What Is a Management Committee, and Why Should Your Group Have One?

The short answer

A management committee is a small group of owners that the corporation appoints to transact its business between general meetings. Without one, every decision the corporation makes has to wait for a general meeting, which needs fourteen days' notice, an agenda, and half the units in the room.

A committee is optional under the Strata Titles Act 1988. In practice, a group of any size that wants to get things done has one.

What the Act actually says

Under Section 35(1), a strata corporation may, by ordinary resolution, appoint a management committee of unit holders. That is a simple majority at a general meeting — no special resolution, no 75% threshold, no drama.

The Act sets very few constraints:

• In a residential group, committee members must be unit holders. A tenant, a spouse who is not on the title, an adult child or the body corporate manager cannot be a committee member. Where every unit in the scheme is non-residential, the corporation can appoint non-owners (Section 35(1a)).
• The Act does not fix a committee size. That is for the corporation to decide.
• Committee members hold office on terms fixed by the corporation and can be removed by ordinary resolution at any time (Section 35(5)).
• The committee may co-opt a suitable person to fill a casual vacancy (Section 35(6)).
• The committee must keep minutes of its proceedings and cause proper accounting records to be kept of money received and expended (Section 35(8)).

Beyond that, the committee regulates its own meetings as it sees fit, subject to the Articles and any direction from the corporation (Section 35(9)).

What a committee can decide

Section 35(2) is broad: a management committee has full power to transact any business of the corporation, subject to any limitation the corporation imposes.

Read that again. The default is not "the committee can handle small things." The default is that the committee can do anything the corporation could do by ordinary resolution, until the corporation says otherwise. That includes engaging and dismissing a body corporate manager, accepting quotes, authorising maintenance, arranging insurance, and enforcing the Articles.

Which is exactly why the corporation should say otherwise.

What a committee cannot decide

Section 35(3) draws the hard line: a management committee has no power to do anything for which the Act or the Articles require a special or unanimous resolution.

So the committee cannot:

• Approve building or structural work, or a change to the external appearance of a unit — that is Section 29, and it needs a special resolution of the corporation
• Amend the Articles
• Change the basis on which levies are apportioned
• Do anything else the Articles have reserved to a general meeting

A committee that approves a pergola has not approved a pergola. It has created a problem for the owner who then builds one.

The limitation you should impose: a spending cap

The single most useful thing a corporation can do at its AGM is resolve a spending limit for the committee. It converts a vague delegation into a workable one.

The logic is simple. Set the cap high enough that the committee can act on the things that cannot wait — a burst pipe, a failed pump, a tree across the driveway, a routine gutter clean — and low enough that anything approaching real money comes back to the owners.

A motion in this shape does the job:

That the management committee is authorised to incur expenditure on behalf of the corporation up to $2,000 for any single item and $10,000 in aggregate in any financial year, other than expenditure required to make the common property safe in an emergency, which is not subject to these limits. Expenditure beyond these limits requires a general meeting.

Set the numbers to your group's size and budget. Review the cap at each AGM. If the committee has bumped against it three times in a year, it is too low; if it has never come close, it is doing no work.

Why have a committee at all

Because a general meeting is a slow instrument

Fourteen days' notice. An agenda that has to be settled beforehand. A quorum of half the units. A time and place reasonably convenient to a majority of owners. That is the right machinery for setting levies and changing the Articles. It is a poor machine for deciding whether to accept the $1,400 quote or the $1,650 one.

A committee meeting needs three days' notice and a quorum of roughly half its members. Business gets done in a week rather than a season.

Because someone has to be the manager's counterparty

A body corporate manager is a service provider engaged by the corporation. Somebody has to instruct them, question them, approve their recommendations and hold them to account. Where there is no committee, that role has no home — and the manager ends up making, or effectively making, decisions that belong to the owners. That is how groups drift into arrangements nobody remembers agreeing to.

A committee gives the manager somebody to report to and the owners somebody to hold responsible. It is the mechanism by which the corporation stays the principal rather than the passenger. If you are assessing whether your current manager is earning their fee, see What Does a Strata Manager Actually Do?.

Because it spreads the load

Without a committee, the work does not disappear — it lands on whichever owner is most conscientious, usually the secretary, usually unpaid, usually until they sell up and the corporate memory leaves with them. Three or five people sharing the job is more durable than one person carrying it.

Because it produces a record

The committee's minutes and accounting records are part of what a prospective purchaser receives under Section 41. A group that can produce two years of orderly committee minutes looks like a well-run group, and it sells like one. A group that cannot produce them invites the buyer's conveyancer to start asking questions.

Because the decisions are better

A committee that meets regularly reads the financials, watches the maintenance backlog, and notices the problem while it is still small. Deferred maintenance is the most expensive thing a strata group buys, and it is bought by inattention.

What it costs the people on it

Being honest about this matters, because a committee recruited on a false prospectus does not last.

Committee members carry real legal duties. A strata corporation is a body corporate, so its committee members are subject to the Corporations Act 2001 as well as the Strata Titles Act: a duty to act in good faith and in the best interests of the corporation, and a duty to act with care and diligence. They are expected to be financially literate enough to read the corporation's accounts and question them.

And under Section 47, if the corporation commits an offence against the Act, every person who was a member of the management committee at the time is personally guilty of that offence and liable to a penalty of up to half the maximum prescribed for the principal offence. There is a defence — that the member exercised reasonable care and the offence was not attributable to any intentional or negligent act or omission on their part — but the member bears the burden of proving it.

This is not a reason to avoid a committee. It is a reason to run it properly: attend, read the papers, declare interests, get advice on the hard questions, and have your objections minuted. Every one of those things is also your legal defence.

It is also a reason to check that your corporation holds office bearers' liability insurance. Many groups do not, and the committee members find out at the worst possible moment. See our guide to insurance.

For the full statutory picture of committee duties, read Strata Management Committees: Roles, Powers, and Duties before you nominate.

Committee members and officers are not the same thing

A common tangle. The corporation has officers — a presiding officer, a secretary and a treasurer. It may also have a management committee. These overlap in practice, and in most groups the officers sit on the committee, but they are separate appointments with separate functions. The officers hold specific roles; the committee holds delegated decision-making power. One person can hold more than one office.

How big should it be?

Big enough to have a quorum on a wet Tuesday; small enough to actually meet.

The quorum formula under Section 35(4a) is: divide the total number of committee members by two, drop any fraction, add one. So a three-member committee needs two present; a four- or five-member committee needs three; a seven-member committee needs four.

Note that a five-member committee has the same quorum as a four-member one. If you are choosing between four and five, choose five — you buy an extra pair of hands and an extra apology for absence at no cost to the quorum.

Odd numbers avoid tied votes. Three works for a small group. Five is the sweet spot for most. Beyond seven, meetings stop being meetings.

When a committee is unnecessary

In a group of three or four units, the corporation and the committee are the same people in the same room. Appointing a formal committee adds a layer of procedure without adding a layer of capability. Small groups are usually better served by holding general meetings whenever they need one — the notice period is the only real cost, and with a handful of owners a quorum is rarely in doubt.

The point at which a committee starts to earn its keep is roughly the point at which getting half the owners into a room becomes a scheduling exercise rather than a phone call.

How to appoint one at your next meeting

Appointing a committee is ordinary business, so it needs no special notice — but put it on the agenda anyway, so owners can think about whether they want to stand.

1. Include it in the notice. An agenda item along the lines of "Appointment of the management committee and determination of its spending authority".
2. Move an ordinary resolution appointing the named unit holders as the management committee, and fixing their term (typically until the next AGM).
3. Move a second ordinary resolution setting the committee's spending limits and any other restrictions the corporation wants to impose.
4. Minute both with the exact wording, the names, and the numbers. The committee's authority is only as clear as the minute that created it.
5. Hold the first committee meeting soon afterwards, elect nobody and decide nothing dramatic, but agree how often you will meet, who calls the meetings, and who takes the minutes.

If nobody nominates, that is information. It usually means the group has not been told what the job involves, or has been told the manager handles everything. Both are fixable.

Community corporations

Community corporations under the Community Titles Act 1996 have a parallel framework, with one important difference: the committee's spending authority is capped by regulation, and the committee cannot fix or change the levies — that decision always sits with the corporation in general meeting. See Community Title Management Committees.

Get in touch

If your group is thinking about establishing a management committee, or has one that has stopped functioning, we can help you set it up properly — the appointment resolution, the spending limits, the meeting rhythm and the record keeping. Acacia Collective manages strata and community title groups across South Australia.

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

This article is a practical reference, not legal advice. For a specific question about your corporation, consult a solicitor.