Body Corporate Committee Member Liability: Are You Personally at Risk?

You volunteered for your strata committee. Maybe you wanted to improve things. Maybe nobody else put their hand up. Either way, you're now making decisions about budgets, maintenance, and by-law enforcement.

Then you get a letter from a lawyer. Someone's suing you personally.

This scenario keeps good people from serving on committees - and that's a problem. But here's the thing: the fear is often worse than the reality. Committee members have significant legal protections in most situations. Understanding when you're protected and when you're not is the key to serving confidently.

Related Guides

• Body Corporate Committee Performance - How to evaluate and improve committee effectiveness
• How to Deal with Body Corporate Disputes - Resolving conflicts before they escalate
• How to Choose a Body Corporate Manager - Getting professional support

Your Legal Duties as a Committee Member

Duty of Care

When you join a committee, you take on a duty of care. This doesn't mean you need to be perfect - it means you need to act reasonably and in good faith.

What this looks like in practice:

• Attending meetings and participating in discussions
• Reading materials before making decisions
• Asking questions when you don't understand something
• Acting on professional advice when appropriate
• Making informed decisions based on available information

You're not expected to be an expert in building maintenance, law, or accounting. You're expected to apply reasonable judgment and seek expert help when needed.

Fiduciary Responsibilities

Committee members owe fiduciary duties to the body corporate and all owners. Think of it like being a trustee - you're managing other people's money and property interests.

Core fiduciary obligations:

• Act honestly and in good faith
• Act in the best interests of the body corporate (not individual owners, including yourself)
• Avoid conflicts of interest
• Don't profit personally from your position
• Keep body corporate information confidential

These duties apply to all committee members equally, whether you're the chair, secretary, or just a general member.

When You're Protected

Statutory Protections by State

Australian states provide significant protections for committee members acting in good faith.

New South Wales

The Strata Schemes Management Act 2015 protects committee members from personal liability for anything done or omitted in good faith while exercising their functions. This protection is quite broad - it covers decisions that turn out badly, as long as you acted honestly and reasonably.

Queensland

The Body Corporate and Community Management Act 1997 provides similar protections. Committee members aren't personally liable for acts or omissions done honestly and without negligence in performing their duties. The "without negligence" requirement is important - gross carelessness can still expose you.

Victoria

The Owners Corporations Act 2006 protects committee members acting in good faith. Victoria also has specific provisions around committee decision-making that, when followed, strengthen your protection.

Other States

Western Australia, South Australia, ACT, Tasmania, and Northern Territory all have comparable protections, though the exact wording varies. The common thread: act honestly, act reasonably, follow proper processes.

The "Business Judgment Rule"

Even when making decisions that later prove to be wrong, you're protected if:

• You acted in good faith for a proper purpose
• You didn't have a material personal interest in the matter
• You informed yourself to the extent you reasonably believed appropriate
• You rationally believed the decision was in the best interests of the body corporate

This isn't about getting every decision right. It's about making informed, honest decisions.

When You're Exposed

Scenarios That Create Personal Liability

1. Conflict of Interest

Your brother-in-law's company gets the painting contract. You didn't disclose the relationship. You voted to approve it. This is textbook conflict of interest.

How to avoid it: Declare any personal interest before discussions. Abstain from voting on matters where you have a conflict. Leave the room during deliberations if appropriate.

2. Acting Beyond Your Authority (Ultra Vires)

The committee decides to spend $200,000 on a major renovation without owner approval, when your by-laws require approval for expenses over $20,000. You've acted outside your authority.

How to avoid it: Know your scheme's spending limits. Get owner approval for major decisions. When in doubt, call a general meeting.

3. Gross Negligence

You receive multiple reports about a dangerous railing. You do nothing for months. Someone gets injured. This goes beyond ordinary mistakes - it's a serious failure to act.

How to avoid it: Address safety issues promptly. Document decisions and actions. If you can't fix something immediately, implement interim safety measures and communicate timelines.

4. Fraudulent or Dishonest Conduct

Approving payments to fake vendors. Misappropriating body corporate funds. Using your position to benefit yourself financially. These actions remove all protections.

How to avoid it: Don't do this. Maintain transparent financial processes. Require multiple signatories on payments.

5. Defamation

Making false statements about owners in committee minutes or communications. Calling someone a "criminal" without evidence. Publishing accusations that damage someone's reputation.

How to avoid it: Stick to facts in official communications. Avoid personal attacks. If you need to address behavior, describe the actions, not the person.

Insurance: Your Safety Net

Management Liability Insurance

Most body corporates carry management liability insurance (also called office bearers insurance or committee liability insurance). This covers committee members for claims arising from their duties.

Typical coverage includes:

• Legal defense costs
• Settlements and judgments
• Wrongful acts claims
• Employment practices claims (for bodies corporate with employees)
• Investigation costs

Check your policy for:

• Coverage limits (are they adequate for potential claims?)
• What's excluded (intentional acts are always excluded)
• Whether individual committee members are named insureds
• Notification requirements (when and how to report potential claims)

Volunteer Protection

Some states have specific volunteer protection legislation that can apply to unpaid committee members. This provides an additional layer of protection beyond the strata-specific laws.

NSW's Civil Liability Act 2002, for example, provides that volunteers aren't personally liable for acts or omissions done in good faith while carrying out community work.

What Insurance Doesn't Cover

No insurance will protect you if you:

• Act fraudulently or dishonestly
• Deliberately cause harm
• Act with criminal intent
• Knowingly breach your duties

Insurance protects good-faith mistakes, not bad behavior.

Common Myths About Liability

Myth 1: "I Can Be Sued for Every Bad Decision"

Reality: You can only be successfully sued if you breached your duty of care or fiduciary duties. Making a decision that doesn't work out isn't automatically a breach. Courts give significant latitude to business judgments made in good faith.

Myth 2: "The Chair Is More Liable Than Other Members"

Reality: All committee members share the same duties. The chair may have additional procedural responsibilities, but they're not more liable for collective decisions. Every member who participated in a decision shares responsibility.

Myth 3: "Abstaining Protects Me From Liability"

Reality: Abstaining from a vote might actually work against you if you abstained to avoid accountability rather than due to a genuine conflict. If you disagreed with a decision, vote against it and have your opposition recorded.

Myth 4: "The Strata Manager Handles Everything, So We're Not Liable"

Reality: Delegating to a professional manager doesn't eliminate committee oversight responsibilities. You're still responsible for monitoring the manager's performance and making key decisions. Blind delegation isn't protection.

Myth 5: "Volunteers Can't Be Sued"

Reality: Volunteer status provides some protection, but not immunity. The protection applies to good-faith actions, not negligent or dishonest conduct.

How to Protect Yourself

Document Everything

Keep proper minutes:

• Record who attended
• Note key discussion points
• Document the information considered
• Record how decisions were made (unanimous, majority vote, etc.)
• Note any dissenting votes

If it's not in the minutes, it didn't happen - at least from a legal perspective.

Seek Professional Advice

When facing complex decisions, get professional input:

• Legal advice for by-law enforcement, contracts, disputes
• Engineering reports for building defects
• Financial advice for major fund decisions
• Insurance advice for coverage adequacy

Document that you sought and followed professional advice.

Follow Proper Processes

Every decision should follow your scheme's established procedures:

• Proper meeting notice
• Quorum present
• Agenda items discussed
• Motions formally moved and seconded
• Votes properly counted and recorded

Procedural shortcuts create liability exposure.

Manage Conflicts Properly

When you have a conflict of interest:

1. Disclose it immediately and fully
2. Recuse yourself from discussion
3. Leave the room during deliberations
4. Don't vote on the matter
5. Ensure your absence is recorded in minutes

Review Insurance Annually

At each AGM, check that:

• Management liability insurance is in place
• Coverage limits are adequate
• The policy is current
• All committee members understand what's covered

When to Step Down or Abstain

Signs It's Time to Step Down

Consider resigning from the committee if:

• You have ongoing conflicts of interest that can't be managed
• You can't commit the time needed to fulfill your duties
• You fundamentally disagree with the direction the committee is taking
• Your relationship with other committee members has broken down irreparably
• You're facing personal legal issues that could affect your judgment

There's no shame in stepping down. It's better than staying and not fulfilling your duties.

When to Abstain

Abstain from specific decisions when:

• You have a material personal interest
• You haven't had time to properly review the relevant information
• A family member or close associate is directly affected
• You're being asked to ratify something you didn't participate in

State-Specific Resources

Getting Help

NSW: Fair Trading Strata Schemes | NCAT for disputes

Victoria: Consumer Affairs Victoria | VCAT for disputes

Queensland: BCCM Office | QCAT for disputes

Strata Community Association: www.strata.community - Offers committee training nationally

Key Takeaways

You're protected when you:

• Act honestly and in good faith
• Make informed decisions
• Follow proper processes
• Disclose conflicts of interest
• Seek professional advice when needed

You're exposed when you:

• Act outside your authority
• Have undisclosed conflicts
• Ignore serious safety issues
• Act fraudulently or dishonestly
• Fail to exercise basic care

Committee service is manageable when you understand the rules. Most committees operate for years without any legal issues. The key is doing the basics right: attend meetings, stay informed, act honestly, document decisions, and get help when you need it.

Don't let fear keep you from serving. Your building needs good people who are willing to step up.

This article is for informational purposes only and should not be considered legal advice. Liability exposure depends on specific circumstances, state legislation, and your scheme's by-laws. Consult a lawyer for advice about your particular situation.