Strata Management Committees: Roles, Powers, and Duties

What "Governance" Means for a Strata 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 strata 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 strata corporations in South Australia, with the section numbers and penalties set out in the Strata Titles Act 1988 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.

For owners wanting to understand their rights (as distinct from committee duties), see our companion article on your rights and roles as a strata unit owner.

Two Acts Apply, Not One

Most committee members assume that the Strata Titles Act 1988 (SA) is the only legislation they need to think about. It's not. Because a strata 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

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.

Financial Literacy Is a Legal Expectation

This is often overlooked. The Corporations Act requires committee members to be financially literate — specifically, to be able to read and understand the corporation's financial reports and to participate meaningfully in financial decisions. A committee member who rubber-stamps the treasurer's report without actually understanding it is not discharging their duty of care.

Every committee member should have a copy of the Articles and be familiar with its contents — bringing a personal copy to meetings saves many wasted hours of debate.

Section 25 Functions

Section 25 of the Strata Titles Act sets out the basic functions of a strata corporation:

• Administer and maintain the common property for the benefit of unit holders and (where appropriate) other members of the strata community
• Administer all other property of the corporation
• Enforce the Articles of the corporation

Enforcement isn't a discretion — it's a formal function. See our guide to enforcing owner maintenance obligations for the practical framework.

Section 26 General Powers

To carry out those functions, Section 26 gives the corporation a broad set of general powers:

• Acquire, deal with, and dispose of real and personal property
• Borrow money and obtain other forms of financial accommodation
• Open and maintain accounts at Australian banks and credit unions
• Invest surplus funds (in trustee-authorised investments or other prescribed investments)
• Enter into any kind of contract or arrangement

These powers sit with the corporation as a whole, but in practice are exercised by the Management Committee on the corporation's behalf, subject to any limits imposed by the Act, the Articles, or specific directions from general meetings.

Section 28 Enforcement Powers

Section 28 gives the corporation the specific power to enforce maintenance and repair obligations — including, if necessary, entering a unit and undertaking work at the owner's expense when the owner fails to comply with a notice. This is one of the most important practical powers a committee has, and it's covered in depth in our guide to enforcing owner maintenance obligations.

Duty to Insure: Sections 30 and 31

Section 30 requires the strata corporation to keep all buildings and building improvements insured to their full replacement value — including demolition, architectural, engineering, and associated costs. Any insurance payout must be applied to reinstating or repairing the buildings.

Section 31 requires the corporation to also carry public liability insurance. The Act itself specifies a minimum of $5 million, but the current regulations (Regulation 14) set the minimum at $10 million — which is the figure every committee should be working to. The regulations also require fidelity insurance equal to the higher of $50,000 or the maximum total balance of the corporation's bank accounts at any point in the preceding three years (with an exemption for corporations that have no administrative or sinking funds at all).

For more detail on body corporate insurance generally, see our guide to insurance.

Holding General Meetings: Section 33

A strata corporation can hold a general meeting at any time. A meeting may be convened by:

• The secretary
• Any two members of the Management Committee
• Unit holders representing one-fifth or more of the total number of units
• (For the very first meeting) the original registered proprietor

Notice requirements:

• Written notice specifying the day, time, and place
• At least 14 days before the date of the meeting
• Reasonably convenient to a majority of members

At least one general meeting must be held every calendar year — the Annual General Meeting — and the gap between AGMs must not exceed 15 months.

Voting at General Meetings: Section 34

The default rule is one vote per unit. The details — proxies, absentee votes, the co-owner tie-breaker, the unfinancial member restriction, and the weighted voting option for commercial groups — are covered in detail in our companion article on your rights as a unit owner. A decision supported by the majority of votes cast at a duly convened meeting is a decision of the corporation, unless a special or unanimous resolution is required for the particular matter.

Appointing the Management Committee: Section 35

A strata corporation may, by resolution, appoint a Management Committee of unit holders. The key rules:

• Residential groups: committee members must be unit holders. Non-residential (commercial) groups can include non-owner members.
• The committee has full power to transact any business of the corporation, subject to any limits imposed by the corporation itself.
• The committee cannot do anything for which the Act or the Articles require a special or unanimous resolution — those decisions stay with general meetings.
• Quorum is determined by a specific formula: take the total number of committee members, divide by two, drop any fraction, and add one. (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 members at a meeting of which at least three days' notice has been given to all members is a decision of the committee.
• Committee members hold office on terms fixed by the corporation and may be removed by resolution of the corporation at any time.
• The committee may co-opt a suitable person to fill a casual vacancy.
• Members can appoint another unit holder as their proxy at a committee meeting they can't attend.

The committee must keep minutes of its proceedings and cause proper accounting records to be kept of money received and expended. Beyond that, the committee can regulate its own meetings and proceedings as it sees fit, subject to the Articles and any direction from the corporation.

Record Keeping: Section 40

Every strata corporation must keep:

• A minute book containing minutes of its meetings
• Proper accounting records of receipts and expenditure
• A statement of accounts prepared for each accounting period
• A record of any notice or order served on the corporation

These records, along with copies of correspondence and notices of meetings, must be retained for the period prescribed in the regulations. An "accounting period" is generally either the financial year ending 30 June, or any 9-to-18-month period fixed by the corporation (with successive periods running continuously).

Providing Information to Prospective Purchasers: Section 41

When a prospective purchaser of a unit requests information (with the prescribed fee), the corporation must furnish particulars of levies and arrears, assets and liabilities, incurred and planned expenditure, copies of meeting minutes for up to the past two years, the latest statement of accounts, the current Articles, and current insurance policies. The corporation must also make its accounting records and minute books available for inspection. The corporation cannot charge more than the prescribed fee for these services.

Handling these requests promptly is important — a statement provided under Section 41 is, as against the corporation, conclusive evidence of the matters it contains, in favour of the person who received it.

Conflict of Interest: Best Practice

Although the Strata Titles Act doesn't set out a specific conflict-of-interest procedure (unlike the Community Titles Act's Section 95), committee members are still bound by the general law requirement to act honestly and in the best interest of the corporation. 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 the interest, 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. For the general principles, see the equivalent section in our community title governance article.

⚠️ Vicarious Liability: Section 47

This is the section every committee member should understand before they nominate. Under Section 47 of the Strata Titles Act, if a strata corporation is guilty of an offence against the Act, every person who was a member of the Management Committee at the time of the offence is also personally guilty of the offence and liable to a penalty of up to half the maximum penalty prescribed for the principal offence.

There is a defence, but the committee member bears the burden of proving it. Specifically, the member must show:

• That they exercised reasonable care in the exercise of their responsibilities as a committee member, AND
• That the offence is not attributable to any intentional or negligent act or omission on their part.

What this means practically:

• Showing up matters. A committee member who routinely misses meetings or doesn't read the papers can't easily claim they exercised reasonable care.
• Raising concerns in writing matters. If you disagree with a decision that you think is non-compliant, have your objection recorded in the minutes. That's your evidence of reasonable care if the corporation is later prosecuted.
• Professional advice matters. Seeking and documenting legal or technical advice on questionable issues is the single strongest defence.

Section 47 is why the business judgment rule, the financial literacy requirement, and the record-keeping duties above aren't theoretical — they're the foundations of your personal legal defence.

The Common Seal: Sections 18 and 24

Every strata corporation must have a common seal (a rubber stamp bearing the corporation's full name). The seal serves as the corporation's signature on documents that must be executed under seal — typically land transfers and leases.

Section 24 provides that the corporation can contract either under the common seal or through an officer or agent authorised to enter the contract on its behalf. In practice, the seal is generally used only by resolution of the committee and in the presence of at least two officers acting as witnesses.

Service of Documents: Section 49

Every strata corporation must maintain one of the following for the receipt of correspondence:

• A letter box, with the corporation's name clearly shown, for postal delivery to the site, or
• Where there is no postal delivery to the site, a post office box

A document may be served on the corporation, its secretary or treasurer, or any committee member by placing it in the corporation's letter box or by post to the corporation's postal address. Keeping the letter box maintained and checked regularly is a small but practical part of the committee's duty.

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 Strata Titles Act doesn't spell out the secretary's role in detail, but 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 unit holders of AGMs and general meetings in accordance with Sections 33 and 34 of the Act
• Receive correspondence from members, including requests to inspect insurance policies (Section 32) 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 Community Title Governance

The framework above applies specifically to strata corporations under the Strata Titles Act 1988. Community corporations operate under the Community Titles Act 1996, which has a parallel but slightly different set of governance provisions. For the community title equivalent, see Community Title Management Committees.

Many of the broader principles — duty of care, conflict of interest, the role of the presiding officer, the value of a written conflict policy, the quorum formula (which is identical) — apply equally to both. The main differences are in the detailed section numbers, the explicit conflict-of-interest penalty framework (which exists in the community title framework but is less prescriptive under the Strata Titles Act), and the exact wording of the vicarious liability provisions.

Get in Touch

If your strata corporation needs help with committee governance, meeting procedure, record keeping, or any of the duties set out in this article, we're happy to help. Acacia Collective manages strata 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.