How does a strata committee exercise its decision-making power?
Posted 08 November 2024
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Formal path
A strata committee can call a strata committee meeting to formally decide a matter. There are 5 steps that should be followed:
1. Ensure the decision is capable of being made by the strata committee (section 36(3) of SSMA).
2. Prepare a motion to be voted on. Carefully consider the motion (or motions) that are required to be considered by the strata committee to ensure all aspects of the decision required to be made or instructions required to be provided are covered.
3. Give notice of the meeting. The strata committee may hold a paper-based meeting (i.e. no physical meeting is held), this should be specified on the notice (clause 9(2) of Schedule 2 SSMA). Further, there is also a 3 clear day notice requirement for issuing the meeting agenda. Please see the formal requirement set out in FAQ 6. The notice must also include a detailed agenda of the meeting.
4. Request members to cast votes on motion. Please see formal requirement set out in FAQs 6 and 7.
5. Prepare minutes of meeting. Please see formal requirement in FAQ 9.
Informal path
The informal path is less preferred but may assist when the matter is very urgent. It should still be documented (typically by exchange of emails), and as a minimum requires a majority of the committee to vote in favour.
Where there is insufficient time for notice of a formal committee meeting to occur, the Court of Appeal has determined that it is acceptable for an informal decision of the majority of the strata committee to be effective (The Owners Strata Plan No 57164 v Yau [2017] NSWCA 341 (Yau)).
In Yau, the decision related to an informal meeting to settle proceedings where the parties were already partway through a final hearing and the whole proceeding would be completed by the time that a formal meeting could occur.
The decision in Yau has been applied in a more recent case of Trigas v The Owners – Strata Plan No. 10579 [2019] NSWDC 473 in relation to non-urgent matters concerning repairs to be undertaken where the committee informally decided the matter. In that case, the committee did not issue a notice or agenda and did not prepare minutes but, due to the fact that its powers had not been limited by resolution at a general meeting, it was held to be a decision of the owners corporation, even though not urgent.
For the abundance of caution, it is recommended that a record of these decisions be kept and that these decisions be ratified at the next formal strata committee meeting in order to cure the shortfall. They should do this as soon as possible to minimise the risk of ratification being held to be unavailable due to delay.
This is an extract from our Strata Committee Manual.
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