Introduction

Managing a property within a strata scheme involves understanding the specific roles played by different governing bodies. Two key entities involved are the Owners Corporation (sometimes referred to as Body Corporate) and the Strata Committee (often associated with strata management functions). These groups have distinct yet connected responsibilities in the operation and upkeep of shared properties.

This article explains the main differences between the Owners Corporation and the Strata Committee. By outlining their unique functions and how they collaborate, we aim to help property owners and residents better understand how strata properties are managed and maintained effectively.

What is the 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
• 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 of the Owners Corporation 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.

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 typically includes a strata manager or strata managing agent, a professional who can manage the typical operations on behalf of the owners corporation. Additionally, owners corporations may 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.

Conclusion

Understanding the distinct roles of the Owners Corporation and the Strata Committee is fundamental for effective strata scheme management. While the Owners Corporation encompasses all lot owners and holds ultimate responsibility for the scheme’s overall governance, the Strata Committee, elected by the owners, handles the day-to-day operational decisions and management tasks.

Navigating the responsibilities and legal requirements within a strata scheme can be complex. If you require clarification on the functions of these bodies or need assistance with any strata-related legal matters, Contact PBL Law Group to consult with our expert NSW strata lawyers for tailored advice and support.