NSW: Q&A Proxies and Voting Rules for Owners Corporation Meetings

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Lot owners from NSW have questions about dealing with proxy votes and other voting rules for owners corporation meetings.

According to Strata Community Association (NSW), here is the definition of:

• Proxy Voting: An owner who is unable to attend a meeting may authorise (give their proxy) to another person to exercise their vote. This is achieved via proper completion of the prescribed form.

Jump directly to the QUESTION you are after:

• QUESTION: Can a vote on a decision be raised after a decision and expense has occurred? Under what circumstances does a decision require a special resolution? And who decides a special resolution is appropriate?
• QUESTION: As a special resolution is carried if “not more than 25% of the value of the votes cast are against the resolution”, can I confirm that “not more than 25% against” is different from “75% or more in favour”?
• QUESTION: Do the changes in the Strata Schemes Management Act limiting the number of proxy votes an individual may hold also apply under the Community Land Management Act?
• QUESTION: Absent owners provide a signed proxy voting form which is then handed out to individuals within the meeting. Is this legal?
• QUESTION: At our recent AGM, a husband and wife owner of one of the units EACH took a proxy giving them 2 proxy votes for their 1 lot. Is this allowed or is it a maximum of 1 proxy per lot?
• QUESTION: Are the following forms available for download – Notice of Annual General Meeting and Proxy Voting Forms?
• QUESTION: What information is included on NSW Proxy Voting Forms?
• ARTICLE: NSW Strata Reform & Proxy Votes: How many can you hold?

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Question: Can a vote on a decision be raised after a decision and expense has occurred? Under what circumstances does a decision require a special resolution? And who decides a special resolution is appropriate?

Answer: Once an expense has been incurred and paid for it is difficult to reverse

Once an expense has been incurred and paid for it is difficult to reverse and usually, the only decision that would arise, is a decision to ratify the incurring of an expense.

The strata legislation dictates which decisions must be made by special resolution. Examples of decisions requiring a special resolution include by-laws for owners carrying major renovations, management by-laws, exclusive use of common property by-laws, leasing of the common property, creation of easements, strata plans of subdivision, alterations to the common property.

Leanne Habib
Premium Strata
P: 02 9281 6440
E: [email protected]
You can connect with Leanne & Premium Strata on Facebook, Twitter & LinkedIn.

This post appears in Strata News #406.

Question: As a special resolution is carried if “not more than 25% of the value of the votes cast are against the resolution”, can I confirm that “not more than 25% against” is different from “75% or more in favour”?

The Act says a special resolution is carried if “not more than 25% of the value of the votes cast are against the resolution”.

I would like to confirm that if 4 people (with equal lot entitlements) cast votes with 3 in favour and 1 against, the special resolution motion is lost.

In other words, “not more than 25% against” is different from “75% or more in favour”. The reasoning as that 25% is not more than 25%.

Answer: Not more than 25% against is a lower threshold than at least 75%.

Your reasoning is correct – not more than 25% against is a lower threshold than at least 75% as in company law.

In your case, not more than 25% voted against, (only 25% voted against) therefore the motion carries.

Leanne Habib
Premium Strata
P: 02 9281 6440
E: [email protected]
You can connect with Leanne & Premium Strata on Facebook, Twitter & LinkedIn.

This article is not intended to be personal advice and you should not rely on it as a substitute for any form of advice.

This post appears in Strata News #380.

Question: Do the changes in the Strata Schemes Management Act limiting the number of proxy votes an individual may hold also apply under the Community Land Management Act?

Do the changes in the Strata Schemes Management Act limiting the number of proxy votes an individual may hold also apply under the Community Land Management Act? I live in a Neighbourhood Association and want to be clear as to how many proxy votes an individual may hold under the Community Land Management Act, but cannot find this in the Act.

Answer: We are not aware of any corresponding anti-proxy farming amendments having been made to the Community Land Management Act or Regulation.

Leanne Habib
Premium Strata

This post appears in Strata News #375.

Question: Absent owners provide a signed proxy voting form which is then handed out to individuals within the meeting. Is this legal?

I have an interesting question regarding Proxy votes.

Our Strata contains a number of owner born overseas that are not interested in attending meeting AGMs or EGMs.

One individual persuades these owners to provide a signed Proxy Appointment Form but without completing the Proxy voting details on the form.

At the meeting or immediately prior he hands out these forms to persons he chooses and has them place their name as the proxy Appointed. Thus he provides himself with control of the voting and has indeed a gerrymander over that meeting. The managing agent who chairs these meeting has said there is nothing illegal and proceeds with the meeting.

I am of the opinion that the Managing Agent is incorrect and indeed this would be illegal and tantamount to fraud. I am unable to locate any reference to this behaviour in the Strata Act of NSW 2015, would appreciate your opinion.

Answer: As there is no default person appointed as a proxy, the proxy could be subject to challenge.

Schedule 1 of the Strata Schemes Management Act, states “26 Appointment of proxies

Duly appointed proxy A person is a “duly appointed proxy” for the purposes of this Part if the person is appointed as a proxy by an instrument in the form prescribed by the regulations and the form is signed by the person appointing the proxy or executed in any other manner permitted by the regulations.

In our view, as no “person” is actually appointed as a proxy and as there is no default person appointed as a proxy, the proxy could be subject to challenge.

Leanne Habib
Premium Strata

This post appears in Strata News #238.

Question: At our recent AGM, a husband and wife owner of one of the units EACH took a proxy giving them 2 proxy votes for their 1 lot. Is this allowed or is it a maximum of 1 proxy per lot?

I am in an NSW Strata building with 9 lots.

We have just had our AGM where we voted in a new committee.

I am aware that each owner can now only carry 1 proxy vote each.

A husband and wife owner of one of the units EACH took a proxy – therefore they had 2 proxy votes from 2 other owners against their 1 lot.

Is this allowed or is it a maximum of 1 proxy per lot?

If it is a maximum of 1 proxy per lot, our ballot voting is therefore invalid, and can we do a re-vote at a Special General meeting? If this is required, how would it work? How would we conduct this and what would be the rules around it?

Answer: This is allowed because the limitation for proxy votes attaches to the person, not the lot.

In our view, this is allowed because the limitation for proxy votes attaches to the person not the lot and there is a specific exception for co-owners:

See Section 26 (7) below:

26 Appointment of proxies

7. Limit on number of proxies that may be held The total number of proxies that may be held by a person (other than proxies held by the person as the co-owner of a lot) voting on a resolution are as follows:
   1. if the strata scheme has 20 lots or less, one,
   2. if the strata scheme has more than 20 lots, a number that is equal to not more than 5% of the total number of lots.

Or is it a maximum of 1 proxy per lot?

No. Proxy votes are per person.

Given our view, no invalidation will be relevant/required.

Leanne Habib
Premium Strata

This post appears in Strata News #215.

Question: Are the following forms available for download – Notice of Annual General Meeting and Proxy Voting Forms?

Answer: The legislation mandates various matters which must be included on a notice for an Annual General Meeting.

Here is a link to a printable PDF of a Proxy Appointment Form – including some notes on how the form can be used.

There is no standard template that we can offer as our templates are used for our business purposes, however, the legislation mandates various matters which must be included on a notice for an AGM (other than the 1st AGM), eg in Schedule 1 of the SSMA:

Clause 4 – 4 Inclusion of matters on agenda (1) & (2)

Clause 5 Nomination of candidates for election prior to meeting (1)

Clause 6 Required items of agenda for AGM (a) – (d)

Clause 7 Notice of general meetings other than first AGM (1) – (4)

Clause 8 Matters that must be included in notice of general meetings (1) & (2)

Clause 9 Additional matters to be included in notice of AGM (a) – (i)

We hope this information is helpful.

Leanne Habib
Premium Strata

This post appears in Strata News #196.

Question: What information is included on NSW Proxy Voting Forms?

I own an apartment in a strata complex in NSW.

May I ask about proxy voting forms?

I notice that the firms that are sent to owners so they can make a choice to lodge proxy votes do not allow for the owner to make a decision on how they would like their vote to go on each agenda item or certain issues.

If you sign over your proxy vote, the person you nominate gets to decide on the vote.

Is that the usual process?

How is that fair?

Also, as an executive committee member, is there any legal reason that prevents me writing to other owners as I am fast becoming aware that a significant number are not receiving correspondence about meetings and agenda items?

Answer: The NSW Proxy Voting Forms are governed by the Strata Schemes Management Regulation 2016.

The form of proxy is governed by the Strata Schemes Management Regulation 2016.

You should compare the Regulation Form to the proxy forms provided to you. Clearly, the lot owner may direct the proxy how to vote.

Though we are not lawyers, in terms of writing to the individual owners, it is preferable to seek a qualified request for the matters to be considered at a general meeting.  As you are a strata committee member, perhaps you could raise your concerns there.  As a last resort, you could seek mediation and proceed to application for Orders from NSW Civil and Administrative Tribunal (NCAT). You should exercise caution when phrasing your concerns to avoid issues such as defamation etc arising.

Leanne Habib
Premium Strata
P: 02 9281 6440
E: [email protected]
You can connect with Leanne & Premium Strata on Facebook, Twitter & LinkedIn.

This article is not intended to be personal advice and you should not rely on it as a substitute for any form of advice.

NSW Strata Reform & Proxy Votes: How many can you hold?

Don’t get caught out. If you want to ensure your proxy votes are valid you should ensure you comply with the new proxy farming restrictions in the NSW strata reforms. Otherwise, you may be on the outside looking in and unable to vote. Be aware there are new limits on proxies, the most important of which is in schedule 1, cl 26(7) of the Strata Schemes Management Act 2016 (NSW). This clause states:

“(7) Limit on number of proxies that may be held The total number of proxies that may be held by a person (other than proxies held by the person as the co-owner of a lot) voting on a resolution are as follows:

1. if the strata scheme has 20 lots or less, one,
2. if the strata scheme has more than 20 lots, a number that is equal to not more than 5% of the total number of lots.”

What does this mean? Quite simply, if your strata scheme has 20 lots you can hold 1 proxy vote in addition to the vote for your lot. If your scheme has 21 lots or more it becomes a little more complicated and we have to do some mathematics as you need to calculate the number of lots in your scheme that total 5% or less.

To make it easier I have set out my calculations below and a table setting out the maximum number of proxies one person can hold:

If you have a 21 lot scheme: you can only hold 1 proxy in addition to your lot’s vote. Why? 1/21 = 4.75% so it is not more than the 5% allowed. But holding 2 proxies would not be permitted as it would exceed the 5% of total lot limit.

Essentially, you as a lot owner can hold the following proxy votes:

If you are not a lot owner you can only hold up to the maximum number of proxies, for instance, if it is a 60 lot scheme, you can hold three proxy votes.

What to do if you feel intimidated or want to avoid confrontation at a general meeting?

1. Have someone attend with you either as a support person or as your proxy. If you want to have someone speak on your behalf you should nominate them as your proxy. Why? Your proxy is essentially standing in your shoes and has the same rights that you would have. You can still attend the meeting however if you vote, your proxy cannot also vote on the same motion.
2. If you cannot attend, and the person you would like as your proxy cannot physically attend the meeting, then you should complete a proxy form (making sure you provide your lot number, name and the name/position of your proxy on the form and date and sign the form) and submit it to the Secretary of your owners corporation in time (in NSW for large schemes this is 24 hours before the meeting or for small schemes of under 100 lots, it is prior to the commencement of the meeting). If you want to vote in a specific way for a certain motion then specify this on your form.
3. Speak to your strata manager beforehand and let them know of your concerns. Your strata manager, if warned can intercede to try to keep emotive comments to a minimum and to keep comments constructive.
4. More generally, play the ball and not the person. Try to stay away from making comments on individuals and keep your comments on issues constructive and encourage others to do the same.
5. Finally, if the discussion starts getting heated or off track, reminding everyone of the motion to be voted on and time constraints can often cut through arguments.

Remember, the important thing is that your vote is counted. Your home is often your biggest investment you will make and as part of managing this investment it is vital that you are informed and active in your owners corporation. This includes attending meetings whether in person or by proxy.

This post appears in Strata News #118.

Allison Benson
Legal Practitioner Director
Kerin Benson Lawyers
P: 02 4032 7990
E: [email protected]

Please note: This is not legal advice. You should seek legal advice particular to your situation.

Have a question or something to add to the article? Leave a comment below.

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