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One of our EC has repeatedly attempted unsuccessfully to change strata managers. When questioned as to why he outlines various personal greivances but when pressed to state matters related to management and their services he becomes evasive.
Recently he has called an EGM (with the majority signature of the EC on a handwritten note in the foyer) to again vote upon changing strata managers- both dismissal of the current and appointment of a new manager.
He has provided no information or management agreement from the suggested new strata agent, merely stating that a delegate of the suggested strata manager will be available to answer questions at the meeting.
Apart from not including the minutes of the previous meeeting for confirmation, the proxy form provided with the meeting notice is filled in- including his own name as the appointed delegate, the number of meetings it applies to and a yes vote to each of the motions (with a star next to where to sign).
Are modified proxies legal? And is it legal to vote on a new strata management agreement without being privided with a copy prior to the meeting to endorse it?
Thanks for your help.
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I am guessing you are in NSW. I am in the ACT where the legislation is a little different. Nonetheless, the Act would specify the form of notice required to call a general meeting. I expect that just a note on a notice board is not sufficient to call a general meeting. A valid notice of a meeting would, I expect, require a certain amount of notice to be given, for certain details about time and place to be on the notice, perhaps a particular form to be used, and all notices to be mailed to all owners at the address for correspondence that has been registered on a list of lots held by the OC.
There is nothing wrong with the EC proposing motions and advocating a yes vote for its proposals. Preparing proposals for the management of the OC is part of their job. Still supplying a proxy form with the boxes already ticked is a bit over the the top! I think in NSW the Act specifies how a proxy form appears in more detail than in the ACT. If the pre-filled form is the only one provided then I would expect you have a good case for saying it is not a valid proxy form.
I suggest you talk to your neighbours to gauge their reaction. Perhaps there is general dissatisfaction with the present manager? On the other hand, it seems like the EC has gone off half-cocked. If I were on the EC, and if I were dissatisfied with the present manager, I would be working with the rest of the EC to assess alternative managers, look at their terms, conditions and prices, checking whether other OCs were happy with those managers and only then present a case for a change along with a motion to engage a particular new manager. The EC does not need a general meeting decision to give it permission to research options.
renjay58 – so far as the Notice of Meeting (i.e. the agenda) is concerned, if it and a copy of the Minutes of the last General Meeting were provided to all Owners at least 14 days before the Meeting date, then that’s in compliance with the provisions of the NSW Strata Schemes Management Act (SCMA).
With regard to the Proxies, provided the correct FORM was used and the person granting their proxy has signed it and in this instance there’s a preference clearly shown at Item 3, then that too is in compliance with the SCMA, as even though that form has been “modified” in the manner you describe it could be argued that the person granting it was in agreement with the extent of that pre-completion.
So whilst all the above may be contrived, and even if Notice was provided less than 14 days beforehand and had been without the previous Minutes, an EGM provides some “wiggle-room” in those respects, and if challenged, the process would be likely considered legal unless it could be proven that the Resolutions taken would have been different had total compliance with the SCMA occurred; that would be for you to judge after the Meeting.
Similarly, a vote by simple majority of those present at the Meeting both personally and by proxy to terminate the services of the current Strata Manager (SM) would be legal, provided that’s also in accordance with the procedures given in their Agency Agreement with your Owners Corporation, where a minimum period of 3 months written notice to the SM generally applies.
Legal compliance is one thing, but making a sound decision is another in this instance, where if it’s not careful the O/C could deprive itself of a smooth hand-over of records and management continuity from one SM to another, or worse still find itself for some period with no Strata Manager at all.
So as Peter suggested, do some lobbying with other Owners to gauge support for a more measured process of changing SM (or not), and if you don’t get the numbers perhaps look at those in the context of you calling for a “poll vote” at the Meeting on the Motion about the SM, where the outcome is determined on the basis of Owners’ units-of-entitlement as opposed to a simple majority vote.
I think Whale has been a bit gentle on this issue. A pre-filled proxy form ready for signature, without an alternative blank form for completion by the individual owner (along with a clear explanation that there is no obligation to follow the recommendations of the caller of the meeting) strikes me as a breach of principles of appropriate governance. This EC member seems to be aiming to exploit natural inertia among some owners, and hope they will sign anything that looks ‘official’ in order to get an awkward issue out of the way quickly. Whether or not renjay58’s strata manager deserves to be replaced, the decision should be made by an informed majority. renjay58 should certainly try to communicate with as many fellow owners as possible, encourage attendance in person at the meeting (which would invalidate any proxy already given in ignorance) to learn first hand of the issues behind its convening or, if individuals are unable or unwilling to attend, ask for a later-dated open proxy, on the prescribed form, in his favour (which should also invalidate any proxy extracted by the dubious process described in the opening post).
excathedra – I am gentle sometimes, but seriously, whether the actions of the Member are as I observed “contrived” or as you stated “breach of principles of appropriate governance”, there’s little that can be done about that unless someone who’s entitled to a vote was denied that such in circumstances where the Notice of Meeting wasn’t provided in the prescribed timeframe, or where some procedural matter such as the providing of Proxy Forms wasn’t managed properly and it can be shown that a Resolution of the Meeting would have been different if those procedures had been properly followed.
Every post so far had suggested that renjay58 should be speaking with other Owners to explain what’s going on and the consequences of an ill-conceived vote, so that should be happening!
Just one final thought renjay – casually mention to your sneaky Member and to any of his supporters that unless the correct procedures are followed prior to the commencement of the planned EGM, you will be seeking Orders in the NSW Civil & Administrative Tribunal under the provisions of Sects 153 and 154 of the NSW Strata Schemes Management Act to have any and all Resolutions there taken invalidated and/or nullified.
Should you actually see the need to do that (and don’t be hesitant), then use THIS form and watch the timeframe shown in Sect 154, and come back here if you need some further advice from people who have been through the process.
If nothing else, you can point out at the meeting that it is normal to have the agency agreement included in the meeting notice so that people have a reasonable change to know what they are agreeing to. We include the agreement even when renewing every few years with a manager we are generally happy with. A few years ago an owner noticed a slightly odd clause and with the manager present at the meeting the general meeting was able to resolve to accept the agreement subject to an amendment to that clause. It was not a big deal but only possible because we distributed the agreement with plenty of time for people to read it.
It is usually easier to scare people with the unknown than to convince them of a known change so you don’t have to prove anything bad about the new manager or suggest that the old manager did not deserve to go. You only need to argue that the meeting does not have all the information it needs and a reasonable time to consider the information in order to make an informed decision.
renjay58 – back in post #3 I amongst other things said…..
… a vote by simple majority of those present at the Meeting both personally and by proxy to terminate the services of the current Strata Manager (SM) would be legal, provided that’s also in accordance with the procedures given in their Agency Agreement with your Owners Corporation, where a minimum period of 3 months written notice to the SM generally applies.
So did your Owners Corporation provide its current Strata Manager (SM) with the prescribed notice of its intention to terminate the Agency Agreement (usually a minimum 3 months before its expiry date)?
On the basis of what you’ve posted so far, I think not, so unless the current SM has agreed to other terms with regard to termination, if the intention of the EGM is still as you originally stated to dismiss the current SM and to appoint a new one, then that cannot happen without placing your Owners Corporation both in Breach of Contract, and as I again stated earlier, in a position where a smooth hand-over of records and management continuity from one SM to another will not occur, and worse where your O/C may find itself for some period with no Strata Manager at all.
So perhaps that’s one of the things that you should be focusing your questions on, as well as raising the possibility of Orders being sought to invalidate the Resolution/s.
Renjay – I’m a little confused, but assuming the Meeting was the one to change Strata Managers, then even though there were only three (3) attendees, if that was was a quorum (albeit as you state barely) then I don’t understand why there was no vote on the Motion, because in that way you could either have adjourned it, defeated it, or found out if the instigator really did have those proxies and thereby passed it and put the whole saga to bed, and have your easily-manipulated majority suffer the consequences!
Anyway it’s too late now particularly as there’s an AGM on the way, but again I’m confused about your statement that you’ll “never have the necessary 75% in attendance at AGM or EGM to even attempt a motion to exclude”; exclude what?
If you mean to vote-down or to defer the Motion to terminate one Agency Agreement and to commence another, then that’s determined one way or the other by a simple majority vote, where you only need 51% of those in attendance at the Meeting (including by proxy) to decide upon the outcome.
Quite frankly, other to again urge you and like-minded Owners to also letterbox drop in order to encourage a majority to attend the AGM or to at least sign yet another proxy (as a replacement for any given to the instigator) including their explicit instructions regarding a change of Strata Manager at item 3, then I don’t know what more I can suggest as a means to have your Owners Corporation make an informed decision on this issue.
Perhaps print all the responses here and distribute that with your letterbox drop, together with a blank proxy form.
renjay – you seem to be confusing how the voting majority to pass a special resolution is applied, where it’s not ≥75% of Owners in the Plan who need to vote that way, but rather ≥75% of those in attendance at the Meeting, both personally and by proxy.
Further, you only need a simple majority vote when it comes to electing members of the Executive Committee (E/C), and as those members’ tenure automatically expires at each Annual General Meeting (AGM), if/when the vexatious Owner nominates for re-election at your upcoming AGM, a vote against that by >50% of those in attendance would defeat that nomination.
So whilst you’ll probably still have to do some more lobbying in order to have like-minded Owners attend the AGM or to provide you with their proxies in order to obtain the >50% to vote-down the unwanted E/C nomination, be conscious of the fact that in circumstances where it’s often difficult to have people even nominate for election, there’s no minimum number required to form an E/C (only a max. of 9) and that individual Members once elected can hold multiple positions.
NO… a person who is not an Owner must be nominated for election to the Executive Committee by a person who is an Owner.
Schedule 3 Clause 2(4) of the NSW Strata Schemes Management Act (1996) applies.
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