Strata Council Governance & Responsibilities
Five important compliance requirements every council member should know
Being a member of a Strata Council is an important responsibility. Council members play a key role in overseeing the operation, maintenance and financial management of their strata scheme. However, the role comes with legislative obligations that extend beyond simply attending meetings and making decisions.
Under the Strata Titles Act 1985 (WA), council members must understand their responsibilities, act in the interests of the strata company and ensure decisions are made within the authority given to them.
Here are four key compliance requirements every council member should understand.
1. Act honestly, in good faith and in the interests of the strata company
Council members must act honestly, with loyalty and in good faith when performing their functions.
This means decisions should be made in the interests of the strata company as a whole, rather than to benefit an individual owner, further a personal agenda or resolve a private disagreement.
Council members must also exercise reasonable care and diligence when making decisions. This includes taking the time to consider relevant information, reviewing recommendations and understanding the potential financial and practical consequences of decisions.
What this means in practice:
- Consider the interests of the entire scheme, not just your own lot.
- Make decisions based on relevant information and evidence.
- Do not allow personal disagreements or relationships to influence decisions.
- Consider contractor qualifications, insurance, scope of works and warranties, rather than automatically choosing the cheapest quote.
- Understand the potential financial, maintenance and safety consequences of decisions.
🚨Remember: Being a council member is not an opportunity to pursue personal interests or agendas. Decisions must be made responsibly and in the interests of the strata company.
2. Declare conflicts of interest – and do not vote on affected matters
Council members must disclose any direct or indirect financial or other interest that conflicts, or may conflict, with their responsibilities.
Importantly, a conflict does not have to involve a direct financial benefit. It may involve a family relationship, business connection or another personal interest that could affect a member's ability to make an objective decision.
Where an interest is required to be disclosed under section 137(3), the council member must:
- Disclose the interest in writing.
- Make the disclosure as soon as practicable after becoming aware of the relevant facts.
- Not vote on the affected matter.
An exception applies where the interest arises solely because the person owns a lot in the scheme.
Examples of potential conflicts include:
- Your spouse or family member submits a contractor quotation.
- You own a company that is being considered for strata works.
- You have a financial or business relationship with a supplier.
- You have a personal interest in a dispute being considered by the council.
🚨Remember: A conflict does not automatically mean wrongdoing has occurred. However, failing to disclose a relevant interest or voting when prohibited can create a compliance issue.
3. Make informed decisions and understand your financial responsibilities
Council members are responsible for overseeing the financial and operational management of the strata scheme.
This includes monitoring the financial position, considering expenditure, reviewing budgets and ensuring appropriate funding is available for maintenance and repairs.
Approving works without considering the financial implications or the council's authority can expose the strata company to unnecessary financial and legal risks. Before approving expenditure or works, consider:
- Is the proposed work the responsibility of the strata company?
- Is the work urgent or can it be planned?
- Have appropriate quotations and recommendations been obtained?
- Are the quotations comparable in scope?
- Is the proposed expenditure within the council's delegated authority?
- Is sufficient funding available?
- Does the matter require approval at a general meeting?
- Are there any insurance or ongoing maintenance implications?
Council members should also take an active interest in the scheme's administrative and reserve funds, outstanding levies, maintenance plan and anticipated expenditure.
🚨 Remember: The cheapest quotation is not necessarily the best option, and having funds available does not automatically mean the council has authority to approve the expenditure.
4. Understand the limits of your authority – council members cannot make decisions individually
The Council of Owners performs the functions of the strata company, subject to the Act, by-laws and any directions from owners.
Council members act collectively. Holding the position of Chairperson, Secretary or Treasurer does not give an individual member authority to independently approve expenditure, instruct contractors or direct the strata manager. What this means in practice:
- Do not independently instruct contractors or authorise works.
- Do not approve expenditure without the appropriate council or owner approval.
- Do not issue breach notices or make decisions on behalf of the council without proper authority.
- Do not change approved works or override valid council resolutions.
- Ensure decisions are made through the appropriate meeting and decision-making process.
It is also important to recognise that not every decision can be made by the council. Certain matters must be referred to a general meeting and may require an ordinary resolution, special resolution, resolution without dissent or unanimous resolution.
🚨Remember: Your position on the council does not give you individual decision-making powers. Council decisions must be made collectively and within the authority provided by the legislation and scheme by-laws.
Some other key considerations:
Does being a council member mean you are personally liable?
Council members should understand that their decisions can have significant financial, safety and maintenance consequences for the strata company.
Section 141 provides limited protection from civil liability for acts or omissions carried out in good faith while performing functions under the Act or by-laws, or in the reasonable belief that they were doing so.
However, this is not blanket immunity. It should not be interpreted as protection for dishonest, improper or bad-faith conduct.
Council members should therefore take their responsibilities seriously, seek clarification when unsure and ensure decisions are properly authorised and recorded.
The role of your strata manager
Your strata manager is there to support and guide the Council of Owners, explain legislative obligations, identify matters requiring owner approval and help ensure decisions are properly documented.
A strata manager should also respectfully challenge instructions that are unauthorised or inconsistent with the Act, by-laws or valid resolutions.
Ultimately, the council is responsible for making decisions within its authority, while the strata manager assists in ensuring the correct processes are followed.
The bottom line: Being a council member is more than having a say in how your building is managed. It carries legal and governance responsibilities. Understanding your duties, declaring conflicts, staying within your authority and making informed decisions helps protect both the strata company and its owners.