A Body Corporate holds meetings to discuss and make decisions about matters affecting the unit title, but what are the requirements of such meetings and how can a Body Corporate ensure they fulfil these obligations.
The Unit Titles Act 2010 (the Act) and the Unit Titles Regulations 2011 (the Regulations) set out the express powers and duties of the Body Corporate (other powers and duties may be set out in operational rules). As an owner of a unit title property you are automatically part of the Body Corporate and therefore you have the ability to participate in decision making for the development. The Body Corporate will generally have a chairperson and depending on the number of units in the development, there may be a Body Corporate committee (with the delegated authority of the Body Corporate) to attend to day-to-day business. For developments with 10 or more units there must be a Body Corporate committee (unless decided otherwise by special resolution 75%).
Annual General Meetings (AGM) and Extraordinary General Meetings (EGM) are the two types of meeting a Body Corporate can hold and are where decisions are made. They are an opportunity for unit owners to vote on certain matters affecting their unit and the development as a whole. An AGM must be held annually and cover matters such as appointment of a chairperson, a committee, insurance, financials, proposed budgets, long term maintenance plans, and raising of levies. An EGM is held where a notice signed by no less than 25% of the principal units is given and often these will be held to deal with issues that come up during the year like repairs, resignations, or other issues that cannot wait for the next AGM.
The Body Corporate Chairperson (Chairperson) is responsible for calling meetings and must call the meeting in accordance with the Regulations.
Notice of Intention to hold an AGM
- Notice of intention to call an AGM is to be issued to every unit owner using their preferred method of contact at least 3 weeks before the date of the AGM.
- Notice must contain the details of the meeting, invite nominations for the Chairperson and committee (where applicable), and matters for discussion. The Regulations set out all the details to be included in the Notice.
- The meeting agenda must be issued at least 2 weeks before the meeting.
- The agenda must include motions to be decided by resolution, names of candidates for election, voting procedures for proxies or by post, procedure if quorum not present, financial statements for the most recent financial year, and a proxy or postal vote form.
Notice of Intention to hold an EGM and agenda
- A similar process as for AGMs is used where the EGM calls for an election of a Chairperson or committee members. Notice asking for nominations must be sent at least 2 weeks before the meeting and an agenda at least 1 week before the meeting.
- Where the EGM does not include an election, the notice must be sent al least 1 week before the meeting and include all the information included in the agenda.
The AGM or EGM can only proceed where there is a quorum, which is 25% of the unit owners entitled to exercise a vote (including proxies). Where a quorum is not present the meeting must be abandoned and reconvened at a time advised to all unit owners giving at least 3 days notice of the reconvened meeting.
Once a quorum is established, motions are passed by ordinary resolution or special resolution. A special resolution is required where decisions could have significant consequences for unit owners and for a special resolution to pass 75% of eligible voters must vote in favour of the resolution. The Act and Regulations state where a special resolution is required. Every other decision will be decided by ordinary resolution and can be passed by a majority of eligible voters who vote on the resolution.
Tips to ensure effective decision making There are more complexities to calling meetings and voting however we set out some practical tips about this area to ensure decisions are correctly made and cannot be questioned:
- Timing for notice: the minimum timeframes are set out in the Regulations however it may be practical to give more notice of an AGM or EGM so that there is enough time to put together a comprehensive agenda. For example, the notice of intention may be best served more than 3 weeks from the date of the meeting.
- Days: when served, the minimum time period for notice does not include the day of service.
- Information: the agenda should have as much information as possible to ensure unit owners can make informed decisions.
- Attendance: all unit owners attending the meeting should be noted and it should be recorded which unit owners have not paid their levies. Non-financial unit owners are not eligible to vote and should not be counted to calculate quorum.
- Voting: we did not go into detail in relation to postal voting or voting by proxy these are valid ways of voting in meetings where a unit owner cannot attend. The unit owners should decide on the method of how voting is to take place (given the Act does not expressly set this out). For example, an owner could move a resolution and another unit second the motion prior to voting taking place - voting may then be by secret ballot or by a show of hands.
At Cavell Leitch, we have considerable experience with running Body Corporate meetings and assisting Body Corporates comply with their obligations under the Act & regulations. Please do not hesitate to contact one of our experts today should you require our help.
Copyright © Cavell Leitch. All rights reserved. Redistribution is only permitted with express written permission. For enquiries please contact us. This article by its nature cannot be comprehensive and cannot be relied on by clients as advice. It is provided to assist clients to identify legal issues on which they should seek legal advice. Please consult the professional staff of Cavell Leitch for advice specific to your situation.