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"The Owners Corporation (formerly known as the Body Corporate in NSW) is the governing entity that looks after the strata scheme in entirety.  This entity has an extremely important and very responsible position in the running of a strata scheme.  However, in the real world, it doesn't make any sense to have all owners involved in every aspect of the scheme.  What a nightmare that would be...so here are some guidelines on the functions and responsibilities of the Owners Corporation and a rundown on how it all actually works."

THE OWNERS CORPORATION in a STRATA SCHEME

• Duties of the Owners Corporation
• The Executive Committee for the Owners Corporation
• Meetings
• Owners Corporation Responsibilities
• When does the Owners Corporation commence?
• What happens after registration of the strata scheme?
• Initial Period
• Original Owner's Responsibilities
• What happens after the first AGM?
• Should the OC self-manage or use a strata managing agent?
• Extra information resources

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Duties of the Owners Corporation

The Owners Corporation (OC) is an entity comprising all the owners of the lots in a strata scheme.  According to the NSW Strata Schemes Management Act 1996, it's the duty of the OC to administer, control, maintain and manage all areas of the common property for the scheme.  However, trying to co-ordinate and control the opinions, advice, thoughts and ideas of all the owners in a scheme (especially when there are more than 5 lots) is an almost impossible task.  The answer to this dilemma is the Executive Committee.

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The Executive Committee for the Owners Corporation

Obviously, and especially with any strata schemes over 5 lots, it's usually not practical or workable to have EVERY owner directly involved in EVERY issue that arises.  While the really 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 get an electrician out to fix the problem with the intercomm by tomorrow" shouldn't require everybody's involvement.

So, to avoid overly complicating such things, the OC (at the annual general meeting) elects an Executive Committee to oversee these day-to-day issues.  These 'elected' owners' generally liaise closely with the appointed strata managing agent (usually via a committee spokesperson) and together they work as a team to ensure the smooth running of the scheme.  If there's no strata managing agent appointed then the Executive Committee must handle everything.

You can learn more about the Executive Committee, its functions and responsibilities on the Executive Committee information page.

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Meetings

Regular meetings are held between the Executive Committee and the other owners allowing ideas, suggestions, thoughts and complaints regarding the scheme and its operation to be expressed and put forward in an open forum.  Decisions are then made regarding what actions (if any) are required for each of the items discussed at these meetings.

You can read a lot more on the different types of strata meetings on the Meetings information page

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Owners Corporation Responsibilities

The OC looks after just about everything to do with the running and maintaining of a strata scheme.  If a strata managing agent is appointed to manage the scheme then the OC can delegate many of its functions to that strata manager.

Go to our Strata Managing Agents information page to read more about what a Strata Manager does and the delegation of functions.

Here's a list of some of the areas under the control of the OC:

• strata roll
• financial records, accounts and statements
• keeping of all other records and correspondence
• fire safety compliance
• OH&S compliance
• other legislative interpretation and compliance
• repairs, renewal and maintenance of common property
• payment of suppliers
• disputes between owners (i.e.scheme 'harmony' issues)
• committee elections
• meetings
• insurances
• section 108 strata search
• section 109 certificate
• delegation of responsibilities and functions
• levies and budgets
• by-laws

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When does the Owners Corporation commence?

The OC comes into existence when the strata scheme is registered at the NSW Dept of Lands.  In most cases the developer or builder will be the original owner.

What happens after registration of the strata scheme?

After registration of the strata scheme and during the Initial Period, the original owner has certain obligations and responsibilities that must be adhered to including a number of specific restrictions.  You can read about these (and more) on the NSW Office of Fair Trading's Starting the Owners Corporation fact sheet.

Initial Period

To save going into too much detail regarding Strata Scheme Initial Periods on this page, you can find out some basic details in the section called Miscellaneous Section - Initial Period on the NSW Dept of Lands Registrar General's Directions website and, for the real nitty-gritty, go to the NSW Strata Schemes Management Act 1996 specifically

• Section 50 : Restrictions on by-laws during initial period
• Section 113 : Restrictions on powers of owners corporation during initial period
• Section 182 : Order to authorise certain acts during initial period

Original Owner's Responsibilities

During the initial period the original owner is responsible for all the duties of the OC, even if the First Annual General Meeting has not been held.  The original owner is also responsible for the convening and holding of the FAGM within 2 months of the expiration of the initial period, irrespective of whether or not they still own any lots in the scheme.

If the original owner fails to hold the First Annual General Meeting, the Strata Schemes Adjudicator can appoint a person to hold that meeting and may issue a penalty to the original owner for not complying with the requirements of the legislation.

What happens after the first AGM?

Ongoing management continues under the requirements of the NSW Strata Schemes Management Act 1996 and the NSW Strata Schemes Management Regulation 2005.

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Should the OC self-manage or use a strata managing agent?

As the task of maintaining a strata scheme can be quite involved and complex, the Owners Corporation (OC) usually engages the services of a professional strata managing agent, specially trained in the handling the necessary tasks including keeping up with the ever-increasing number of legislative changes and compliance requirements.

The use of a Strata Managing Agent means the OC, and especially the Executive Committee, can go about the business of overseeing the day-to-day running of the scheme without having to be faced with the never-ending headaches of all the accounting and record keeping issues plus the compliance and legislative requirements - to name just a few.

The days of just having to "send out a few levy notices and balance the books" are well and truly gone with all the heavy regulatory and legislative requirements in force today.  This is particularly so for the medium-to-large sized schemes which have a whole multitude of other more complex issues and situations to deal with.

Therefore it makes a lot of sense to use a strata managing agent versus 'doing-it-yourself'.  If you happen to 'get it wrong' the implications (and possible penalties) can be very severe and far-reaching.  However, if you ARE determined to go down the 'do-it-yourself' path then make sure you read the Do-it-yourself Strata information page.

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Extra information resources

Here are a few extra resources to help you understand exactly what responsibilities the OC has along with some other relevant and important information that might prove useful.

Information pages, booklets, publications

• Responsibilities of the Owners Corporation
• The Owners Corporation in a strata scheme
• Starting the Owners Corporation
• Meetings of the Owners Corporation
• Strata Living booklet: Refer to Owners Corporation sections
• Owners Corporation Network of Australia

NSW Legislation references

• Management of Strata Schemes (Sections 8 through 15)
• Who manages a strata scheme (Section 8)
• Who else may be involved in managing a strata scheme (Section 9)
• Owners Corporation may employ persons to assist.... (Section 13)
• Owners Corporation to appoint Executive Committee (Section 16)
• Restrictions on functions by OC and EC (Sections 13 thru 15)

Strata Title Terms and Jargon

• Strata Terms and Jargon (to find out what everything means)

What is strata?
Strata terms and jargon
Frequently Asked Questions
Do-It-Yourself Strata
Strataman News
Helpful Websites

Buying a strata titled property
Buying "off-the-plan"
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Insurance requirements
Legal advice
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Ongoing maintenance&repairs
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Strata Managing Agents
Strata trades guide
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