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As an owner in a strata scheme we have just had a special levy installed which I voted against, the unit / strata has 15 individual owners the Special Levy is for building maintenance costing approx. $120,000.00 and the special levy required is $50,000. At the AGM the vote went 4 against, 5 in favour.
Is this majority in attendance sufficient to pass this levy or is a 75% majority required of all 15 owners?
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If it were in the ACT, 5 in favour, 4 opposed would be a pass. It would not matter that another 6 chose to not take part in the meeting, either in person or by appointing a proxy. The motion would only fail if it could be shown that the meeting was in some way irregular. For example, if insufficient notice was given for the meeting or not all owners were notified.
In other states/territories it might be that a special resolution is required for a financial resolution. In that case, 5:4 would not be sufficient.
If 75% is required where you are, then 5 of 9 units might amount to 75% if the vote was conducted as a ‘poll vote’. If the vote were conducted as a poll then the votes are weighted according to unit entitlements. The 5 in favour might have had the larger units with more unit entitlements adding up to more than 75% while the 4 opposed might have had smaller units with fewer unit entitlements adding up to less than 25%.
Another option would be to appeal to the state Tribunal, ACAT in the ACT, VCAT in Victoria, etc. They could rule that the motion is of no effect if it could be shown that the meeting was irregular. In the ACT the ACAT can also give an order to deem a motion that passed to have failed if the Tribunal can be convinced that it was not reasonable that the motion passed. [Conversely it can give effect to a failed motion if opposition to the motion is unreasonable.] Perhaps you can show that the motion should not have passed on the grounds that the expenses are unnecessary or unreasonable? However, be aware that the owners corporation has an absolute obligation to maintain the common property so it can not readily just decide to not do the maintenance. [In the ACT, perhaps elsewhere, there is a mechanism but it requires a special resolution to decide to not maintain some aspect of the common property and the OC can only make that decision if it would not adversely effect safety or the appearance of the common property – EG. the OC could decide to no longer maintain an obsolete bit of equipment hidden away in a plant room or cupboard if it were safely disconnected from whatever it did.]
susan – as you’re in NSW the Strata Schemes Management Act (1996) applies, where in response to your question Sect 76, and specifically Cl.4, sets out the requirements for raising a (special) levy in circumstances where a necessary expense cannot be met from either the Administration or Sinking Funds.
As you’ll read there, levies are determined by a majority vote (i.e. a simple resolution) by those owners in attendance at a General Meeting, including by proxy, so unless as Peter C suggested your Meeting was in some manner “irregular”, then the 5:4 vote in favour as taken there was legitimate.
Just to add my two cents worth, Susan has lost the vote but perhaps not the battle. She and the other dissenting members probably have the numbers to call for a new general meeting (one quarter of unit entitlements) to force a discussion about whether or not a special levy is required. They could get a strata loan, for instance.
However, this time, they would be advised to hoover up any proxies they can get among those similarly alarmed by an $8k special levy.
Having said that, the Owners Corp has a legal responsibility to maintain and repair and this is exactly what happens if previous owners haven’t been putting aside money in the sinking fund.
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I can’t see where we can tell what state or territory Susan is in. Anyway, the ACT has the same provision that Jimmy mentions, that a petition by 25% of owners can require the EC to call another general meeting. The petitioners must state the matter to be considered by the meeting. All you have to do is convince a small number of people that ‘there are questions to be answered’.
I know from first hand experience that a minority of nay-sayers can easily get plenty of other owners worried with such rhetoric. It is not necessary to say what those question are or what your answers might be.
I agree that a strata loan would be an option, as would individuals getting loans as required to meet the levy for necessary maintenance of your common property.