Why the Constitution of Your Council of Owners Matters 💡

A common scenario in smaller schemes: only two owners nominate for the Council of Owners (COO). The minutes record it as “2 plus a vacancy” — so that’s fine, right? 😬 Not always.

Many schemes operate under the standard governance by-laws, which specify that schemes with more than three lots must have a quorate council to make decisions.

As outlined in the table below, a quorum depends on the number of council positions set by the strata company. So, if the number of council members was set at three and only two people nominate, this recent SAT decision clarifies that a two-member council is considered quorate.

However, there’s a catch: decisions can only be made where both members agree. If there’s any disagreement, the motion is automatically resolved in the negative.

You should always check your scheme’s by-laws, as some (particularly those within a management statement) specify that the Council of Owners must consist of between 5 and 7 members. This is often the case in larger schemes.

If fewer than two owners nominate, then no Council of Owners can be formed, and all owners must make decisions by a majority vote — that is, more than 50% of all owners. And let’s be honest — whether a strata manager can effectively manage an all-owner “council” of 20+ (mostly disengaged) owners is another story entirely. 🤦🏻‍♀️

A good strata manager will advise of any variations, and this information should be in the Notice and Agenda.

In a recent SAT decision [2025] WASAT 93, the Tribunal reinforced that:

👉 A COO must be properly constituted in accordance with the Act and the by-laws.

👉 Two owners appointed at the AGM were not a valid council as a quorate Council was 3 or more in accordance with their by-laws.

👉 Decisions made by an invalidly formed council can be challenged or may need to be revisited.

For schemes where filling council seats feels like pulling teeth, this case is a timely reminder:

✔️ The minimum requirement of the Act and the by-laws, aren’t optional.

✔️ “Near enough is good enough” creates serious governance and liability risks.

Strata management is full of fine details that can feel pedantic — until the moment they’re tested. That’s when they matter most.

📖 Relevant Provisions

Schedule 1 – Governance By-laws, clause 4 (Constitution of council):

“If there are more than 3 lots in the scheme, the council consists of not less than 3 nor more than 7 of the owners of the lots, as is determined by the strata company.”

Section 138 – Functions of strata company if no council or insufficient members:

“If, at any time, there is no council of a strata company or there are insufficient members of the council to constitute a quorum, in accordance with the scheme by-laws, the functions of the council may be performed by the owners of the lots in a general meeting of the strata company.”

Link below: an AI chat about SAT decision [2025] WASAT 93 (NotebookLM)

• https://static.wixstatic.com/mp3/a0f1d2_5fc62ec1217047019db85a26fefcd250.m4a