Strata Governance in NSW: Running a Committee That Decides Well

Who does what in strata governance in NSW?

Every strata scheme works as a small organisation, and the same questions apply as in any business: who decides, who acts and who is accountable.

Owners. The owners corporation consists of all lot owners. Owners vote on significant matters at general meetings, such as the budget, levies, major works and bylaw changes. They also elect the strata committee.

The strata committee. The committee carries out the functions of the owners corporation between general meetings, within the limits set by the legislation and any restrictions the owners place on it. It oversees the strata manager, monitors the budget and makes day to day decisions. Committee members are usually volunteers, which makes clarity and support all the more important.

The strata manager. The strata manager is typically engaged by agreement with the owners corporation to carry out specified functions, such as administration, record keeping, meeting support, levy collection and arranging insurance and maintenance. The manager acts under the terms of the agreement and the instructions of the owners corporation. Confirm the details of any delegations and agreements with your lawyer, as requirements can change.

A common source of tension is the assumption that the strata manager decides. In my view the better model is that the committee sets direction and the manager implements it, with reporting that lets the committee check progress.

How do you run a strata committee that makes good decisions?

Committees that decide well share a few habits. They prepare, they discuss options and they record their reasons.

A sound approach to meetings includes:

1. Circulate the agenda and supporting papers in advance, with quotes and reports attached.
2. State the decision needed for each item, rather than listing topics for discussion.
3. Compare at least two options on cost, risk and timing where practical.
4. Record the decision, the reasons and any actions with owners and dates.
5. Review action items at the start of the next meeting.

Chairing matters. A good chair keeps discussion focused, invites quieter members to speak and ensures minutes capture the substance. Meetings should also follow the notice and quorum requirements in the legislation, and your strata manager can help confirm these.

Documenting reasons is especially valuable. If a decision is later questioned, a record showing that the committee weighed alternatives and acted on advice is a strong foundation.

Consider also the skills around the table. Committees benefit from members with finance, construction, legal or project experience, though any engaged owner contributes. Where specialist knowledge is missing, engage independent advisers for key decisions.

How should you plan the capital works fund?

In NSW, the term for the long term sinking fund is the capital works fund. Owners contribute to it through levies, and it pays for major repairs and replacements of common property, such as roofs, lifts, facade works and plumbing.

The Strata Schemes Management Act 2015 requires owners corporations to prepare a capital works fund plan covering a set forecast period, and to review it periodically. Check the current requirements with your strata manager or lawyer, as details can change.

A plan is only as good as its inputs. A sound approach is:

• Start with a building condition assessment by a qualified consultant, covering structure, facade, roofs, services, lifts and fire systems.
• Convert findings into a schedule of works with likely timing and indicative costs.
• Test the schedule against the current fund balance and projected contributions.
• Smooth the spending, which lets levies rise steadily rather than spiking when a large item falls due.
• Revisit the plan each year, updating it for new information and completed works.

Owners often resist higher contributions. A transparent plan makes the conversation easier, because the committee can show what is being funded and why. Delaying necessary works usually raises costs later and can put the building at risk.

How should the committee handle conflicts of interest?

Conflicts of interest arise in every small community. A committee member may own several lots, have a business that quotes for work or be related to a contractor. Having a conflict is a normal feature of community life. Failing to declare it is the real risk.

A practical framework is:

• Ask members to declare interests at the start of every meeting.
• Record declarations in the minutes.
• Remove the conflicted member from discussion and voting on the relevant matter, where the legislation and advice call for it.
• Obtain competitive quotes for significant work, and document the selection reasons.
• Apply the same standard to the strata manager and any related businesses.

The legislation sets particular rules about disclosure and about agreements with strata managers and related parties. Take legal advice when a situation is unclear.

Behaviour matters as much as rules. Committees that treat transparency as a habit tend to enjoy greater trust from owners, and decisions made in the open rarely attract the suspicion that closed ones do.

What does good communication with owners look like?

Owners generally accept hard decisions when they understand them. Communication is therefore part of the governance task itself.

• Send a short update after each committee meeting summarising decisions and upcoming works.
• Explain big spending items in plain terms, covering why, how much, when and what happens if it is deferred.
• Provide a simple annual overview of the budget, the capital works fund and building condition.
• Make it easy for owners to ask questions, and respond within a reasonable time.
• Welcome new owners and tenants with basic information on bylaws, contacts and building rules.

Good communication also helps recruitment. People volunteer for committees when they believe the group is organised and respectful.

Final thoughts

Strata governance in NSW rewards patience, preparation and openness. When roles are clear, meetings are structured and the capital works fund is planned from real data, committees make decisions that owners understand and trust.

If you would like more practical Sydney property insight, subscribe to The Fine Print newsletter on LinkedIn and follow along for the next article.