This article discusses terminating a building management committee and integrating its services under the strata plan.
Question: Can a building management committee be terminated and its services brought under the strata plan?
Our building has a building management committee (BMC). The strata plan runs the residential, and a BMC runs all associated services in accordance with the management plan.
Our strata manager said the BMC can be terminated, and the associated services can be bought under the strata plan. Is this legally possible? If so, would the cost of making these changes be viable?
Answer: The titling structure was likely set up in this manner for a reason.
Whilst it is technically possible to terminate the BMC and the strata scheme and create a new strata scheme, it is usually not commercial to do so, and I have never seen it done. The titling structure was likely set up in this manner for a reason. In addition, the consent of all lot owners within the strata scheme, the stratum lot owners, mortgagees and Council would be required to terminate the BMC and strata scheme.
Within the strata scheme, the owners corporation manages the common property and the relationships between the lot owners by way of its by-laws. Each lot owner contributes their levies in accordance with the schedule of unit entitlement. All costs for common property can only be paid in accordance with the unit entitlements unless a common property rights by-law modifies this position.
In a stratum subdivision, the building management committee (BMC) manages the shared facilities and manages the relationship between the stratum lot owners (members of the BMC). The strata management statement will set out how shared facilities are managed and the allocation of costs for the shared facilities. The strata management statement will also set the proportions of which each BMC member will need to contribute for each of the shared facilities.
The structure of a BMC thus allows for greater flexibility in how costs are allocated to its members. Doing away with the BMC might create greater inequities, and whilst one member of the BMC may benefit, other members will likely be detrimentally affected.
I suggest that if a member of the BMC is not happy with the apportionment of costs for the shared facilities, they consult the strata management statement and follow the dispute resolution mechanisms if the members cannot agree to review the apportionment of shared costs.
Matthew Jenkins Bannermans Lawyers E: enquiries@bannermans.com.au P: 02 9929 0226
This post appears in the May 2025 edition of The NSW Strata Magazine.
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