Question: The agenda notice for our AGM noted a 20% increase in levies. I sent my proxy. When the levy notice was received, it was actually an increase of 40%. Is this lawful?
The agenda for our AGM showed a 20% increase in levies plus three amended by-laws that required a vote. The AGM was held midweek during the day. Few people could attend. I sent my proxy for items on the agenda.
When the levy notice was received, it showed an increase of 40%. We have had no communication apart from the minutes saying it was resolved and amended. This seems manipulative. Is it lawful and within the proper procedures?
Answer: Matters can evolve out of discussions during a meeting, and therefore, not being personally present does lend itself to risks.
The secretary of a strata committee derives authority to convene meetings under:
- section 43(f) of the Strata Schemes Management Act 2015 (NSW) (‘the Act’) – which gives the right to convene meetings of the strata committee and owners corporation (i.e. strata committee meetings, general meetings and annual general meetings); and
- section 19 of the Act – which specifically gives the right to convene a general meeting at any time.
The authority to convene a meeting extends to the secretary being allowed to determine the time, date, location and method (such as holding the meeting in person, via video conference, etc.).
Schedule 1, clause 18 of the Act does stipulate that the owners corporation must only consider motions at a meeting if the requirements of the Act have been met.
For example, the right under Schedule 1, clause 4 of the Act for an owner to require a motion to be listed on the agenda of a general meeting and must provide an explanatory note of up to 300 words. If this requirement is not met, the motion should not be considered.
However, Schedule 1, clause 18 of the Act specifies that a motion to amend a motion can be moved during a meeting. This allows for fluidity during a meeting as matters are discussed, and perhaps a compromised version of the original motion can be agreed to instead of having rigidity. Perhaps new information has come to light during the meeting, which may influence the decisions people wish to make.
It is widely accepted that an amendment to a motion must not fundamentally alter the purpose of the original motion. For example, a motion to raise a special levy cannot be amended into a motion to register a new by-law, as the owners have not been given due notice of the intention to consider the by-law. They might have chosen to attend the meeting if they knew a new by-law would be discussed.
This presents a disadvantage for owners who attend the meeting via a proxy. Matters can evolve out of discussions during a meeting, and therefore, not being personally present does lend itself to risks.
It would not be unreasonable to expect that a motion considering levies could result in an amendment being moved to increase or decrease the contributions.
With that said, it is important that a budget and estimates of the levy contributions should be as accurate as possible leading into the meeting.
This post appears in Strata News #674.
Tim Sara
Sara Strata
E: tim@sarastrata.com.au
P: 04 8500 7960
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