What is a Special Resolution?

Published: Monday 21 October 2019

What is a Special Resolution?

 

Here is what the Strata Schemes Management Act says:

 

Resolutions of owners corporations

Section 5  - Resolutions of owners corporations

(1) In this Act, a resolution of an owners corporation is a
"special resolution" if--

(a) it is passed at a properly convened general meeting, and

(b) not more than 25% of the value of votes cast are against the resolution.

(2) For the purposes of determining a special resolution, the value of a vote in respect of a lot is equal to the unit entitlement of the lot. However, if the total unit entitlement of lots of the original owner is not less than half of the aggregate unit entitlement, the value of the vote in respect of those lots is taken to be reduced by two-thirds (ignoring any fraction).

(3) In this Act, a resolution of an owners corporation is a "unanimous resolution" if it is passed at a properly convened general meeting and no vote is cast against the resolution.

Note : A motion or election that is not required to be approved by a special resolution or unanimous resolution is passed by a simple majority of votes (see clause 14 of Schedule 1).

 

What does this mean in plain English?

There are certain motions in the legislation, such as passing a new (or amending an existing) bylaw, which must be done by special resolution.

A special resolution is when a motion requires no more than 25% are against the resolution – based only on unit entitlement (u/e) for voting for the total of the u/e of those present.

The aggregate to determine the 25% is not based on all owners, but is 25% of those owners on the strata roll who are present, in person or by proxy at the meeting, and are entitled to vote (ie are financial).  Add up the u/e of those lots only to get the aggregate.  Based on that aggregate, calculate 25%.

It is important to note the words “not more than” in this section of the Act.  So if the u/e do add up to 25% per the paragraph preceding, then it is still passed.

 

For Example:

In a scheme of 6 units where each has a unit entitlement of 33, the total u/e would be 198.

A quorum would be 3 owners, or 50% of the u/e, being present in person or by proxy providing all of those lot owners have paid their dues. 

Thus the aggregate if only 3 attended (or if more attend but are unfinancial) is 99.  So in this case the 25% to prevent the motion being passed would be 24.75 u/e against the motion.  Accordingly, as every unit has 33 u/e it would only takes one owner against the motion to DEFEAT it.

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