What a strata committee should do and what it cannot decide

What a strata committee should do and what it cannot decide

A successful strata committee would do these things well, while avoiding making decisions that require a special resolution

The strata committee is responsible for overseeing that the legislative functions of the owners corporation are being executed. These include record keeping, finances and insurance obligations. However, the list of things a strata committee should do will depend on whether it is self-managed or if there is a strata manager engaged.

If a strata property is self-managed, the committee would need to carry out all tasks of the owners corporation, such as issuing levy notices, arranging insurance quotes, preparing financial statements and keeping records.

If a strata manager is engaged, the committee’s functions become less task-related and more management to ensure that legal obligations are fulfilled

1. Repairs, maintenance and upgrades

One of the most important things a strata committee should do is ensure common property is appropriately maintained.

This involves communicating with the strata manager about works that need to be undertaken, ensuring all tradespeople working on common property are licensed and insured, ensuring major works have been accounted for financially and scheduled in the appropriate timeframe before a safety issue occurs.

A strata committee should also review the capital works or maintenance plan and schedule in the required works, ensuring enough budget allocated for the works to occur.

This may involve engaging the appropriate consultants to review the condition of the building and its assets, creating a scope of works, meeting with tradespeople, obtaining quotations, applying for necessary permits or Development Applications, informing residents of works, and ensuring the works carried out following work, health and safety standards.

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.

2. Manage by-laws or building rules

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. They will then decide whether to issue a Notice to Comply (known as a Contravention Notice in Queensland and a Breach Notice in Victoria) or explore another course of action.

The strata committee is also responsible for reviewing applications for pet and renovation/alternation approvals.

The strata committee does not have the power to pass new, or alter existing by-laws or building rules. However, they can propose a new by-law or an amendment to an existing one and include it as a motion for a general meeting of the owners corporation.

3. Manage funds and finances

The owners corporation is responsible for ensuring their strata property is meeting its financial obligations. While a strata manager generally performs duties such as preparing budgets and financial statements and notifying owners about contributions, the owners corporation is still responsible for the manager’s actions.

This is where the treasurer’s role comes into play. It is their role to ensure a strata property’s financial obligations are executed correctly, there are adequate funds to cover expenditure, and that the financial records are made available to owners. The treasurer should review each invoice and check its accuracy before approving the payment.

The committee has a spending limit. Before they spend anything, they should ensure that money is formally included and available in the budget. If there aren’t enough funds, the committee can call a general meeting to change the budget or raise a special levy.
If a professional strata manager has been engaged, they will develop a budget forecast for the owners corporation for consideration for the upcoming year. This budget determines the levies.

The strata committee should receive a draft budget for review prior to it going out to all owners in the meeting agenda. The strata committee should then review the proposed budget and ensure it is sufficient to cover operational and capital expenses.

4. Keep records

If a strata 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:

• • Invoices
  • Receipts and expenditure
  • Correspondence received or sent to the owners corporation
  • Meeting minutes
  • Notices of meetings
  • Proxies
  • Defect or engineer’s reports
  • Any notices or orders given to the owners corporation
  • Insurance information.

The strata committee should also keep the strata roll up to date.

5. Manage meetings

Meeting management is a vital part of a strata committee’s role. This includes organising, conducting, recording and adjourning meetings as necessary.
The strata committee secretary should inform owners of upcoming meetings in advance by putting up notices on the notice board, handing in the notices in person or delivering notices via email or post (with the assistance of the strata manager). The secretary is also responsible for preparing meeting minutes, collating the action items, sharing reports and maintaining records.

6. Secure insurance

While the strata manager will arrange quotations from brokers for the required insurances for common property, the strata committee is responsible for nominating the sum insured, ensuring it provides adequate coverage and deciding if additional insurances are required.

7. Communicate with owners and residents

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 is responsible for encouraging conversations in meetings and promoting 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 the by-laws or building rules and abiding by them.

Importantly, a strata committee should be the point of contact for other owners and building residents. The strata committee should be able to answer strata-related questions regarding by-laws or building rules, finances, access to information and be ready to mediate discussions between neighbours.

What a strata committee cannot do

The powers of owners corporations, and hence their strata committees, are tempered by various legislative restrictions.
For example, a strata committee cannot make decisions on matters that require a unanimous or special resolution, such as dissolving a strata property, amending by-laws or building rules, setting or changing levies, and changing the rights, privileges or obligations of property owners.

New South Wales

• A strata committee does not have the power to make decisions on any of the below, as all owners are entitled to vote on these matters at a general meeting of the owners corporation:
• Improving or enhancing the common property (this requires approval by special resolution a general meeting)
• Setting the levy contributions (this requires approval by ordinary resolution a general meeting)
• Spending more than 10 per cent above the budgeted amount for any item, except if the owners corporation has resolved they can spend over this amount approved by an ordinary resolution a general meeting
• Commencing or obtaining legal advice, except where the anticipated costs are less than $1,000 multiplied by the number of lots, or $12,500 (whichever is the lesser). More than this amount requires approval by ordinary resolution passed at a general meeting
• Approving by-laws (this requires approval by special resolution a general meeting)
• Terminating the strata manager (this requires approval by ordinary resolution at a general meeting)
• Obtaining less than two quotes if an amount exceeds $30,000 in relation to any one item or matter (for large properties of more than 100 lots).

Queensland

A body corporate committee cannot make decisions about:

• Setting or changing a body corporate levy
• Changing the rights, privileges or obligations of lot owners
• Decisions that must be made by ordinary resolution, special resolution, resolution without dissent or majority resolution
• Paying money to committee members unless it is less than $50 incurred by a committee member attending a committee meeting, or not more than $300 reimbursed to a committee member in a 12-month period.

A committee cannot start legal proceedings, unless:

• To recover a liquidated debt against the owner of a lot
• Related to a proceeding where the body corporate is already a party
• For an offence under the by-law contravention provisions of the Body Corporate and Community Management Act 1997
• Or, a dispute resolution application is lodged with the Office of the Commissioner for Body Corporate and Community Management

Victoria
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 require a general meeting) or on matters that a special or unanimous resolution must decide. This includes changing or repealing building rules, setting levy contributions or improving common property. Committees cannot overturn a decision of the owners corporation.

Having set up the very first strata scheme in Australia back in 1948, we’ve come a long way in our knowledge and experience across a variety of 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.