4.9 Getting legal advice | Owners Corporation Network

4.9 Getting legal advice

There are many situations where an executive committee would consider obtaining legal advice. Such things as drafting by-laws, stamping or not an owners development application, contracting or terminating a building manager, attending to defects or suing for damages. The NSW legislation provides appropriate restraints and caps for expending funds on legal advice and commencing legal proceedings:

  • Grants an owners corporation the power to sue (section 50(1)(c) Interpretation Act 1987 (NSW) 1987);
  • Requires an ordinary resolution at a general meeting to expend funds on legal advice and to start proceedings (section 80D);
  • Exempts from the above resolution requirement expenditure on legal advice and the taking of legal proceedings if the reasonably estimated costs will not exceed a prescribed sum (Reg.15 Strata Schemes Management Regulation 2010); and
  • Further exempts absolutely from restrictions on expenditure and lawsuit, the recovery of unpaid levy contributions and interest (Reg.15).

It is worth noting that the committee is free to seek advice in going about the day-to-day business of the scheme. However, this expenditure is capped. In NSW in 2012 this cap was a maximum of $12,500. In NSW an ordinary resolution (i.e. a simple majority) is required at a general meeting of the owners corporation for amounts exceeding this cap before any legal proceedings commitment is made. A simple majority at a general meeting is usually not hard to get if the merits are persuasive.

Generally, there would be some legal costs before realising that the total cost may exceed the cap. At that stage you should ask you legal representative and a couple of other lawyers for an estimate of the total costs. If the estimate is above the cap you need to call a general meeting and put it to the owners corporation to decide. Of course, provide them with some simple pros and cons of the action, what the issue is about, the (simple) legal argument and its strengths and weaknesses, the reason the executive committee are considering legal action, the outcomes if the legal action is successful or fails.

Be aware that there are many legal view points and interpretations. One lawyer’s opinion and expertise and depth of reply may be vastly different to that of another lawyer. If you have an important or potentially expensive issue – get the best legal advice you can, and if you don’t like the advice – get a second opinion to check if there is another interpretation of legislation, precedents and strategy.

Relevant NSW Legislation: Strata Schemes Management Act (1996)

Section 80D: Legal action to be approved by general meeting


Relevant NSW Legislation: The Strata Schemes Management Regulation (2010)

Regulation 15 Exemptions from need for approval for certain legal action


Relevant NSW Legislation: Interpretation Act (1987)

Section 50 (1)(c)  Statutory corporations may take proceedings and be proceeded against in its corporate name


What Members Say

"The whole strata community owes a huge debt of gratitude to you and the OCN executive. Much appreciated."

Robert, Darlinghurst

"I am very pleased with my membership of OCN, the discussions through sharing emails is very valuable in increasing my knowledge of strata living, the laws and EC responsibilities. I think I am better armed to tread the minefield of the managing agent responsibilities and the necessary action of the EC to monitor the contradictory interests of the agent."

Jim, Wollstonecraft

"I so appreciate being part of the OCN email forum. It provides a great opportunity for sharing ideas and learning"

Ingrid, Neutral Bay

"I must say that I have enjoyed and found consolation in the discussions that have been part of the email chain (forum). I did attend one general meeting and found that it was informative and the people "running the show" were knowledgeable and dedicated to the tasks that had taken on. In short, well done. You and the committee have and continue to support the Strata Community in a very professional manner."

Greg, Parramatta

"Nothing is easy in Strata World and we have been in building defects “mode” for some years – hopefully almost at an end but that process has been most demanding and difficult but again – greatly helped by the experience and wise counsel of other members of OCN."

Pat, St Leonards

"Keep up the good work, as many (if not most) strata schemes need your help, advice and representation at all levels of government."

Jann and John, St Ives

"I belong to OCN because of its professionalism.  I have found the meetings I have been to extremely well presented, to the point, and of course very topical and informative. Speakers on the whole certainly know their topic.  My role of Secretary last year was certainly assisted with the coverage regarding TPG & other subjects. Member newsletters are also of benefit as the topics are specific to strata matters."

Graham, East Balmain

I have enjoyed attending the quarterly OCN meetings and the exchange of emails between other Executive Committee Members and think OCN is playing an increasingly important role as a voice for strata dwellers and representing us at Government level. I wish the organisation continuing success in the future."

Pauline, Kings Cross

"The [forum] response to my question was amazing and really useful.  The OCN community is wonderful so thanks."

Jenny, Killara

"I would like to thank you all for the important effort that you are all putting in to look after apartment owners and tenants. It is so valuable and you are heroes. I would not have been able to deal with my duties as a strata chairman without your advice and assistance." 

Angela, Mascot

"The OCN is invaluable – many thanks."

Bill, Surry Hills

"OCN is proving invaluable"

Sue, Neutral Bay

"Thanks to all at OCN for your continuing efforts to keep us up to date with current strata information and advice...it has been very helpful to us"

Kate, Coogee

"When my wife & I first encountered a problematic Executive Committee I heard that OCN was a great help (from a Strata manager whom I knew) so we both joined and have gratefully used the on-line information sources. We continued to happily rely on OCN’s assistance when we progressed to Committee status & later as Chair & Secretary of our Committee. I still use OCN in my current role as Treasurer."

Peter, Chiswick

"Thanks to OCN for being such a rich resource of trustworthy information about strata matters."

Peter, Chiswick

"I wanted to extend my personal thanks for the very informative & interesting event today. The OCN team did an outstanding job in the organisation of this event & I enjoyed it thoroughly. The quality of speakers, the flow of conversation & interaction from the attendees - first class …& of course, the amazing Jimmy T - always a delight."

Sue, Epping

"OCN does a great job in providing a really valuable service to Strata owners."

Lois, Wollongong

"I am sure my appreciation of your good works is echoed by many in the Stratasphere. Keep up the good work."

John, Elizabeth Bay

"Once again, being able to discuss such things through this forum, helps clear the mind, puts things into perspective and helps one to understand their rights and to form a strategy if needs be. As a simple EC member trying to do what is in the best interests of lot owners, I truly value OCN and am grateful."

Pamela, Point Lookout

"The OCN is probably one of the best, most informed and most informative groups I have been involved with."

Alan, Maryville