Introduction
Managing a sectional title scheme requires making various decisions. Different decisions require different levels of consensus of the trustees and members of the body corporate in sectional title schemes. The general principle is that the more the decision affects the members of the body corporate (from a financial perspective), the higher the level of consensus is required.
Trustee resolutions
The trustees must exercise all the body corporate’s powers and functions assigned and delegated to them the STSM Act in accordance with resolutions taken at general meetings and meetings of the trustees. The trustees must meet to carry out the body corporate’s business, adjourn and otherwise regulate their meetings as they think fit. They must do so in conformity with the provisions of the STSM Act, the PMRs and the principles of the common laws of meetings.
A motion at a trustee meeting must be determined by resolution adopted by the majority of the trustees present and voting. The motion does not need to be seconded. Each trustee is entitled to one vote. In circumstances where all the deliberative votes of the trustees including that of the chairperson are tied, the chairperson has a casting vote (except where there are only two trustees).
There are options for taking trustee decisions without physically meeting. The trustees can take resolutions in writing, or hold meetings remotely. These two procedures that are provided in the PMRs for the taking of trustee decisions without physically meeting assists the body corporate in ensuring that the trustees continue to execute the powers and duties delegated to them by the body corporate notwithstanding any practical difficulties in actually meeting.
Trustees can also adopt resolutions in writing in circumstances where a notice is sent to each trustee which contains the text of any proposed resolution and instructs the trustees to indicate their agreement to their resolution by signing the document within the time stipulated in the notice.
The trustees may arrange meetings to be held by telephone or over video conference calling. In these circumstances notice must be given to all trustees whether they are absent from the country or not. Remote trustee meetings must be accessible to all the trustees and other persons entitled to attend the meeting; must permit the attendees to communicate with each other; and allow the chairperson to confirm with reasonable certainty the identity of the participants. Any person attending a remotely held meeting is considered present in person at that meeting.
In circumstances where a power of function is not specifically designated to the body corporate by the legislation, the trustees can take the decision by way of trustee resolution. There are decisions can be taken by either the body corporate or the trustees; and decisions must be taken by the trustees by resolution; and decisions that can must be taken by the trustees in writing.
Ordinary resolutions
Most decisions are taken by the body corporate by ordinary resolution. Ordinary resolutions are taken by a simple majority (calculated in PQ value) of members present and voting at an AGM.
Special resolutions
Special resolutions are defined in section 1 of the STSM Act as:
“Special resolutions means a resolution –
- Passed by at least 75% calculated both in value and in number, of the votes of the members of a body corporate who are represented at a general meeting; or
- Agreed to in writing by members of a body corporate holding at least 75% calculated both in value and in number, of all the votes.”
Furthermore, the body corporate may make arrangements for the attendance at an AGM or SGM meeting to be done telephonically, or by any other method on condition that the method:
- Is accessible to all the members and other persons entitled to attend the meeting.
- Permits all the persons participating to communicate with each other during the meeting.
- Permits the chairperson to confirm with reasonable certainty the identity of all the participants.
Special resolutions are taken for important decisions of the body corporate such as to approve the body corporate borrowing money; authorising the extension of a section; substituting, adding to, amending or repealing the conduct rules; to appoint an executive managing agent; and to approve the installation of pre-paid meters.
Unanimous resolutions
Unanimous resolutions are defined in section 1 of the STSM Act as:
“Unanimous resolutions means a resolution –
- Passed unanimously by all the members of the body corporate at a meeting at which –
- at least 80% calculated in both value and number, of the votes of all the members of the body corporate are present or represented; and
- all the members who cast their votes do so in favour of the resolution; or
- Agreed to in writing by all the members of a body corporate.”
Unanimous resolutions are taken for important decisions of the body corporate such as to authorise the body corporate to alienate or long term let all or part of the common property; the addition of, or amendment or repeal of management rules; to decide that the buildings are deemed to be destroyed; to authorize an improvement or alteration to the common property that is not reasonably necessary; and to authorise the body corporate to make loans from body corporate funds.
Conclusion
Community scheme living requires group participation and voting for decisions that affect the common property. It is important that the trustees decide what type of consensus is required before any decision or project is undertaken.
WRITTEN BY DR CARRYN DURHAM
