Functions and Powers

By Bailey Compton 3 Nov 2023

NSW community living legislation

In NSW, there are two pieces of legislations that governs community ownership and living:

  • Strata Scheme Management Act 2015 (SSMA);

and

  • Community Land Management Act 2021 (CLMA).

Both pieces of legislation establish an association of owners. The legislation was drafted along the line of the Corporation law, however, has some significant differences. The most significant is the functions and powers given to the Board of directors and association.

The SSMA and CLMA indicate that the management of the Scheme is the responsibility of the Owner’s Corporation or the Community Association. It was recognised by the legislature that of the Owner’s Corporation or the Community Association cannot meet for every decision,therefore, provided three mechanisms of support for the owners.

In relation to a Strata Scheme, SSMA states that Owner’s Corporation can obtain support from appointing:

  • A strata manager;
  • A strata committee;
  • A building manager.

Similarly, the CLMA states that the association may obtain support from appointing:

  • A strata community title manager;
  • An association committee;
  • A facility manager.

Although using different names, the concepts are the same. Aims speaks for themselves in terms of similarities in responsibility.

The legislation states that the owners corporation or community association can only take the function set out in the respective legislation. Anything that the corporation or the association does must be endorsed by the legislation, or it is, what lawyers call, ultra vires. In other words, it is void. The corporation and association is given power to undertake all those functions. The strata committee or association committee has the power to do anything in relation to the corporation association, unless the legislation required a general meeting to exercise those powers. Additionally, each and every general meeting can place limitation on the committee’s power. Hence, the strata committee is limited to only undertaking certain matters and those matters can be always restricted by the members.

There is the ability to appoint a building manager in strata and a facility manager in community title. It worth noting that, these individuals are limited to undertaking tasks related to the maintenance in repairing of the common property. Moreover, they do not have delegated function and therefore the ability to make decisions without approval from the strata management or the strata committee.

Finally, the growth industry in property is strata management industry.

Due to the size and complexity of a strata scheme, owner’s corporation and community association are appointing strata managers. These people obtain delegated power to carry out certain function on behalf of the owner’s corporation.  They do not have the power to make decision on finance and only have the power delegated to them by the owner’s corporation or association.

Also, the role of the chairperson, secretary and treasurer is normally delegated to the strata manager. It is important to note that, an owner’s corporation, at anytime, can limit such powers.

Owner’s Corporation and community association should be clear regarding the functions and powers provided by the relevant legislations. Further consider what power they want to give to their:

  • committee;
  • strata or community manager.