Introduction

When it comes to managing a property within a strata scheme, understanding the roles and responsibilities of an Owners Corporation (or Body Corporate) and a Strata Committee is essential. These two entities play distinct but interconnected roles in ensuring the smooth operation and maintenance of shared properties. This article breaks down the key differences between the Owners Corporation and the Strata Committee, helping you understand their unique functions and how they work together to manage and maintain strata properties effectively.

What is Owners Corporation or Body Corporate?

An owners corporation, also known as a ‘body corporate,’ is a separate legal entity comprising all the owners within a strata scheme. When you purchase a property within a strata scheme, you automatically become a member of the owners corporation. Conversely, when you sell your property, your membership in the owners corporation ceases.

The owners corporation is responsible for managing and maintaining the common property, infrastructure, and shared amenities within the strata property. As a lot owner in a strata title property, you cannot opt out of the responsibilities that come with being part of the owners corporation. These responsibilities are defined by relevant laws and include various tasks necessary for the smooth operation and upkeep of the property.

Responsibilities of the Owners Corporation

The Owners Corporation is tasked with making important decisions and managing the overall strata scheme. Some of the key responsibilities include:

• Finances: Managing the financial aspects of the strata scheme, including budgeting and levies.
• Insurance: Arranging and maintaining adequate insurance coverage for the common property and the building.
• Record Keeping and Document Execution: Keeping accurate records and executing necessary documents.
• Repairing and Maintaining Common Property: Ensuring that all common areas, such as gardens, pools, and hallways, are well-maintained and in good repair.
• By-Laws: Establishing and enforcing by-laws that govern the behaviour of residents and the use of the property.
• Strata Meetings: Organising and conducting regular strata meetings to discuss and make decisions about the management of the property.
• Hiring a Strata Manager: Engaging a professional strata manager to assist with the day-to-day management of the strata scheme.
• Hiring a Building Manager: Employing a building manager to oversee the maintenance and operations of the building.
• Compliance with Laws: Following all relevant laws related to planning, building, safety, and workers.

To learn further about the roles and responsibilities of owners corporation, read our detailed analysis here.

What is Strata Committee or Strata Management?

A strata committee or strata management, previously known as an ‘executive committee,’ is a group of individuals elected by the owners corporation to assist in making decisions for the strata scheme. This committee plays a crucial role in the day-to-day management and operation of the strata property. 

To assist with its responsibilities, the owners corporation may appoint a strata committee or hire a strata manager. The strata committee is usually made up of elected owners who represent the interests of the broader group. It also usually includes a strata manager or strata managing agent, a professional who can manage the typical operations on behalf of the owners corporation. Owners corporations may also sometimes involve a strata management company offering expert management services which may be essential for larger strata communities. 

Common decisions made by a strata committee include:

• Managing Finances: Approving spending for the daily operations of the scheme, such as hiring repairers or arranging insurance.
• By-Law Compliance: Approving applications related to by-laws, like renovation requests, and issuing notices to ensure compliance with these rules.
• Common Property Maintenance: Deciding on what work needs to be done to the common property areas like driveway, foyers, paths, stairs, lifts, common gardens etc.
• General Meetings: Adding items to the agenda for discussion at general meetings.
• Property Improvements: Proposing improvements to common property for consideration at the next meeting.
• By-Law Changes: Suggesting new by-laws or changes to existing ones and addressing breaches of by-laws, such as noise complaints or parking violations.
• Approval of Renovations: Determining if renovations to individual lots that require Owners Corporation consent are approved, along with any restrictions.
• Development Applications: Deciding whether an owner’s development application has the Owners Corporation’s seal of approval.
• Property Cleanliness and Upkeep: Setting standards for how often common property should be cleaned and landscaped.

The strata committee represents the collective interests of the lot owners and works in partnership with the strata manager or building manager to ensure the smooth running of the property. The committee’s activities must align with the requirements of the owners corporation as well as comply with state and federal laws.

Difference Between a Strata Committee and Owners Corporation

Aspect	Owners Corporation	Strata Committee
Constituted by	The owners corporation is constituted by all property owners in the strata scheme.	The strata committee members are elected by the owners corporation during the Annual General Meeting (AGM).
Who cannot join	All property owners are automatically members of the owners corporation, so there are no restrictions on who can join.	Individuals who cannot join the strata committee include building managers, agents who lease properties within the strata scheme, persons connected to the original developer or building manager (unless disclosed in writing), and owners who owe money to the scheme at the time of the AGM.
Nature of participation	Participation in the owners corporation is mandatory for all property owners in the strata scheme.	Participation in the strata committee is voluntary, with members being elected by the owners corporation.
Key responsibilities	The owners corporation is responsible for managing finances, insurance, and repairs, ensuring legal compliance, maintaining common property, and electing the strata committee.	The strata committee is responsible for overseeing the day-to-day management of the strata scheme, making decisions on behalf of the owners corporation, reviewing owner requests such as renovations or by-law breaches, and coordinating with the strata and building managers.
Removing or replacing members	Members of the owners corporation automatically join or leave based on property ownership, so there is no formal process for removing or replacing members.	Members of the strata committee can be removed by a general resolution passed at a general meeting. The NSW Civil and Administrative Tribunal can also remove members if they are found guilty of misconduct or non-compliance. If a member leaves, the committee can appoint someone to fill the vacancy, provided the new member is eligible.

Key Takeaway

In summary, both the Owners Corporation and the Strata Committee play crucial roles in the management of strata properties, each with distinct responsibilities and levels of participation. While the Owners Corporation handles broader management duties and includes all property owners, the Strata Committee focuses on day-to-day decisions and is made up of elected members.

Understanding these differences is vital for anyone involved in a strata scheme, as it ensures that the property is well-managed and that all legal and communal responsibilities are met. For more detailed guidance on managing your strata property, or if you have specific questions, contact our law firm today.