Owning a property within a strata scheme involves more than maintaining an individual apartment, townhouse or commercial unit. Strata ownership also includes shared responsibilities for common property, building maintenance, financial contributions and decisions that affect the wider community. In New South Wales, these responsibilities are managed through an owners corporation, which plays a central role in ensuring that the strata scheme operates effectively. Understanding how an owners corporation functions can help property owners participate in important decisions and recognise their rights and obligations.
The responsibilities of an owners corporation are established through NSW strata legislation, particularly the Strata Schemes Management Act 2015. This legislation provides a framework for managing common property, collecting levies, holding meetings, maintaining records and resolving certain disputes. Property owners who want to better understand these requirements can refer to a guide to the NSW Strata Schemes Management Act for an overview of the legislation and its practical implications. By understanding the role of the owners corporation, strata residents and committee members can contribute to more effective property management and a better-maintained living environment.
What Is an Owners Corporation?
An owners corporation is the legal body responsible for managing a strata scheme’s common property and carrying out duties established under NSW strata legislation. It is formed when a strata plan is registered and generally consists of all owners of lots within the scheme. Each lot owner automatically becomes a member of the owners corporation, which continues to exist as individual properties are bought and sold.
The owners corporation makes decisions about shared property, finances, maintenance and other matters affecting the scheme. Some decisions are made at general meetings, while certain responsibilities may be delegated to a strata committee or strata managing agent. However, delegation does not remove the owners corporation’s overall legal responsibilities. Understanding this structure is important because individual owners, committee members and professional managers have different roles. Effective strata management depends on these parties working within their authority and communicating clearly about the needs of the property.
Maintaining and Repairing Common Property
One of the most important responsibilities of an owners corporation is maintaining and repairing common property. Under section 106 of the Strata Schemes Management Act 2015, an owners corporation generally has a duty to properly maintain and keep common property in a state of good and serviceable repair. Common property may include shared hallways, stairwells, roofs, external building elements, gardens and certain services, depending on the registered strata plan and applicable legal arrangements.
Determining whether a particular component is common property or part of an individual lot can sometimes be complicated. Responsibility may depend on the strata plan, relevant legislation, by-laws and the nature of the installation. The owners corporation should investigate reported defects and arrange appropriate maintenance or repairs where required. Delaying necessary work can contribute to further deterioration, increased repair costs and disputes between owners. Although the legislation provides limited exceptions and mechanisms affecting maintenance obligations, these should not be treated as a general permission to ignore building defects. Proper maintenance planning helps protect the property and supports the safety and comfort of residents.
Managing Strata Levies and Financial Contributions
Owners corporations need sufficient funds to cover the costs of operating and maintaining their strata schemes. These funds are generally collected through strata levies paid by lot owners. In NSW, owners corporations are required to establish an administrative fund and a capital works fund. The administrative fund covers ongoing expenses such as insurance, cleaning, routine maintenance and management costs, while the capital works fund supports qualifying longer-term expenditure, including major repairs and replacement of building components.
Levies are determined through the scheme’s budgeting and decision-making processes, with contributions generally allocated according to unit entitlements unless an applicable legal provision provides otherwise. Owners corporations must consider both immediate expenses and future financial requirements when setting contributions. Insufficient funding can create difficulties when unexpected repairs arise or major building work becomes necessary. Accurate budgets, financial reporting and appropriate planning help owners understand how their contributions are used. Financial transparency also supports informed decision-making and reduces misunderstandings about the cost of maintaining shared property.
Preparing Capital Works Fund Plans
Long-term maintenance planning is another significant responsibility of an owners corporation. NSW strata legislation requires owners corporations to prepare a 10-year capital works fund plan and review it at least every five years. This plan helps identify anticipated expenditure on major repairs, replacements and improvements to common property over an extended period.
A capital works fund plan may consider items such as roofing, external painting, lifts, shared plumbing infrastructure and other building components that require substantial expenditure over time. The plan should be informed by the property’s condition, expected maintenance requirements and available financial information. However, preparing a plan does not automatically mean that sufficient funds have been collected to complete every anticipated project. Owners corporations must also make appropriate budgeting and levy decisions. Regularly reviewing the plan helps account for changing building conditions, updated cost estimates and unexpected maintenance needs. This approach can reduce the likelihood of major expenses catching owners unprepared.
Holding Meetings and Making Decisions
Owners corporations make many important decisions through general meetings, including annual general meetings and extraordinary general meetings. These meetings provide opportunities for owners to consider budgets, elect strata committee members, review relevant reports and vote on matters affecting the scheme. NSW strata legislation establishes requirements for meeting notices, voting procedures, motions and recordkeeping.
Different decisions may require different types of resolutions. Ordinary resolutions are commonly used for routine matters, while certain decisions require special resolutions or other specific approval processes. Owners should receive the information necessary to understand proposed motions and participate meaningfully in decision-making. The strata committee can manage various day-to-day matters within its authority, but some decisions must be referred to the owners corporation at a general meeting. Following proper meeting procedures helps ensure that decisions are made transparently and can reduce the likelihood of disputes about their validity.
Managing Strata By-Laws and Community Rules
Strata by-laws establish rules about the use and enjoyment of lots and common property. They may address matters such as noise, parking, renovations, pets and the use of shared facilities. The owners corporation is responsible for managing the scheme’s by-laws and ensuring that any proposed changes follow the required approval and registration processes. By-laws must also comply with applicable legislation and cannot impose restrictions that are unlawful or inconsistent with statutory protections.
When residents fail to follow valid by-laws, the owners corporation may take steps to address the issue. This can involve communicating with the relevant owner or occupier, issuing an appropriate notice to comply or pursuing formal dispute resolution procedures where necessary. However, enforcement should follow the legal requirements rather than relying on informal penalties or arbitrary decisions. Owners corporations should also periodically review their by-laws to ensure they remain appropriate for the scheme. Clear and reasonable rules can help prevent misunderstandings and support more harmonious relationships between residents.
Maintaining Records and Meeting Reporting Requirements
Accurate recordkeeping is essential for the transparent operation of an owners corporation. NSW strata schemes must maintain various records, including the strata roll, financial statements, meeting minutes, correspondence and relevant contracts. Many records must be retained for at least seven years, and records created from 11 June 2024 that schemes are required to keep must be maintained electronically. These requirements help owners access information about decisions, expenditure and the management of their property.
Owners corporations also have annual reporting obligations through the NSW Strata Hub, subject to applicable exemptions. Since 1 October 2026, two-lot strata schemes have been exempt from annual Strata Hub reporting. Other recent reforms have introduced annual training requirements for strata committee members, with training to be completed within three months of appointment. Staying informed about legislative changes is therefore an ongoing responsibility. Maintaining organised records and reviewing reporting obligations regularly can help schemes meet their requirements and avoid administrative problems.
Understanding the Role of Strata Committees and Managers
The strata committee is elected by the owners corporation to assist with managing the scheme’s affairs. Committee members may oversee maintenance matters, review financial information, communicate with residents and make decisions within their delegated authority. They must act in accordance with their legal duties and consider the interests of the owners corporation when exercising their functions. Certain matters remain reserved for decisions by the owners corporation at general meetings.
A professional strata managing agent may also be appointed to undertake specified management functions. These can include administering levies, organising meetings, maintaining records and coordinating contractors. However, appointing a strata manager does not transfer every responsibility away from the owners corporation. The scope of the manager’s authority depends on the management agreement and applicable legislation. Clear communication between owners, committee members and managers helps ensure that maintenance issues, financial matters and resident concerns are addressed efficiently.
Conclusion
An owners corporation plays a central role in the effective management of a strata scheme in New South Wales. Its responsibilities extend beyond routine administration to include common property maintenance, financial management, capital works planning, meetings, by-laws and regulatory compliance. Understanding these obligations helps property owners recognise how decisions are made and why active participation in strata matters is important.
As NSW strata legislation continues to evolve, owners corporations must remain informed about their legal responsibilities and maintain appropriate management practices. Regular maintenance planning, transparent financial reporting, accurate records and effective communication can help reduce disputes and support better outcomes for residents. By understanding the responsibilities of an owners corporation, property owners and strata committee members can contribute to a well-managed, financially prepared and properly maintained strata community.