Question: Our committee spent $100,000 on legal services without a resolution at a general meeting or any notice to owners. Can we hold the committee accountable and recover the money?
Our strata committee spent $100,000 on legal services. There was no resolution at a general meeting of the owners corporation, and no notification about the legal matter at an AGM or committee meeting.
Can those who spent the owners’ money be held responsible? Can the costs be recovered? More generally, what’s the responsibility for unauthorised use of owners corporation funds?
Answer: There’s a clear legislative breach, but no straightforward mechanism to recover the funds directly from the committee members responsible.
The behaviour you’ve described appears to be in clear breach of the requirements of section 103 of the Strata Schemes Management Act 2015 (the Act).
Having said that, there is no clear mechanism within the legislation to enable an owners corporation to recover such unauthorised expenditure from the committee member or members who authorised it.
On the face of it, it appears there has been a breach of section 37 of the Act by a member or members of the strata committee. If the conduct referred to can be proven, there is the possibility of having those person(s) removed from the committee by order of the Tribunal, or having a compulsory strata manager appointed pursuant to section 237 of the Act. Consideration could possibly also be given to recovery of those funds from the strata managing agent who facilitated those payments being made without appropriate resolutions having been passed. This, however, would need to be undertaken in the context of the strata managing agency agreement and the limitations it may place on the ability of the owners corporation to make recoveries from the strata managing agent.
The questions raised contain a level of complexity which would need detailed and considered written advice before proceeding with any certainty.
This post appears in the November 2026 edition of The NSW Strata Magazine.
Warwick van Ede JS Mueller & Co Lawyers E. warwickvanede@muellers.com.au P: 02 9562 1266
