"Every Strata Scheme in New South Wales, regardless of its size, has to have an Executive Committee. This committee is responsible for the many, many things that have to be looked after, co-ordinated, arranged and organised for the 'smooth' operation of a typical Strata Scheme. Here's a brief guide on what makes up the typical Executive Committee, what duties they perform and what personality traits and skills are needed to handle the various roles."
The Executive Committee (also known as the EC) is made up of representatives of the Owners Corporation elected at each annual general meeting and oversee the running of a Strata Scheme. The elected committee members, by default, become the voice of the Owners Corporation.
There can be a minimum of 1 and a maximum of 9 committee members. From the elected members, three office bearers or office holders must be chosen. These are the chairperson, secretary and treasurer. The duties performed and the skill set required for each of these positions are outlined further down this page.
The Department of Fair Trading has a truly fantastic Fact Sheet called the "Executive Committee of the Owners Corporation" that you just HAVE to read. It's a concise, to-the-point, reference summary of all things to do with the Executive Committee. If nothng else, get a hold of this. HINT: Click on the link above and you'll have it.
The Strata Schemes Management Regulation 2010 has a section called: PART 5 - ELECTION OF EXECUTIVE COMMITTEE OF OWNERS CORPORATION which contains a couple of things you should have a read of. They are:
Don't worry, it's no too heavy or involved - just something you need to be aware of.
Obviously, and especially with any Strata Schemes over 5 lots, it's usually not practical or workable to have EVERY owner involved directly in EVERY issue that arises. While the really big and important issues may require all owners to be involved there are others that don't. Things like "how come the grass didn't get cut this week?" or "we need to find an electrician to fix the problem with the intercomm" shouldn't require everybody's involvement and authorisation.
So, to avoid overly complicating things the OC elects (at a general meeting) an Executive Committee to oversee these day-to-day administration-type issues for the scheme. The 'elected owners' generally liaise closely with the appointed Strata Manager and, together, they work as a team to ensure the smooth running of the scheme.
NOTE - If there's no Strata Manager appointed then the Executive Committee is responsible for handling everything (including all the legal ramifications) in the running of a Strata Scheme.
Office holders are elected at the Executive Committee meeting following the Annual General Meeting. Even if there's a Strata Manager for the scheme and certain duties have been delegated to them, the secretary and treasurer are still able to exercise their powers, if they choose to do so. In most instances the Strata Manager normally performs all the functions of the secretary and treasurer who operate in a mainly supervisory capacity.
Go to the Meetings information page to read more about EC meetings and all the other types of meetings.
Under the NSW Strata Schemes Management Act 1996 the chairperson, secretary and treasurer have certain functions, some of which are listed below:
As mentioned elsewhere, many of the functions of the office holder positions described above can be (and usually are) delegated to the appointed Strata Managers. Obviously when this happens, the treasurer and secretary have a much easier time of things and can focus on the running of the scheme from a management perspective rather than having to worry about the logistical, accounting, compliance, legislative and legal side of things.
However, when under control of a Strata Manager, the treasurer and secretary need to liaise closely with that Strata Manager, approve those things that require approval and followup or instigate those tasks that have been or will be actioned by the Strata Manager.
Remember- if your scheme is self-managed you'll have to do it all - from producing & distributing the levy notices to collecting the levies, from producing and sending out agendas and minutes to handling disputes at NCAT (the tribunal), from looking after all the accounts and records to keeping up with the legislation and compliance requirements. To see exactly what needs to be done by the self-manager read the StrataManagement information page.
Again, the Strata Schemes Management Regulation 2010 has a section called: PART 4 - RESTRICTIONS ON EXERCISE OF FUNCTIONS BY OWNERS CORPORATIONS AND EXECUTIVE COMMITTEES. Phew, what a mouthful that was...but it contains some more things you need to be mindful of regarding delegation of duties and legal advice conditions. They are:
It all might seem pretty scary but it's not really - just some common sense type stuff you have to be aware of. Oh yeah, the Large Schemes referenced in Section 14 are Strata Schemes with 100 lots or more....
Joining the Executive Committee (EC) can be a potentially life-changing decision so make sure you are fully prepared for what's involved. It's not a decision to be made lightly especially if your scheme has chosen to go down the self-management path. A whole lot more in the way of time, effort and responsibility is required of the committee members in a self-managed scheme.
For some schemes, being an EC member means facing the nightmare scenario of hostile meetings with much screaming, constant verbal abuse, threats of assault or police proceedings, difficult motions like "one of the EC members is a fool and should be thrown out" or that "the sinking fund levy should be abolished" and more.
At the very least the meetings may be quite lengthy, there may be many controversial decisions, there's probably little or no pay for the untold hours you've spent in the job not to mention the odd uncomfortable moment when you cross paths with someone who detests having to pay the sinking fund levies or with the owner who hates the colour the building was painted. In an instant you, as a committee member, can become the target for everything that owners don't like.
And this is if the scheme is running smoothly! Additionally, consider what the implications would be if you were to be held personally liable for not keeping the scheme's fire safety systems or security right up-to-date and an accident or a burglary occurred? At least when Strata Managers are involved most of the compliance and legislative requirements are handled by them, along with most of the disputes too.
From experience it would seem that managing people is far more difficult than managing the actual scheme's maintenance needs. Having to deal with the multitude of conflicting interests and personal agendas of the owners and other residents is a major reason why most schemes opt to use the services of professional Strata Managers. Generally they have the systems, people and experience to handle these complex issues.
TIP - Strata Managers can make the Executive Committee members' lives very much easier but, if DIY is something you're keen on then you might like to read the Do-it-yourself (Self Management) information page to get a better perspective on self-management.
because the committee effectively controls the scheme's long term future by giving a clear indication on where they want the scheme to be positioned in the marketplace. How is this done?
TIP - always remember that a property in a rundown, poorly run scheme will never attract as good a price as an obviously well maintained and beautifully presented property in a similar area.
The Strata Managers, as knowledgable as they are, are not permitted to make decisions on how a scheme is to be run or on how much money is to be spent looking after the scheme - only the Executive Committee for the Owners Corporation can. Therefore, it's imperative that those who really care about the scheme are handed such important positions.
Are you one of those people? If you are, then you CAN make a difference.
In a scheme where there are only 2 lots (known officially as a small scheme), the EC comprises the two owners. Therefore, any decision made by the EC is treated as a decision by the Owners Corporation provided the motion doesn't relate to a restricted matter which must be officially decided by the Owners Corporation at a general meeting.
Small schemes have a few other special conditions covering areas such as meeting quorums, insurances, the common seal, auditing of financial statements and sinking fund requirements so, if you need to find out more go to the Small & Large Schemes information page.
Here are a few extra resources to help you understand exactly what responsibilities the EC has along with some other relevant and important information that might prove useful.
Information pages, booklets, publications
- Strata Living booklet: Refer to the Executive Committee section (about page 11)
NSW Legislation references
- Schedule 3 – Constitution of Executive Committee of the OC and meetings of Executive Committee (Schedule 3)
- Others involved in Management - the EC (Sections 16 through 25)
- Owners Corporation to appoint Executive Committee (Section 16)
- What happens if Executive Committee is not appointed? (Section 17)
- Executive Committee's decisions to be decisions of Owners Corporation (Section 21)
- What are the functions of the secretary of an Owners Corporation? (Section 22)
- What are the functions of the treasurer of an Owners Corporation? (Sections 23)
- Who can exercise functions relating to the finances and accounts of the Owners Corporation? (Sections 24)
Strata Title Terms and Jargon
- Strata Terms and Jargon (to find out what everything means)
Buying a Strata Title Property
Community & Neighbourhoods
Home Warranty Insurance
Levies & Special Levies
Records & Accounts
Small & Large Schemes
Strata Finance Loans
Strata Trades Guide
Taxation & GST
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