Voting and Quorums
Each week we will examine a key aspect of the changes. We delve into the changes in more detail so Owners Corporations Managers and Committees can be prepared and understand their rights and obligations. This week we are looking at changes to Voting on resolutions of the Owners Corporation and quorums.
Our earlier blog gave a summary of the changes to the Owners Corporations Act 2006 which commence on 1 December 2021 as a result of the passing of The Owners Corporations and Other Acts Amendment Act 2021. It is available at on our website.
Voting
From 1 December 2021 voting is clarified:
Any votes cast in a ballot shall be based on one vote for each lot for ordinary resolutions and one vote for each unit of lot entitlement for special and unanimous resolutions.
There shall be one vote for each lot based on a show of hands (or as otherwise resolved at the meeting) for voting at meetings. However, if at a meeting a lot owner before or after the vote is taken requires that a poll be taken, then the vote shall be based on one vote for each unit of lot entitlement. This only applies to ordinary resolutions and not special or unanimous resolutions.
An ordinary resolution shall be passed if a simple majority of votes cast at the meeting vote in favour of the resolution. If there is a deadlock then a Chairperson who is a lot owner or authorised to vote on behalf of a lot owner as a proxy shall have a casting vote and if that right is not exercised, the vote shall be deemed not to have passed.
There is from 1 December, a restriction on number of lot owners on behalf of whom a proxy may vote on a resolution. A person must not vote as a proxy on a resolution at a meeting of the owners corporation on behalf of more than one lot owner if there are 20 or less occupiable lots on the plan of subdivision; or on behalf of more than 5% of the lot owners if there are more than 20 occupiable lots on the plan of subdivision.
The restrictions do not apply if the lot owners for whom the person is authorised to vote are members of the persons family.
This will have a dramatic impact on those that run around trying to collect proxies in order to influence a vote of the Owners Corporation. Rather than having proxies try and vote at meetings, you might find that those trying to influence votes will use postal ballots more often and then try and get lot owners to vote on the ballot and have it returned.
Quorums
Currently, a quorum was determined for a general meeting by having at least 50% of the total votes or if 50% of the total votes is not available the quorum is at least 50% of the total lot entitlement.
From 1 December, this will change to be that a quorum was determined for a general meeting by having at least 50% of the total number of lots or if 50% of the total number of lots is not available the quorum is at least 50% of the total lot entitlement.
If a quorum is not achieved then resolutions passed would be interim resolutions. From 1 December, if no lot owner turns up to a meeting (whether in person or by proxy), the manager of an owners corporation may pass an interim resolution at a general meeting of the owners corporation at the meeting.
This will be welcome relief to managers that manager owners corporations where lot owners refuse and/or fail to turn up to meetings.
However, as a protection to Owners Corporations, a manager must not pass an interim resolution under this new power that:
(a) affects the contract of appointment of the manager; or
(b) involves an amount that is greater than 10% of the annual budget of the owners corporation; or
(c) if the annual budget has not been set for the relevant year, involves an amount that is greater than 10% of the annual budget of the owners corporation for the previous year.
It should be noted that Owners Corporations may by ordinary resolution, exclude or alter the power of the manager to make an interim resolution under these new powers.
Owners Corporations, committees and managers need to be careful when counting votes and ensure that misuse/abuse of the new provisions is monitored. The changes to quorums will assist Owners Corporations making decisions when the majority of lot owners do not take an active interest or participation in the running of their Owners Corporation.
Need Advice ?
Phillip Leaman, principal of the Owners Corporations practice group of Tisher Liner FC Law and his very experienced team can provide assistance to owners corporations, committees, lot owners and managers in a range of owners corporations legal matters. We have substantial experience in taking actions against builders, building surveyors, architects and plumbers for original building defects on common property and private lot property.
We also act for lot owners and Owners Corporations in respect to Owners Corporation governance and assisting managers and committees.
We believe Owners Corporations want to maintain peaceful, functional living environments for owners. Our mission is to provide a fresh perspective on resolving legal disputes and to inspire Owners Corporations to achieve outcomes that preserves the value of assets and restores harmony. We are expert Owners Corporations lawyers.
For advice or assistance, please contact Phillip Leaman on 03 8600 9314 or by email [email protected].
To see earlier spotlights on the amendments check out our website. Our website also has more information on Owners Corporations as well as a range of helpful blogs and podcasts.