Question: The strata committee pre-selected a manager and misled owners at the vote. Is this legal?
We recently held a meeting for owners to vote between two companies to appoint a new strata manager. Before the meeting, the committee had already decided to go with one company. They called the second company and told them not to bother attending, as the pre-selection had been done. On the night of the vote, owners were misled and told the second company had failed to appear, implying they weren’t interested in managing our strata. The pre-selected company received 100% acceptance and was awarded the contract.
Many of us believe this is a clear case of deception and manipulation of the voting process, and possibly not legal. We need clarification on the legality of what has happened before we take the matter further.
Answer: Committee members who misled owners may face personal liability, and can be removed by ordinary resolution at a general meeting.
Under the Strata Schemes Management Act 2015 (SSMA), the committee is set up to assist the owners corporation (OC) with managing its functions. As such, the committee is entrusted with a wide range of powers and discretion over the day-to-day management of the strata scheme.
section 260(1) of the SSMA negates liability for a committee member or an officer of the OC, where the committee member or officer of the OC has acted in good faith for the purpose of executing functions as such a person under the SSMA or any other Act:
260 Personal liability of officers of owners corporations and others
- A matter or thing done or omitted to be done by any of the following persons, or a person acting under the direction of any of those persons, does not, if the matter or thing was done or omitted to be done in good faith for the purpose of executing functions as such a person under this or any other Act, subject any of the following persons or person so acting personally to any action, liability, claim or demand:
- an officer of an owners corporation,
- a member of a strata committee.
- Any such liability of an officer of an owners corporation or a member of a strata committee attaches instead to the owners corporation.
In some cases, office bearer’s liability cover may be available under the OC’s insurance policy. However, there will typically be exclusions such as:
- Dishonest, fraudulent or criminal acts.
- Acts in conflict of interest.
- Acts outside the scope of the committee member’s authority, such as when a decision is made without a requisite general meeting resolution.
A claim for damages may be available against the committee members, where they have not complied with their duties owed to the OC and have engaged in dishonest, fraudulent or criminal acts.
In this instance, where the committee has misled the owners into thinking that the second strata managing company has failed to appear at the general meeting, the committee has not carried out their duties in good faith and they may be subject to personal liability.
Removal of committee member
A member of the committee may be removed by election of new office bearer by the committee.
If the committee is not cooperative in removing the member, one of many ways the OC can deal with a committee member who has misled the owners is by removing them from their position.
The owners may remove the member of the committee from their office at a general meeting by way of an ordinary resolution. If this occurs, the person is not eligible for election to the committee for a period of 12 months from the date of the resolution pursuant to section 32(5) of the SSMA.
Fraud in Crimes Act 1900
If the committee or one of its members has obtained a financial benefit by deception or dishonesty, the action of the committee or its members may be considered as fraud under the Crimes Act 1900:
192E Fraud
- A person who, by any deception, dishonestly:
- obtains property belonging to another, or
- obtains any financial advantage or causes any financial disadvantage,
is guilty of the offence of fraud.
Maximum penalty: Imprisonment for 10 years.
Under section 192E of the Crimes Act 1900, a person may be subject to a maximum penalty of imprisonment for 10 years if found guilty of fraud. The prosecution must satisfy the element of ‘deception’ and ‘dishonestly’. However, in the circumstances described, it does not appear as if the committee or one of its members has obtained a financial advantage.
This post appears in the August 2026 edition of The NSW Strata Magazine.
Matthew Jenkins
Bannermans Lawyers
E: enquiries@bannermans.com.au
P: 02 9929 0226
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