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Building Management Committees (BMC)

The use of a Building Management Committee (BMC) structure by developers has increased significantly in recent years due to the increased demand for larger mixed use buildings. Many buildings now house combinations of commercial, retail, hotel and residential tenancies within the same building.

An example of this type of building structure is graphically shown below:

Each of the different “uses” within the type of building shown are called “stratum parcels”, and two or more such stratum parcels located vertically within the same building are generally be governed by what is known as a Strata Management Statement (SMS).

This Strata Management Statement is registered and lodged with the Land and Property Management Authority (LPMA – previously called the Land and Property Information) as part of the Department of Lands. The SMS is a binding document on the owners and occupants of the building, in a similar fashion as by-laws for a traditional strata scheme are binding on owners and occupiers.

Under Schedule 1C Clause 2 of the Strata Schemes Freehold Act 1973, the matters that must be included in a Strata Management Statement for a building on a freehold parcel of land are:

the establishment and composition of a building management committee and its office bearers, and

the functions of that committee and those office bearers in managing the building and its site, and

the manner in which the statement may be amended, and

the settlement of disputes, or the rectification of complaints, concerning the management of the building or its site, whether by requiring reference of disputes or complaints to the Director-General or the Tribunal or (with the consent of the person) to any other person for a recommendation or decision or otherwise, and

the manner in which notices and other documents may be served on the committee.

A Strata Management Statement will often set out the management, use and maintenance of any shared facilities that individually or jointly service the stratum lots within the building and the responsibility for the costs of these facilities. Some common examples include:

the fire safety equipment
the insurance of the building structure and the decisions made by the building management committee
Electricity
Gas
The external painting and maintenance of the façade

The Strata Management Statement will define the percentage of cost that is payable by each stratum lot for each shared facility item. A typical schedule might look like the following:

As can be expected, the owners of each stratum parcel will often have different ideas and goals for the building. It is therefore fair and appropriate for all stratum parcels to have a voice on the decisions that affect the building as a whole. Fortunately, a Building Management Committee (BMC) structure provides this mechanism.

The Strata Management Statement is administered by the owner(s) or a representative of the owner(s) from each of the stratum parcels. These representatives form a committee known as a Building Management Committee (BMC). A Building Management Committee (BMC) is not a legal entity, therefore plant, equipment and property cannot be owned by Building Management Committee (BMC) itself.

The Building Management Committee (BMC) will typically meet at least annually to determine the levies to be raised to cover expenditure, which of its members will hold each of the office bearer positions, whether to approve applications for owner works that affect the appearance of the building and other matters that are defined under the Strata Management Statement.

The management of a Building Management Committee is often highly technical and requires a specialised knowledge of the various legislations that affect such developments. The team at The Strata Agency have a breadth of knowledge in this area and welcome enquiries regarding our services in this area.