Self-Managing a Body Corporate in New South Wales

Can you self-manage in New South Wales?

Self-management is allowed for any scheme, but it is most common in two- and three-lot schemes where coordination is easy. For schemes with five or more lots, owners may decide to appoint a managing agent by ordinary resolution at a general meeting — but they are not required to. Two-lot schemes can also pass a unanimous resolution to opt out of some by-law and capital works fund requirements that otherwise apply.

Required office bearers

Every strata scheme must have an elected strata committee with a chairperson, secretary and treasurer. In a two-lot scheme each owner can hold a role; in a six-lot scheme one person can hold all three positions if needed. Office bearers must be elected at each Annual General Meeting (AGM) and any change must be recorded in the strata roll.

Meetings and notices

An AGM must be held within 18 months of the first AGM, and then within each 12-month period after. Notice of an AGM must be given to each owner at least 7 days before the meeting and must include the agenda, motions, financial statements, insurance details and proposed budget. Minutes must be distributed within 14 days. Extraordinary general meetings may be called by the secretary or by owners holding at least one quarter of unit entitlements.

Levies, budgets and funds

Owners must contribute to an administrative fund (day-to-day running costs) and, unless the scheme is a two-lot scheme that has resolved otherwise, a capital works fund (formerly the sinking fund) for long-term maintenance. A 10-year capital works plan must be prepared and reviewed at least every five years. Levies are set at each AGM and are typically payable quarterly.

Insurance obligations

Strata insurance is compulsory. The owners corporation must hold a building insurance policy covering full replacement value, plus public liability cover of at least $20 million. A valuation must be obtained at least every five years. Two-lot schemes that are physically detached can resolve to insure separately by unanimous resolution.

Records to keep

The strata scheme must keep a strata roll, minutes of meetings, financial records, the 10-year capital works plan, insurance certificates and copies of all correspondence. Records must be retained for at least seven years and made available for inspection by any owner or mortgagee on payment of the prescribed fee.

Common pitfalls

• Failing to hold an AGM within the statutory 12 (or 18) month window — a frequent NCAT complaint.
• Not maintaining the capital works fund or its 10-year plan, leaving the scheme unable to fund major repairs.
• Insuring only the building when public liability or office-bearers liability cover is also required.
• Sending meeting notices by post-only when an owner has nominated an email address — service is not valid.
• Treating the chairperson’s vote as final on a financial matter — most motions are ordinary resolutions requiring a majority of unit entitlements voting.

Frequently asked questions