As more Canberrans make the move into apartments, either as owners, investors or renters, there’s still an awful lot of misinformation floating around about rights, responsibilities and management within a strata.
One of the most misunderstood aspects is what a strata committee is and whether or not you should join.
Vantage Strata managing director Chris Miller explains that a strata committee is simply an elected group from among the owners of the units in an apartment building.
“If you think of all the owners as being similar to shareholders, then the executive committee is a bit like the board of directors,” he says.
For an apartment or unit owner, the benefit of joining the strata committee means they have more of a say in what happens with their building in the future, which potentially means increasing the property’s value as well.
“They’re close to the issues and able to participate and influence the direction of the owners’ corporation,” says Chris. “As part of the committee, you get to set the agenda more so than if you simply attend general meetings.”
Only owners are invited to join as they’re the ones with a stake in what happens with the building.
Decisions can be made about how to spend money and how to raise money. They might consider matters in relation to building repairs and maintenance, and administrative needs of the corporation, such as pursuing recalcitrant owners for levies that are owed.
“It also acts in between opportunities for all of the owners to get together,” says Chris. “Obviously if you’ve got 200 units in a building, everybody can’t regularly come together to meet.”
Chris is keen to point out that the committee is not autonomous in any way. Instead, it’s deferential to the owners, meaning they can’t make decisions nobody else agrees with.
“So the committee can implement the decisions that have been made by the owners at general meetings,” he says. “If the owners had made a decision about security cameras, it’s up to the committee to then advance that decision to the point where it can be submitted back to the owners at a general meeting.”
However, Chris explains the committee does need authority to act if something arises that needs quick action.
“Such as if there was a big sewage leak, the committee needs to be able to make a decision about doing some expensive plumbing work, and quickly,” he says.
An important thing Chris wants people to be aware of is that decisions made by members of a strata committee could possibly leave them exposed to liability.
Allinsure founder and managing director Peter Chamberlain says this is because by joining a strata committee you become bound by the obligations and responsibilities that are set out in both the Strata Act and Corporations Act.
However, he says it isn’t all bad as insurance cover is readily available within the residential or commercial strata insurance through what’s known as office bearers liability insurance.
“It’s this which committee members should pay particular attention to because if they, or the committee, makes a decision that results in consequential loss, and one of the owners, or a third party, takes legal action, it’s this cover that comes into play,” says Peter.
When it comes to what owners can take legal action over, Peter explains it’s fairly broad ranging, providing the potential claimant believes they can prove a financial loss due to what they believe is a negligent decision, or action or inaction by the executive committee.
“It could be anything to do with decisions made regarding money to be spent or not spent on maintenance and upkeep of the building, or to do with who they choose to engage for works that are required, or even simply the failure to engage a contractor to complete required works,” says Peter.
However, much like Chris, Peter believes that joining a strata committee is a great way for owners to have a voice in how their asset or building is maintained. They just need to pay attention to their insurance cover and focus on getting the right advice.