Your ownership in your strata company in some ways is similar to being a shareholder, who has certain rights and responsibilities relating to this ownership. Your management team or strata council is a group of fellow owners elected at each Annual General Meeting of the Strata Company.
What is a Strata Council?
The strata council is appointed to carry out functions, duties and powers of the Strata Company as defined by the Act and is responsible for such things as:
Enforcement of the by-laws
Managing and maintaining of the common property for the benefit of all owners
Ensuring the Strata Company is sufficiently funded
Effecting proper insurance cover
Maintaining usual business records
Convening the required general meetings
Appointing and supervising your Strata Company Manager
The Strata Council has other duties and discretionary powers, which, when properly carried out will in ensure compliance with the Act and the protection of your investment.
Having an active, involved and informed Council is by far the best way to ensure effective management of your Strata Company and/or Scheme. It is also a way to ensure compliance with the requirements of the Strata Titles Act.
Your Council may or may not appoint a strata manager to support and assist them in the performance of the functions of the Strata Company in accordance with the Act and decisions of your General meeting.
Under the terms of most management agreements the strata manager will act only with the authority and instruction of the Council to provide services such as:
Routine repair and maintenance of common property
Collection of levied contributions
Payment of properly incurred expenditure
Maintain all required records of the Strata Company
Provide general advice to the council about owner enquiries
Who can be a Strata Councilor?
The members of the Council must all be owners and therefore they have the same personal and financial interest in the property as all other owners. Each Councillor has one vote at a Council meeting and this ensures that a dominant personality doesn’t easily run the strata company to suit their personal goals.
As a Council Member it’s not necessary to reside on site, as investors also make great Councillors. It’s a good idea, however, to have at least one owner who resides on site and who all members can access by email, so that they can communicate in between meetings if necessary. It’s important to have a balance of viewpoints and from our experience it’s often helpful to have both non-resident and new owners as members of the Council.
You may be suitable if you have an interest in maintaining value and harmony and particularly if you have any financial, business or property management background.
How much work is involved in being a Strata Councillor?
Councillors volunteer their time and knowledge on behalf of their fellow owners and while this does involve a degree of commitment it also offers the opportunity for you to have a firsthand involvement in the management process. Most Councillors find their involvement to be interesting and rewarding.
If your Strata Company appoints a Strata Manager, s/he will manage most of the day-to-day matters. Your Strata Manager will regularly report to and seek instruction from the Council on financial, insurance, behaviour, maintenance and other significant matters as they arise.
If there is no Strata Manager appointed, then the Council is responsible for these matters, including enforcing by-laws, common property issues, major expenses, collecting unpaid levies, disputes with or between owners, insurance claims, budgeting, and holding general meetings.
What if we have no Strata Council?
If there’s no Strata Council, then even the most mundane decision incurs the cost and inconvenience of a general meeting. When there is a Strata Council but it chooses not to take an active supervisory role, there can easily be misunderstandings and dispute. In our experience the best managed Strata Companies have a fully involved and active Council overseeing a professional manager who is properly instructed to exercise his or her delegated authority.
Abode Strata Management is a WA-based boutique strata management company providing residential and commercial strata management. Abode specialises in efficient, tailored solutions and sensitive management of people, for small residential right up to large mixed-use developments. Follow Abode on Linked In.