Community Title Management Committees: Roles, Powers, and Duties

What "Governance" Means for a Community Corporation

Justice Owen, in a passage often quoted in directors' education courses, defined corporate governance as "the framework of rules, relationships, systems and processes within and by which authority is exercised and controlled in corporations." That definition applies just as much to a community corporation Management Committee as it does to a listed company. The committee isn't merely a meeting roster — it's a board of governance, and its members carry real legal duties.

This article walks through those duties as they apply to community title corporations in South Australia, with the section numbers and penalties as set out in the Community Titles Act 1996 and the Corporations Act 2001. It's a practical reference, not legal advice — for any specific question about your group, you should consult a solicitor.

Two Acts Apply, Not One

Most committee members assume that the Community Titles Act 1996 (SA) is the only legislation they need to think about. It's not. Because a community corporation is a body corporate, its committee members are also subject to the Corporations Act 2001 (Cth) — the federal law that governs directors of all Australian companies. The most consequential duties flow from that Act.

The Two Primary Duties

Under the Corporations Act, every committee member has two non-negotiable duties:

• Act in good faith and in the best interest of the corporation. Decisions must be made for the benefit of the body corporate as a whole — not for the benefit of any individual owner, faction, or external party.
• Act with care and diligence. Members are expected to inform themselves before voting, attend meetings, read papers, and apply reasonable judgment.

The Business Judgment Rule

The duty of care is moderated by what's called the business judgment rule. A committee member making a business judgment will satisfy the duty of care if they:

• Make the judgment in good faith and for a proper purpose
• Have no material personal interest in the subject matter
• Inform themselves about the subject matter to the extent they reasonably believe to be appropriate
• Rationally believe that the judgment is in the best interests of the corporation

In plain terms: if you've done your homework, you've declared any conflict, and your decision is genuinely defensible, the law is generally on your side even if the decision turns out badly.

The Five Functional Duties of a Management Committee

The day-to-day work of a Management Committee falls into five categories:

• Legal — ensure the corporation operates in compliance with Commonwealth and State law and regulations.
• Strategic — define the direction and activities of the body corporate. A body corporate manager (BCM) may carry out the actions, but the legal responsibility for direction rests with the committee.
• Oversight — ensure proper management of the body corporate. Recruit a BCM if appropriate, monitor their effectiveness, and replace them if necessary.
• Financial — ensure the corporation has sufficient and secure funds to carry out its planned activities.
• Representation — make decisions with regard for the interests of unit holders, but always "in the best interest of the corporation" rather than any individual.

Establishing the Committee: Section 90

A community corporation may, but is not obliged to, establish a Management Committee. The relevant rules:

• The committee is established by ordinary resolution of the corporation.
• Committee members must be natural persons (not corporate entities).
• The committee must include the presiding officer, the treasurer, and the secretary of the corporation.
• For a residential-only scheme, all committee members must be members of the corporation. (A natural person appointed to vote on behalf of a corporate member is treated as a member for this purpose.)
• For schemes that include non-residential lots, the committee may include external members.
• If the community parcel is subject to a leaseback arrangement, the committee may consist of persons nominated by the lessee.

Term of Office and Vacancies: Section 91

Committee members are appointed for a term that expires at or before the next AGM. A committee member's office becomes vacant if they:

• Die
• Complete their term of office and are not reappointed
• Cease to be a member of the corporation (where applicable)
• Cease to hold the office of presiding officer / treasurer / secretary (and don't hold one of the other two)
• Resign by written notice to the secretary (for any other member)
• Become bankrupt or apply for relief as an insolvent debtor
• Are convicted of an indictable offence or sentenced to imprisonment
• Are removed from office by ordinary resolution of the corporation

Removal by resolution can only proceed on one or more of three grounds: misconduct, neglect of duty, or incapacity / failure to carry out the duties of the office satisfactorily.

Functions and Powers: Section 92

Subject to any limitations imposed by the corporation, the Management Committee carries out the functions and duties of the corporation within its powers. The committee has full power to transact any business of the corporation, except:

• Anything for which a special or unanimous resolution is required (those decisions stay with general meetings)
• The committee cannot delegate its functions or powers — though it can engage a body corporate manager or other professional to assist in performing its functions.

Convening Meetings: Section 93

A committee meeting can be convened by the presiding officer, the treasurer, the secretary, or by any two members of the committee. The notice requirements are:

• Written notice with the day, time, and place of the meeting
• At least three days before the meeting date
• Reasonably convenient to a majority of members
• The agenda must be set out in the notice

Meeting Procedure: Section 94

The presiding officer chairs the meeting. If the presiding officer isn't there, those present can appoint a member to chair that meeting only.

Quorum is determined by a specific formula: take the number of members on the committee, divide by two, drop any fraction, and add one. So a four-member committee has a quorum of three; a five-member committee has a quorum of three; a seven-member committee has a quorum of four.

A decision supported by the majority of the members present is a decision of the committee. Members who can't attend can appoint another person as proxy — and for residential-only schemes, the proxy must be another member of the committee or another member of the corporation.

Decisions Without a Meeting

The committee can make a decision without holding a meeting at all, provided the procedure in Section 94(6) is followed:

1. Written notice setting out the proposed decision is served on every member of the committee.
2. Within seven days of the notice being served on all members, a majority of the members give written notice to the secretary expressing their agreement.

This is useful for time-sensitive routine decisions where convening a meeting would create unnecessary delay. The decision still needs to be recorded in the minutes.

Whether decisions are made in a meeting or by written notice, the committee must keep accurate minutes of its proceedings.

Conflict of Interest: Section 95

This is the duty most often breached by accident. A committee member who has a direct or indirect pecuniary interest in a matter under consideration must:

• Disclose the nature of the interest to the committee, and
• Not take part in any deliberations or decisions on that matter.

The disclosure must be recorded in the minutes. The maximum penalty for breach is $15,000.

One narrow defence: the member can prove they were not aware of their interest at the time. Another exception: an interest arising solely from the fact that the member is also a member of the community corporation does not count as a pecuniary interest for this purpose.

Best Practice on Conflicts

Adopt and minute a written conflict of interest policy before a conflict arises. The cleanest approach is the "absent yourself" model: the conflicted member discloses, leaves the room while the matter is discussed and decided, and returns afterwards. A "Disclosure of Interest" should be a standing item at the start of every committee meeting.

Duties of Honesty: Section 96

Committee members must at all times act honestly in the performance of their duties, and must not make improper use of their official position to gain a personal advantage for themselves or another. The penalties under Section 96 are serious:

• Where intent to deceive or defraud is proved: $15,000 or four years' imprisonment
• In any other case: $4,000
• Improper use of position: $15,000 or four years' imprisonment

Immunity from Liability: Section 99

The good news for committee members acting in good faith: under Section 99, a committee member is not personally liable for any act or omission while acting (or purportedly acting) as a committee member, unless the act or omission was dishonest or negligent. Liability that would otherwise attach to the member instead attaches to the corporation. This is what makes it possible for ordinary owners to take on committee roles without risking their personal assets — provided they act honestly and with care.

The Common Seal: Section 73

Every community corporation must have a common seal (a rubber stamp bearing the corporation's name), which serves as the corporation's signature on documents that must be executed under seal — typically land transfers and leases. The seal may only be used:

• In a manner directed by the corporation in general meeting, or
• If no such direction has been given, in the presence of any two of the presiding officer, treasurer, or secretary, both of whom must sign as witnesses.

Where one person holds all three offices, that person's presence is sufficient.

The Office Bearer Roles

The Presiding Officer (Chair)

All committee members have equal legal responsibility, but the presiding officer has additional practical duties:

• Chairs committee meetings in a manner that builds consensus and commitment to decisions
• Takes responsibility for the overall good performance of the committee
• Acts as the corporation's interface with relevant outside groups
• Ensures timely, accurate dissemination of information to other committee members
• Advises and counsels other committee members
• Acts (with the secretary) as the link between the committee and the body corporate manager between meetings

The Secretary

The Community Titles Act doesn't spell out the secretary's role in detail. In practice, the secretary is expected to:

• Ensure accurate minutes of meetings are taken and circulated to members in time for review before the next meeting
• Maintain a current list of the names and addresses of all financial members
• Advise the chair on procedural matters
• Anticipate matters needing committee attention, plan agendas ahead, and gather material for consideration
• Liaise with the presiding officer, the BCM, and stakeholders in preparing material
• Prepare follow-up correspondence after each meeting
• Arrange and notify owners of AGMs and general meetings in accordance with the Act
• Receive correspondence from members, including requests for inspection of insurance policies and requests to call special general meetings

The Treasurer

The treasurer (working with the BCM if one is appointed) is responsible for:

• Overseeing the accounts and financial systems of the corporation
• Presenting regular reports to the committee on the financial position of the corporation
• Preparing accurate financial statements (income statement, balance sheet, and cash flow statements at appropriate times) so all committee members understand the financial situation
• Ensuring a financial plan and budget are in place to maintain the effective operation and liquidity of the corporation

How This Compares with Strata Title Governance

The framework above applies specifically to community corporations under the Community Titles Act 1996. Strata corporations operate under the Strata Titles Act 1988, which has a parallel but slightly different set of governance provisions. For the strata equivalent, see Your Rights & Management Roles. For the underlying terminology, the strata glossary may also be useful.

Many of the broader principles — duty of care, conflict of interest, the role of the presiding officer, the value of a written conflict policy — apply equally to both. The detailed section numbers, quorum maths, and penalty figures differ.

Get in Touch

If your community corporation needs help establishing a Management Committee, drafting a conflict of interest policy, or working through any of the duties set out in this article, we're happy to help. Acacia Collective manages community title groups across South Australia and works with committees to put proper governance frameworks in place.

Call us on 1300 792 255 or email hello@acaciacollective.com.au.