Summary:

If a sufficient number of owners do not nominate for a council position at the AGM, then all owners will form the Council of the Strata Company, and all decisions will be made at General Meetings.

Impact of having no Council
The Council of Owners (COO) is made up of between 3 & 7 lot owners. If there is no council for a complex, then any decision (including maintenance) which needs to be made, requires correspondence to be sent to ALL owners and more than 50% of owners need to approve any work prior to a Strata Manager taking any action.

Typical outcome of having no Council
Many owners, particularly in complexes where no owners want to nominate for a COO position, typically disregard any requests sent by the Strata Manager. This leaves the Strata Manager unable to carry out any non budgeted works, and the result will be a less well maintained complex.

Benefits of having a COO
Having an active Council of Owners who meet regularly and liaise with the Strata Managers to ensure ongoing maintenance is attended to, is a far more effective and efficient way to ensure your strata complex is well maintained and the value preserved.

Excerpt From Act

Schedule 1
4  (3)         Where there are not more than 3 proprietors the council shall consist of all proprietors and where there are more than 3 proprietors the council shall consist of not less than 3 nor more than 7 proprietors as is determined by the strata company.  

Example Case:

How a strata company operates with no Council
The gutters at a complex of 12 single story units have become blocked during Autumn storms.  

An owner contacted their Strata Manager and asked them to seek quotes for a gutter clean ahead of Winter. There is no budgeted line item for gutter cleaning and therefore any expenditure would require approval from the Council of Owners. 

As there is no Council, the quote has to be sent to ALL owners. If less than 50% of owners respond, then no further action can be taken by the Strata Manager. 

The Strata Manager can only engage works to be carried out that were budgeted for and agreed upon at the AGM. All subsequent decisions require a majority vote. This can make unscheduled repairs and maintenance difficult to approve.