Convening a meeting
Meetings must be convened and held in the prescribed manner. This varies depending on the type of meeting (see above). The main elements of the process are as follows:
- The meeting is convened: This can happen either by consensus, or else a group of owners ‘requisitioning’ a meeting. It is also possible for the Tribunal to make an order requiring that a meeting be held;
- Notice: To properly convene a meeting a notice must be issued which must specify the type of meeting, place and time of the meeting etc;
- Agenda: An agenda must be provided which lists the motions which will be considered at the meeting, the agenda should clearly indicate the type of resolution sought (ie ordinary, special or unanimous);
- Notice period: The Act makes strict provision for the notice periods that apply and these vary depending on the type of meeting.
There are no rules as to how many general meetings must be held each year, or executive committee meetings but there is a rule that an AGM must be held annually. The strata managing agent should manage this process with the executive committee.
The Act has strict provisions with respect to notice of meetings must be provided. Essentially:
- seven days notice must be provided for a general meeting (plus the time for postage) which normally means a total of ten working days must be allowed;
- 72 hours notice (normally taken to be three working days) must be allowed for a meeting of the executive committee (plus the time for postage etc if some members of the executive committee do not live in the building).
The Act also has strict provisions about how a notice should be issued, and the forms and instructions that must be provided. The Chapter on meetings describes these in detail.
Placing a motion on the Agenda
Meetings are held to consider motions. If done properly, the motion should be on the agenda. There are essentially three types of motions:
- Ordinary resolution:
- Special resolution:
- Unanimous resolution:
Many owners corporations hold meetings and fail to issue proper notices and agenda for the meeting. If a meeting is held and the motion was not placed on the Notice and Agenda, the resolution made could be challenged in a Court and be found to be invalid.
The legal argument is very simple, an owner is entitled to know what is on the agenda so they can decide whether or not to attend the meeting.
An important motion should always be on the written agenda issued to all owners.
It is also important to note that the Act says that the only person who can place a motion on the Agenda of a meeting is a person who is entitled to vote. In effect this means that a strata manager cannot place motions on the agenda without the approval of an owner. Many strata managers make a lot of money by ‘dreaming up’ motions and bylaws, placing them on the agenda of meetings, and then charging a substantial fee to administer the decisions etc. if you have a strata manager who does this – sack them!
Many strata managers will of course draft motions, have an email conversation with a favourite owner, and then subsequently place the motion on the Agenda – this is a neat way to get around the law and legally charge large fees. The author is aware that some unscrupulous strata management companies reward their strata managers with financial inducements to place lots of motions and bylaws on the agenda of meetings by directly linking salary to services charged.
Requisition letter
If you want to hold a meeting to make an important decision, and you feel that the issue is contentious, you should always formally “requisition” a meeting. The Act says that anyone who has more than 25% of the vote can require a meeting to occur at any time. If you have less than 25% of the vote, then quite simply you need to join forces with other owners or else you need to wait for the next scheduled general meeting.
There is no specified form to “requisition” a meeting but the following letter is a good example to follow:
Insert your address here
Date
Strata manager / Secretary
Dear Sir
Re: Requisition for extraordinary general meeting
Pursuant to cl 31(3), Sched 2 of the Strata Schemes Management Act 1996 (NSW), we, the undersigned persons entitled to vote in respect of lots the total unit entitlement of which is more than one quarter of the aggregate unit entitlement, hereby requisition the convening of an extraordinary general meeting as soon as practicable after your receipt of this requisition with an agenda to include the motions which are submitted pursuant to clause 36, Schedule 2 of the Act at Annexure “A”.
Lot No. u.e. Name Signature Voting Capacity
1 10 u.e. John Smith X Owner
2 10 u.e. Andrew Symon X Owner
TOTAL 20 u.e. our of a total of 50 u.e. for the building ie 40% of the aggregate entitlement
The requisition letter should be submitted together with all the documents listed below.
A requisition letter is not always required, for example an executive committee may willingly agree to place a motion on the agenda of the next meeting, or alternately include the motion on the agenda of the next general meeting or annual general meeting. In these circumstances the letter is not required, but if you want action, and you don’t want to wait, then there is no other way to do it properly.
The actual motion that you want considered at the meeting should then be physically attached to the letter. See the chapter on resolutions and bylaws for examples of the sort of motions that you may wish to put on the agenda.
If the matter is routine, it will often by more convenient to send the motion by email to make it easier for the strata manager to copy and paste the motion into the template used for the notice but this is not necessary.
Secretary prepares documentation
When the secretary or strata manager receives a properly completed requisition they must promptly call a meeting. The processes that must be followed are described below but include:
Select a venue, date and time
When relationships break down arguments can arise over the most trivial issues, for example the decision as to where to hold the meeting has been known to cause enormous arguments.
As a rule-of-thumb, meetings should generally be held at the actual strata building, ideally in a meeting room if one exists or alternately in one of the apartments if an owner volunteers. The most suitable alternative location is the strata manager’s office. Other locations should only be considered if neither of these locations are feasible.
There is no requirement to hold meetings at a time to suit individual owners, the determination as to when to hold meetings is the responsibility of the secretary or strata manager.
If the matter is complex and litigious and it is planned that solicitors will attend, or if experts are being asked to present evidence, it is normal for practice for meetings to be held during normal business hours if professionals are required to attend. Additionally it is common legal practice for solicitors to provide to the secretary a number of dates and times that they are available and the secretary should comply with requests of this nature.
It is commonly stated in strata management agreements that executive committee meetings and AGM’s are the only meetings that are held after normal business hours. Meetings should not be held early in the morning or late at night.
Notice & Agenda for the meeting
A Notice & Agenda must be prepared for every meeting. The Act has specific requirements for how much notice must be provided which must be complied with. The secretary cannot change the motion as submitted (but they can add other motions to the agenda if they desire).
It is often tempting to cheat and cut the time, but this will weaken your case.
There is no prescribed form for the “Notice of meeting” but the following example contains the minimum elements required.
Extraordinary General Meeting Notice
Strata Plan Number SP XXXX
Address Insert address of the Strata Plan here
Date Insert date of meeting here
Time Insert time of meeting here
Meeting venue Insert location of meeting here
Agenda
1. THAT motion 1 at Annexure A be passed by ORDINARY resolution.
[The motions and supporting attachments in “Annexure A” form part of this agenda.]
Signature of secretary / person requisitioning meeting ______________________
Alternately if the motion is simple, the secretary or strata manager who is calling the meeting might type the actual motion onto the actual notice.
Provide instructions
Good strata management practice says that in addition to the actual notice and motions for consideration, it is also necessary to provide a brief set of instructions to all owners who receive the notice of meeting. This should be done every time. This is essential. Standards exist which can be varied to suit each situation but the following example contains all of the key elements. The example below briefly describes who can vote, how votes are counted and how a quorum is determined and how to complete the proxy form.
Notice of a general meeting of the Owners Corporation
Please note
1. If owned by an individual - voting and other rights conferred by Schedule 2 to the Strata Schemes Management Act 1996 may be exercised in person or by proxy;
2. If owned by a Corporation - voting and other rights conferred by Schedule 2 to the Strata Schemes Management Act 1996 may be exercised only by the company nominee in person or by proxy appointed by the corporation.
3. A vote at a meeting of an owner of a lot does not count if a priority vote in respect of the lot is cast in relation to the same matter. A "priority vote" is a vote by a mortgagee or covenant chargee in accordance with their priority as shown on the strata roll in relation to the lot.
4. An owner of a lot or a persons with a priority vote in respect of any lot may not vote at the meeting on a motion (other than a motion requiring an unanimous resolution) unless payment has been made before the meeting of all contributions levied on the owner and any other amounts recoverable from the owner, in relation to the lot that are owing at the date of the notice.
Quorum
STRATA SCHEMES MANAGEMENT ACT 1996, Schedule 2 Part 2, 12 Quorum
(1) A motion submitted at a general meeting of an owners corporation must not be considered, and an election must not be held, unless there is a quorum present to consider and vote on the motion or on the election.
(2) There is a quorum for considering and voting on such a motion or at such an election only if:
(a) at least one-quarter of the number of persons entitled to vote on the motion or at the election is present, either personally or by duly appointed proxy, or
(b) at least one-quarter of the aggregate unit entitlement of the strata scheme is represented by the persons who are present and entitled to vote on the motion or at the election, either personally or by duly appointed proxy.
(3) However, if there is more than one owner in the strata scheme and the quorum calculated in accordance with subclause (2) is less than 2 persons the quorum is 2 persons entitled to vote on the motion or at the election.
(4) If a quorum, as provided by subclause (2), is not present within the next half-hour after the relevant motion or business arises for consideration at the meeting, the meeting stands adjourned for at least 7 days.
(5) If a quorum, as provided by subclause (2), is not present within the next half-hour after the time fixed for the adjourned meeting, the persons present personally or by duly appointed proxy and entitled to vote constitute a quorum for considering that motion or business.
Proxy Form
The attached proxy form should be signed, dated and returned to our office or given to the Managing Agent, secretary or other executive committee member prior to the start of the meeting. A proxy must be in the form of the proxy attached to this notice.
Joint owners should both sign the proxy form. If both attend the meeting, one should be appointed the proxy of the other, otherwise the person whose name appears first on the strata roll is the one entitled to vote.
A corporation’s company nominee must be noted on the strata roll by a notice or the enclosed proxy form signed under the corporation’s common seal or under its power of attorney.
A proxy lasts for the period specified in it (not exceeding 12 months) or for 2 consecutive annual general meetings, whichever is the greater, unless sooner revoked.
We hope that you will be able to attend or that you can send in a proxy so that a quorum is achieved for the meeting.
Most strata management companies have their own proforma page of instructions and the ISTM also provide an example.
Provide a proxy form
A proxy form must be provided to every owner for every meeting without exception.
The following is the form of the proxy form. The strata manager or secretary may partially complete the form by including the strata plan number etc on the form.
Form 3 Proxy Appointment Form
Strata Schemes Management Act 1996
Date: ____________________
I/We ____________________
the owners of lot ____________________
in Strata Plan No. ____________________
appoint ____________________
of ____________________
as my/our proxy for the purposes of meetings of the owners corporation (including adjournments of meetings).
Period or number of meetings for which appointment of proxy has effect
[ 1 ] meeting / [ 1 ] months * Delete whichever does not apply
(Note: The appointment cannot have effect for more than 12 months or 2 consecutive annual general meetings, whichever is the greater.)
*1 This form authorises the proxy to vote on my/our behalf on all matters. OR
*2 This form authorises the proxy to vote on our behalf on the following matters only:
[Specify the matters and any limitations on the manner in which you want the proxy to vote.]
* Delete paragraph 1 or 2, whichever does not apply.
*3 If a vote is taken on whether the Managing Agent should be appointed or remain in office or whether another managing agent is to be appointed, I/we want the proxy to vote as follows: ____________________
Signature of owners …………………………
Signature of proxy …………………………
Notes:
1. A proxy is not authorized to vote on a matter:
(a) if the person who appointed the proxy is present at the relevant meeting and personally notes on the matter, or
(b) so as to confer a pecuniary or other material benefit on the proxy, if the proxy is a strata managing agent, caretaker or on-site residential property manager.
2. This form is ineffective unless it is given to the secretary of the owners corporation at or before the first meeting in relation to which it is to operate and it contains the date on which it is made.
3. This form will be revoked by a later proxy appointment form delivered to the secretary of the owners corporation in the manner described in the preceding paragraph.
It must be stressed that proxy forms are important legal documents and must be recorded and retained with the strata records for seven years. In the corporate world a number of offences relating to misuse of proxy forms carry jail terms – this is unlikely to ever happen for a meeting of an owners corporation but the Tribunal take this very seriously.
Post and place on the notice board
The Secretary or person who has prepared the Notice and Agenda must then post the notice and place a copy of the Notice and Agenda on the Notice Board.
In some situations, a bylaw can be passed to state that a notice board is not required but this is a rare exception.
Notice period
The Act requires that a notice period be allowed. The minimum time allowed is seven (7) days, see section XX of the Act plus time for Australia Post to deliver the letter. Effectively, it is normal to allow ten (10) working days for a general meeting ie 2 weeks from the date the Notice is postmarked.
Ignore this at your peril, it is often tempting to try and fast-track this process but all a disgruntled owner with knowledge of the law has to do is retain the envelope and notice, prove that proper notice was not provided and take the matter to the Tribunal.
Use of email and registered mail
Legal opinion of the use of email and registered mail varies, however it is generally considered wise to use mail for all general meetings with email as an optional extra, especially if there are contentious matters on the agenda.
A common argument used by disgruntled or vexatious people is that they “did not receive the notice” of a meeting, and they were therefore denied the opportunity to vote. This is a difficult argument to counter but the author has successfully used registered mail to prevent arguments of this nature.
The extra cost of sending the notice of meeting via Australia Post’s registered mail service is minimal and the receipt provided by Australia Post is then valid in court if necessary.
