Strata Committees & How They Work in NSW

Introduction

A strata committee is central to the smooth operation of any NSW strata scheme, representing owners and managing the day-to-day affairs of the owners corporation. Whether you are a lot owner or a resident, understanding how your strata committee functions is essential for ensuring your building is well-maintained, financially sound, and compliant with legal obligations.

This guide explains the key roles, responsibilities, and processes that underpin strata committee operations, helping you navigate your rights and duties within your strata community. By understanding how the strata committee works, you can make informed decisions and contribute to a successful and harmonious strata environment.

Interactive Tool: Check If You Can Join & What Your Strata Committee Can Decide

What Is a Strata Committee & What Does It Do

The Role & General Responsibilities of a Strata Committee

A strata committee is an elected group of owners or their nominees who act as agents for the owners corporation. They are responsible for the day-to-day management and decision-making of the strata scheme, effectively serving as its controlling mind between general meetings.

The committee’s paramount duty is to control, administer, and manage the common property for the benefit of all owners and residents. To fulfil this obligation, they oversee several critical areas of the scheme’s operations:

• Repairs and Maintenance: Under the Strata Schemes Management Act 2015 (NSW), the committee must organise regular maintenance, arrange urgent repairs, obtain quotes for major works involving a strata building defect and implement the Capital Works Fund Plan to keep common property safe and liveable.
• Financial Oversight: Although the committee cannot set levies, it prepares annual budgets for the owners corporation, monitors expenditure, ensures bills are paid and confirms the scheme is adequately financed.
• Insurance Management: Arranging and reviewing compulsory policies—such as building insurance, public liability, workers’ compensation and voluntary workers insurance—falls within the committee’s remit.
• By-law Administration and Enforcement: The committee grants approvals for requests (for example, keeping pets or making minor renovations) and enforces by-laws by issuing notices to comply when breaches occur.
• Record-Keeping: Maintaining essential records—such as the strata roll, minutes of all meetings, correspondence, financial statements and contracts—ensures transparency and accessibility for all owners.

Legal Duties & Protections for Strata Committee Members

Members must adhere to specific legal duties when performing their roles. Section 37 of the Strata Schemes Management Act 2015 (NSW) requires each member to carry out their functions with due care and diligence, acting for the benefit of the owners corporation as a whole.

To safeguard volunteers from personal risk, the legislation also provides significant protection. Under Section 260 of the Strata Schemes Management Act 2015 (NSW), a committee member is not personally liable for any action, liability, claim or demand arising from something they did—or failed to do—in good faith while executing their functions.

If a liability does arise from a decision made in good faith, that liability attaches to the owners corporation instead, a key aspect of navigating owners corporation liability. This framework encourages owners to volunteer for committee positions without fear of being held personally responsible for honest mistakes.

Forming Your Strata Committee

Eligibility & Ineligibility for Strata Committee Membership

To serve on a strata committee, an individual must be an eligible candidate—a requirement designed to ensure fair representation for property owners within the strata scheme.

Eligible individuals include:

• Lot owners.
• Persons nominated by a lot owner who is not standing for a position themselves, allowing non-owners to participate.
• Nominees of corporations that own a lot.
• Co-owners of a lot, provided they are nominated by another owner who is not also a candidate. Only one co-owner per lot may serve on the committee at a time.

Conversely, certain individuals are excluded to prevent conflicts of interest and ensure financial compliance. Ineligible persons include:

• The building manager for the strata scheme.
• A property manager or leasing agent.
• Anyone connected to the original owner or developer who does not disclose this connection before the election.
• An owner who is unfinancial at the time the meeting notice is issued and remains so when the meeting begins.
• Members who become ineligible after their appointment must provide written notice to the secretary or chairperson, which is a key step in the process of how to remove strata committee members.

The Strata Committee Election & Nomination Process

The strata committee is elected annually at the owners corporation’s Annual General Meeting (AGM). Any individual wishing to join must first be nominated.

Key nomination rules:

• Sole owners may nominate themselves.
• Owners of multiple lots may nominate one person per lot they own.
• Co-owners can nominate another co-owner of their lot, provided the nominating co-owner is not also a candidate.
• An owner need not be financial to nominate someone; however, if the nominator is unfinancial at a committee meeting, their nominee will be unable to vote.

Strata Committee Size Requirements

The Strata Schemes Management Act 2015 (NSW) regulates committee size to ensure effective governance. While the owners corporation sets the exact number—generally between one and nine members—specific rules apply based on scheme size:

• Large schemes (more than 100 lots) must have at least three members on their strata committee.
• In a two-lot scheme, the committee must consist of the owners of both lots.

Key Roles & Responsibilities Within the Strata Committee

The Chairperson’s Role in a Strata Scheme

The chairperson’s primary function is to preside over strata committee and general meetings, ensuring they are conducted properly. Moreover, they guide each meeting according to the agenda and make decisions on procedural matters.

According to Section 42 of the Strata Schemes Management Act 2015 (NSW), the key duties of a chairperson include:

• Presiding at all meetings of the owners corporation and the strata committee.
• Determining whether a quorum is present, which is the minimum number of members required for a meeting to proceed.
• Making rulings on procedural matters that arise during meetings, such as declaring a motion out of order.

A crucial point to note is that the chairperson does not have a casting vote. In the event of a tied vote on a motion, the motion does not pass.

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The Secretary’s Role in a Strata Scheme

The secretary acts as the chief administrative officer for the owners corporation, handling essential record-keeping and communication tasks. This administrative function ensures that the strata scheme runs smoothly and complies with legal requirements.

Under Section 43 of the Strata Schemes Management Act 2015 (NSW), the main functions of the secretary involve:

• Meeting Administration: Convening meetings for both the strata committee and the owners corporation, and preparing and distributing minutes.
• Notices and Correspondence: Issuing required notices on behalf of the owners corporation and responding to communications addressed to it.
• Record Keeping: Maintaining the strata roll, the official list of owners and other key scheme details.
• Access to Information: Enabling owners and other authorised individuals to inspect documents and records.

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The Treasurer’s Role in a Strata Scheme

The treasurer serves as the chief financial officer of the owners corporation, responsible for managing the financial affairs of the strata scheme. This role is critical for ensuring the scheme remains financially healthy and can meet its obligations.

Under Section 44 of the Strata Schemes Management Act 2015 (NSW), the treasurer’s duties include:

• Levy Management: Notifying owners of any contributions levied and pursuing arrears through strata levy recovery.
• Financial Transactions: Receiving, acknowledging, banking, and accounting for all money paid to the owners corporation.
• Record Keeping and Reporting: Keeping accounting records and preparing annual financial statements for presentation at the Annual General Meeting.
• Information Certificates: Preparing any strata information certificates required, typically during the sale of a lot.

How a Strata Committee Makes Decisions

Strata Committee Meetings & Quorum Requirements

For a strata committee to make a formal decision, it must hold a properly convened meeting. Meetings can be called:

• By the secretary at any time.
• By a written request from one-third of the committee members.

Once requested, the secretary must convene the meeting:

• Within 14 days for most schemes.
• Within 28 days for large schemes with over 100 lots.

Before the meeting, all committee members and owners must receive at least 72 hours’ written notice, which includes a detailed agenda outlining all motions and items to be discussed.

A quorum is required for valid decisions. It is achieved when at least half of the voting committee members are present. If the committee has only one member, that member alone constitutes a quorum.

Voting Procedures & Disclosing Conflicts of Interest

Decisions at a strata committee meeting are made by a simple majority vote. Key voting rules include:

• Each committee member has one vote.
• A motion passes if more members vote in favour than against.
• The chairperson does not have a casting vote; tied votes mean the motion fails.
• Members with outstanding levy contributions at the time of the meeting are not entitled to vote.

A critical aspect is the disclosure of conflicts of interest. If a member has a direct or indirect pecuniary (financial) interest in a matter:

• They must disclose the nature of that interest at the meeting.
• They cannot be present during the discussion of that matter.
• They cannot vote on that matter.
• All disclosures must be recorded for transparency.

Restrictions on Strata Committee Powers

While a strata committee manages day-to-day affairs, its authority is limited by restricted matters that only the owners corporation can decide at a general meeting. These typically include:

• Setting or changing levies
• Creating, amending, or repealing by-laws
• Appointing or dismissing a strata manager or building manager
• Altering the common property

Owners may also impose additional limitations, such as spending limits on non-urgent maintenance items. Furthermore, owners holding more than one-third of the total unit entitlements can veto a committee decision by objecting in writing before the meeting. In such cases, the matter is referred to the next general meeting for all owners to vote on.

The Strata Committee’s Relationship with Strata Managers

Delegating Strata Committee Functions to a Strata Manager

It is common for a strata committee to delegate many of its powers and duties to a professional strata managing agent. This practice helps ensure the scheme is managed efficiently and complies with the detailed requirements of strata legislation. Under Section 52(1) of the Strata Schemes Management Act 2015 (NSW), an owners corporation can delegate some or all of its functions to a manager, including the specific roles of the chairperson, secretary, and treasurer.

A strata manager can be tasked with a wide range of responsibilities to support the committee and the owners corporation, including:

• Administrative and Secretarial Duties: This involves organising meetings, preparing and distributing notices and minutes, maintaining the strata roll, and handling all correspondence on behalf of the owners corporation.
• Financial Management: A strata manager typically handles issuing levy notices, managing the scheme’s bank accounts, processing invoices, preparing annual budgets, and producing financial statements.
• Repairs and Maintenance: They can arrange for day-to-day maintenance, source quotes for major works, supervise tradespeople, and manage the implementation of the capital works fund plan.
• By-law Enforcement: This includes issuing notices to comply with by-laws when breaches occur and providing guidance on strata dispute resolution.
• Insurance: The manager can be responsible for sourcing insurance quotes, renewing policies, and administering any claims that arise.

While a strata manager can handle most day-to-day operations, they cannot make decisions on “restricted matters,” which are reserved for the owners corporation to decide at a general meeting.

Appointing & Removing a Strata Manager

The appointment of a strata manager requires a majority vote at a general meeting of the owners corporation. The proposed management agreement must be attached to the meeting agenda to give all owners an opportunity to review its terms.

If a strata manager is appointed at the first Annual General Meeting, the agreement is limited to a maximum of 12 months. Subsequent agreements can be for a period of up to three years.

If the owners corporation is dissatisfied with the performance of a strata manager, it can take steps to terminate the agreement. The process for removal typically involves:

• Reviewing the Contract: The first step is to carefully review the terms of the management agreement, which will outline the conditions and procedures for termination.
• Passing a Motion: The owners corporation must pass a motion by majority vote at a general meeting to end the manager’s appointment.
• Notifying the Manager: Once the motion is passed, the owners corporation must provide written notice to the strata manager, officially terminating their contract.

Should a dispute arise during this process, or if the terms of the contract are unreasonable, the owners corporation can apply to the NSW Civil & Administrative Tribunal to resolve the strata dispute in NCAT.

Conclusion

A well-functioning strata committee is essential for the effective day-to-day management of a strata scheme, handling everything from maintenance and finances to by-law enforcement on behalf of all owners. Understanding the committee’s structure, roles, and decision-making processes empowers owners to contribute to a harmonious and well-maintained community.

For trusted expertise on any matters concerning your strata committee or its legal obligations, contact our strata lawyers for owners corporations at PBL Law Group. Our team of specialist strata lawyers in Sydney is ready to provide the practical guidance and support your NSW strata scheme needs to operate successfully.

Frequently Asked Questions