Resolutions in sectional title schemes - Part 2
Previously we published a list of all the resolutions that can be taken in a sectional title scheme. The list identified the type of resolution required for specific purposes and set out the level of consensus necessary to take each resolution. However, there can be specific conditions that apply in addition to the level of consensus required to take a special resolution for a particular purpose.
Special resolutions in sectional title schemes are required to authorise significant decisions by the body corporate. Most people know that taking a special resolution requires a higher level of consensus among the owners than ordinary resolutions. What they don't know is that there are several conditions that must be met in taking the resolution, which if not taken, might result in the decision being invalid.
Ordinary resolutions are passed by a simple majority (counted in vote value) of the votes cast at a general meeting but the required percentage to pass a special resolution is 75%. Note that the percentage is not of the votes cast, as in taking an ordinary resolution, but of all the votes represented at the meeting. So, if one were to illustrate this point as mathematical fractions they would be:
Ordinary resolution = Simple majority divided by votes cast
Special resolution = At least 75% divided by votes represented at the meeting
When taking a special resolution at a meeting, the votes are counted in two ways, in number as well as in vote value.
Special resolutions can be taken either at a meeting or by circulating a document containing the text of the resolution, commonly called a "round robin" resolution, for owner signatures. Only once 75% of all the owners, again counted in number as well as in vote value, have signed the resolution, is it passed. However, there are three circumstances under which the special resolution can only be taken at a meeting and not by round robin:
Meetings require notice and there are specific requirements for the notice of a meeting at which a special resolution is to be considered, namely:
However, the trustees may not give short notice of a meeting at which the special resolution to be considered, is to authorise an improvement to the common property that is reasonably necessary. They may also not give short notice of the special resolution to authorise the installation of pre-paid meters by the body corporate on the common property. That resolution requires 60 days' notice and occupiers as well as owners must be notified.
Finally, if either a member or the body corporate cannot obtain the special resolution, they can apply to the Community Schemes Ombud Service for relief.
Article reference: Paddocks Press: Volume 13, Issue 05
Posted In: Paddocks Press Newsletter | 30 May 2018
This article is published under the Creative Commons Attribution license.