Can I be personally sued as a committee member?

In NSW, section 260 of the Strata Schemes Management Act 2015 generally protects committee members from personal liability for acts or omissions done in good faith while performing their official functions. Any liability that would otherwise arise attaches to the owners corporation instead.

A person may threaten or attempt legal action against a strata committee member, but New South Wales law gives committee members significant protection from personal liability when they act in good faith while performing their official functions. Section 260 of the Strata Schemes Management Act 2015 provides that a good-faith act or omission by an officer or strata committee member does not personally subject that person to an action, liability, claim or demand — any liability attaches instead to the owners corporation. The protection is important, but it is not a blanket shield for every personal act, statement or decision.

What protection does NSW strata law provide?

Section 260 protects an officer of an owners corporation, a strata committee member and a person acting under their direction from personal action, liability, claim or demand for a matter done or omitted in good faith while executing functions under the Strata Schemes Management Act 2015 or another Act.

If those conditions are satisfied, the liability attaches to the owners corporation rather than the individual member. The protection applies to both an act and a failure to act, but only where the conduct is connected with the person's official function and is carried out in good faith.

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Does this mean I can never be personally named in a claim?

No legal protection can prevent another person from sending a demand, making a complaint or attempting to commence proceedings. The important question is whether the claim can properly continue against you personally. Section 260 may provide a strong basis for the individual claim to be rejected or redirected to the owners corporation when the conduct was within the role and done in good faith.

Do not assume the answer without reviewing the actual allegations. Notify the owners corporation, strata manager and insurer promptly and obtain legal advice.

What does acting in good faith mean?

The Act does not provide a short, complete definition of good faith. In practical terms, it generally means acting honestly, for a proper purpose and with a genuine intention to carry out the committee's functions for the owners corporation. A decision does not automatically lose protection merely because it later turns out to be wrong, unpopular or unsuccessful.

Conduct supporting a good-faith decision may include:

• Reading the motion, reports and relevant documents before voting
• Asking questions where information is incomplete
• Acting for the scheme rather than a personal dispute or advantage
• Disclosing financial and other conflicts
• Following the Act, regulations, by-laws and owners corporation resolutions
• Keeping confidential and personal information secure
• Recording the reasons for significant decisions
• Seeking professional advice for complex legal, building, insurance or financial matters

What duties do committee members have?

Section 37 of the Strata Schemes Management Act 2015 sets out express duties for each committee member. Following these duties helps reduce personal risk and supports the argument that a member acted in good faith.

• Act with honesty and fairness
• Use due care and diligence
• Act for the benefit of the owners corporation as far as practicable
• Comply with strata legislation and regulations
• Use and disclose owner information only for authorised purposes
• Avoid unreasonably interfering with lawful use or enjoyment of lots or common property

When might the personal liability protection not apply?

The outcome depends on the facts, and only a court or tribunal can determine liability. Personal risk may be greater where the conduct falls outside section 260's conditions.

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Can I be personally liable for a bad decision?

A decision that produces a poor outcome does not automatically make a committee member personally liable. Committees often make difficult decisions based on incomplete information, competing quotes and professional advice. The key issues include whether the member acted honestly, within authority, with reasonable care and for the owners corporation's benefit.

What about confidentiality and information handling?

Committee members often receive owner contact details, levy information, complaints, medical information, quotations, legal advice and other sensitive material. Section 37 requires members to use or disclose information obtained as a member only when required for committee functions or authorised by law. Do not forward committee documents to unrelated people, use the strata roll for personal or commercial purposes, or publish personal information in open messaging groups without a proper reason.

What if I have a conflict of interest?

A committee member who has a direct or indirect pecuniary interest in a matter must disclose the interest as soon as possible. The disclosure must be recorded, and the member must not be present during the committee's deliberation or take part in its decision on that matter, subject to any statutory exception. Examples include a member's company tendering for work, a close financial relationship with a contractor or a personal financial benefit from the decision.

Does the owners corporation have to indemnify me?

Section 260 is stronger and more specific than a general promise to indemnify: where it applies, the individual is not personally subjected to the claim and the liability attaches instead to the owners corporation. A scheme may also hold office bearers' or management liability insurance covering allegations about governance, decisions or committee conduct — the policy wording, not the informal label, determines whether a claim is covered.

What should I do if someone threatens to sue me?

• Do not ignore the threat, court document, tribunal application or formal letter.
• Do not admit personal liability or agree to pay money before receiving advice.
• Send the document immediately to the chairperson, secretary and strata manager.
• Notify the insurer or broker as soon as possible, even if the claim is only threatened.
• Preserve emails, meeting papers, minutes, reports, quotations and relevant messages.
• Prepare a factual chronology without altering or deleting records.
• Avoid arguing about the claim in group emails, social media or resident chat groups.
• Obtain advice from a lawyer experienced in NSW strata and insurance matters.
• Follow any insurer instructions about appointing lawyers or responding to deadlines.

Does this protection apply outside NSW?

Other Australian states and territories have their own strata, owners corporation and body corporate laws. Some jurisdictions provide statutory protections or insurance options for committee members, but the wording and conditions differ. Do not rely on the NSW section 260 protection for a property located outside NSW — check the legislation and insurance applying to that jurisdiction.

Key takeaways

• NSW committee members have statutory protection for good-faith acts and omissions performed as part of their official functions.
• When section 260 applies, liability attaches to the owners corporation rather than the individual member.
• The protection is not automatic for every personal act or statement.
• Dishonest, malicious, private or unauthorised conduct may fall outside the protection.
• Office bearers' or management liability insurance may cover allegations about governance decisions — always check the policy wording.
• Members must disclose pecuniary interests and step out of the affected decision.

Related questions

Can a NSW strata committee member be personally sued?

A person may attempt a claim, but section 260 generally protects a member from personal liability for a good-faith act or omission carried out while performing official functions.

Who becomes liable when section 260 applies?

The liability attaches to the owners corporation rather than the individual committee member.

Does a committee member need personal insurance?

The owners corporation may purchase office bearers' or committee liability cover. Members should review the actual policy and obtain advice about any gaps.

What if I disagree with a risky committee decision?

Ask for your concerns and vote to be recorded in the minutes, request professional advice and consider whether the matter should be referred to a general meeting.

Can I resign to avoid a claim?

Resigning may stop future committee responsibilities, but it does not determine liability for earlier conduct. Notify the insurer and obtain advice about the existing issue.

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