A simple guide to Owners Corporation resolutions

A resolution is a legally binding written and recorded decision made by an owners’ corporation either at a meeting or by ballot. Resolutions are an integral part of OC operations. Without them, decisions cannot be made, and action cannot be taken. Despite their importance, there can be confusion about which type of resolution is required and when. So, here’s our simple guide to OC resolutions.

Ordinary resolutions.

Most resolutions made in OCs are ordinary resolutions. They are passed by a majority of votes either at a meeting or via a ballot. The committee of management is delegated the power to make ordinary resolutions on behalf of the Owners Corporation.

For example, an ordinary resolution is used to confirm the accuracy of minutes, elect a committee, approving financials and more.

Unanimous resolutions.

A unanimous resolution is passed by all lots voting in favour of a resolution. It is required for the following:

  • Changing the plan of subdivision (including changes to lot liability and/or entitlement).
  • Disposing of all or part of the common property.
  • If there is no common property, resolving for each lot owner to arrange their own insurance.
  • If there are multiple single dwellings with common property, resolving for each lot owner to arrange their own insurance.

Special Resolutions

A special resolution is passed as a final resolution by 75 per cent of total lot entitlement voting in favour if a ballot or poll is taken. In any other case, it is passed by 75 per cent of the total votes of all lots voting in favour.

A special resolution can also pass as an interim special resolution if at least 50 per cent vote in favour and no more than 25 per cent vote against a resolution.

  • An interim special resolution can be taken as a special resolution once:
  • A notice is sent to all owners (within 14 days of the meeting or the ballot close date) and
  • within 29 days of the meeting or ballot close date no petition amounting to 25 per cent of votes against the resolution has been received.

The following requires a special resolution:

  • Obtaining a loan that exceeds the amount of the current annual fees of the Owners Corporation.
  • A significant alteration to common property that is not in the maintenance plan and is not an immediate threat to safety or will prevent significant damage.
  • Extraordinary payments from the maintenance fund.
  • Making or amending the rules.
  • Commencing legal proceedings for a claim over $100,000 that is not either enforcing the Owners Corporation rules or recovering fees.
  • Leasing or licensing any part of the common property.
  • Obtaining a lease or licence over any land.
  • Providing a service or entering into an agreement to provide a service to lot owners, occupiers, or the public
  • Raising a levy that is more than twice the current annual fees.

Understanding lot entitlement and lot liability.

Lot entitlements and lot liabilities are set out in the Plan of Subdivision and determined by the developer (in conjunction with a licensed surveyor) at the time of subdivision.

Lot entitlement refers to a lot’s share of ownership of the common property and determines voting rights.

It is important to understand that one lot does not necessarily equal one vote.

Lot liability represents the share of Owners Corporation expenses that each owner is required to pay •

For further information: theknight.com.au/our-news-and-insights/category/strata-insights/

Kills off the talent too early

Kills off the talent too early

August 3rd, 2022 - Rhonda Dredge
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