Committee members do not want to have to police other residents.

Our aim is to minimise the work and time where we can, take on the role of reminding owners and residents of the by-laws so that everyone can peacefully enjoy community living.

Our team has extensive experience with properties on the Upper and Lower North Shore, Hornsby and the Northern Beaches areas, with excellent local contractors and superior local knowledge.

Helpful links

Get in touch

Whether you’re an existing client or not, our strata managers are here to help with all matters relating to strata schemes and community living. Our office is open Monday – Friday, 9 am – 5 pm to answer your call or, for after-hours assistance, please complete our online enquiry form and we’ll get back to you the following business day.

Telephone : 02 9456 9965
Email: contact@thestratalife.com.au
Online enquiry form »

Disclaimer: The information contained in this article is general information only and not legal advice. The currency, accuracy and completeness of this article (and its contents) should be checked by obtaining independent legal advice before you take any action or otherwise rely upon its contents in any way. Strata Life disclaims any liability for negligence or otherwise in any way connected with this article.

Strata Living

Strata Life Guide: Serving on a Strata Committee