There are three types of resolutions that can be passed at a general meeting of an Owners Corporation. They are:
- An ordinary resolution
- A special resolution
- A unanimous resolution
Each type of resolution can only be rescinded by another resolution of the same type. For example an ordinary resolution may be rescinded by another ordinary resolution and a special resolution may be rescinded by a special resolution.
The type of resolution required for a particular decision is determined by the Strata Management Act. A notice of meeting must clearly indicate which motions require a special or unanimous resolution for their passage. A motion that is not designated as a motion for a unanimous resolution does not become a unanimous resolution merely because it is passed unanimously.
Most matters considered at general meetings require an ordinary resolution. This means that at least half of the people present, either in person or by proxy, who are entitled to vote must vote in favour of the motion.
Motions that require a special resolution include adding or altering common property, waiving interest on strata levy arrears and adding, amending or repealing strata bylaws. To pass a special resolution no more than one-quarter of the people present, either in person or by proxy, who are entitled to vote can vote against the motion.
The value of a vote is determined by the unit entitlement of the lot in respect of which the vote is being cast, subject to a possible reduction of the value of the vote of an original owner.
This is a potential example of how lot volume could equate to voting entitlements:
Aggregate = 130
¼ aggregate = 33
It is important to note that:
- If the original owner no longer owns any lots and a motion is proposed for a special resolution, then (assuming the owners of all lots vote) the sum of the unit entitlements of all lots voting against the motion must not exceed 33. Therefore, if lots 2 and 5 (total 35 unit entitlements) vote against the motion it will be lost.
- If lots 1 and 7 do not cast a vote, then in order to pass the motion as a special resolution there must not be more than 24 unit entitlements against the motion (there are 95 unit entitlements voting on the motion, 1/4 x 95 = 23.75 i.e. 24).
- If the original owner owns lots 5, 6 and 7 (total 70 unit entitlements), then the original owner’s vote would be reduced to one-third (1/3 x 70 = 23.33 i.e 23). It would be counted as 23. If all lots voted there would be a total of 93 unit entitlements voting. In order to pass the motion as a special resolution there must not be more than 24 unit entitlements against the motion. Therefore, if lots 1 and 2 (total 25 unit entitlements) vote against the motion it will be lost.
Motions that require a unanimous resolution include the winding up of a strata scheme and the distribution of surplus funds. For a unanimous resolution to pass, no person can vote against the motion. Owners do not need to be financial to vote on unanimous resolutions.
If a motion requires a special or unanimous resolution it will be noted on the general meeting agenda. In this case, the general meeting agendas will also be sent to all mortgagees and covenant charges listed on the strata roll.
If you have any questions regarding resolutions, please contact your Strata Manager at Netstrata.