This article about the strata council has been supplied & written by Abode Strata Management and Mikayla Mason of Mark Hay Realty Group.
Roles in strata ownership, management, strata council and committees.
There is frequent confusion about the division of roles and responsibilities in a strata community. We often hear owners asking: owners … the Strata Company … the Strata Council … the Strata Manager… who does what?
Here’s a breakdown of who should be doing what within your strata community.
An owner is a person or people or company that purchases a strata lot and is registered on the Certificate of Title. Your ownership in some ways is similar to being a shareholder, with certain rights and responsibilities relating to this ownership. You must pay your levies and comply with the scheme’s by-laws, which can cover everything from renovations to pets. You have the right to contribute to decision making, to stand for a position on your committee and generally be heard. As an owner, you also have a share of unlimited liability for anything that goes wrong within the scheme, which is why strata insurance is compulsory in every state and territory.
The Strata Company
AKA Body Corporate, Owners’ Corporation, Strata Corporation, Strata Scheme.
The Strata Company consists of all owners collectively, who together form a legal entity. All owners are automatically members of the corporation, but tenants are not.
The Strata Company has a legal responsibility to:
- Maintain all common property including the structure of any buildings on the land;
- Insure the whole of the property for the full replacement value;
- Administer the finances and common funds of the group of owners;
- Secretarial functions including the conduct of meetings of members, documentation of minutes, and dealing with correspondence; and
- Resolve disputes involving members of the Strata Company and enforce its rules.
The Strata Council
AKA Owner’s Committee, Strata Committee, Body Corporate Committee, Executive Committee, Managing Committee, Committee of Management, the Committee or Council.
Generally, the administration of a Strata Council is undertaken on behalf of all the lot owners by a Committee. The committee is a group of owners elected at each Annual General Meeting to represent all the lot owners in the scheme. The Council provides governance and makes decisions on all matters that arise for the Strata Company, including the control, maintenance and repair of common property (in the absence of a Strata Manager).
Governance involves setting and monitoring the strategic direction of the Company, including setting goals and the course for management to achieve those goals. Strategic direction is usually documented in a Strategic Plan, which may have Strata Management and Strata company input but which will ultimately be the responsibility of the Strata Council.
The Strata Committee has other duties and discretionary powers that, when properly carried out, will in ensure compliance with the legislative Act and protect your investment. The Committee is responsible for such things as:
- Enforcement and making of by-laws.
- Managing and maintaining the common property for the benefit of all owners.
- Ensuring the strata company is sufficiently funded.
- Effecting proper insurance cover.
- Maintaining usual business records.
- Convening the required General Meetings.
- Appointing and supervising your Strata Company manager.
The Strata Manager
AKA Body Corporate Manager, Strata Managing Agent, Manager or Agent.
Strata Managers are engaged by the Strata Company or Council to assist the scheme’s Strata Council to manage the day-to-day affairs of the scheme. Strata Companies may make use of a Strata Manager to provide administration services, streamline processes and minimise conflict between owners; while others elect to self-manage. Many strata schemes are becoming larger and more complex, so owners find a Strata Manager manage the more time-consuming services and provide advice on:
- Financial management
- Maintenance of common areas as directed by the Strata Council
- Clerical and administrative support and follow up
- Ad hoc maintenance and contract support
- Implementation of the Strategic Plan
- Ensure requirements of the relevant legislation are met
- Advise on the legal requirements concerning the operation of the strata scheme
The role varies depending on the size and type of property and involves people management, requires someone who is organised and is able to handle difficult clients from time-to-time.
Hope that helps! If you’re still confused, you’re welcome to get in touch to ask questions.
Abode Strata Management is an accredited, WA-based boutique strata management company providing residential and commercial strata management. Abode specialises in efficient, tailored solutions and sensitive management of people, for small residential right up to large mixed-use developments. Follow Abode on LinkedIn.
Question: Is it legal to pay strata council members, ie Treasurer or Secretary a nominated sum as directed by an AGM meeting?
Answer: The Council of Owners are elected at the Annual General Meeting of the Strata Company to represent all lot proprietors in the Strata Company. The Strata Titles Act 1985 gives no specific direction in relation to the payment of Strata Council members, as the topic is not covered in the Act.
The Council of Owners is elected at the Annual General Meeting of the Strata Company to represent all lot proprietors in the Strata Company. This is a Voluntary position and one that does not acquire any privileges by being elected. The Council of Owners is required to carry out their duties for the benefit of all owners, without favour.
The Strata Titles Act 1985 gives no specific direction in relation to the payment of Strata Council members, as the topic is not covered in the Act. However, it is possible that there may be statutory obligations or guidelines that cover this under other applicable legislation, such as the Corporations Act. It would be our recommendation to seek advice from a legal practitioner on the matter, preferably one with a sound understanding of Strata Titles legislation.
It is also important for both the Strata Company and the individual to consider the tax implications of such a payment, and again it is recommended to seek advice from a suitably qualified professional regarding this.
If you are concerned by payments that have been previously or are currently being made to Council of Owners members, it would be best to raise your concerns or queries at a General Meeting of the Strata Company in the first instance. The Strata Company may not be aware of the possible legal and tax implications or may have already performed their due diligence on the matter prior to authorising payment.
Sadly, it is often very difficult to get owners willing to serve on the Council of Owners and it is often left to the same few owners year after year to carry out the works. Often they work tirelessly to make sure that things run smoothly within their scheme.
Whilst members of the Council of Owners don’t receive payment for their work, usually, they agree to hold office or nominate to office because of their invested interest in the common property and their investment. By holding a position on the Council of Owners they are contributing to the efforts needed to ensure that their property is well looked after.
This post appears in Strata News #174.
Have a question about the strata council or something to add to the article? Leave a comment below.
This information is not intended to be personal advice and you should not rely on it as a substitute for any form of advice.
Please note this advice was provided prior to the proclamation of the new strata title amendments and will be updated in due course.
- WA: How to handle a strata manager or council of owners who are not working in your interest
- WA: Q&A Strata Council Roles and Responsibilities – Correspondence
Looking for strata information concerning your state? For state-specific strata information, try here.