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NSW: Strata Resolutions – What is Required?

strata resolutions

This article is about strata resolutions in NSW schemes, including ordinary and special resolutions. When the owners corporation is making a decision, which resolution is required and why?

Strata owners corporations will, over time, need to make decisions about a wide range of matters. Some decisions can be made by the strata committee or by the strata managing agent under delegated authority, but the most important decisions will need to be made by a resolution of the owners corporation at a general meeting. To ensure the legality of such resolutions, it is important to be aware of the different kinds of resolutions contemplated by the legislation, when they are required and how to make them.

The following issues need to be considered:

In theory, only a simple majority is required, but there are some factors that make it more complicated:

The following issues need to be considered:

Special resolutions are required in a wide range of circumstances, e.g. where a decision involves:

A special resolution requires that no more than 25% of the votes cast, by unit entitlement, are against the resolution, i.e. a 75% majority of those present and entitled to vote. This is subject to the same complicating factors as applies to ordinary resolutions.

Pending legislative changes in relation to sustainability infrastructure will change this. Where a special resolution is required, it will be sufficient, in the case of a “sustainability infrastructure resolution”, if it is opposed by less than 50% of owners entitled to vote, i.e. reducing the bar from 75% support to 50% support.

Unanimous resolutions are required in a more restricted range of circumstances, including where a decision involves:

A unanimous resolution requires that no vote is cast against the resolution, i.e. a 100% majority of those present and entitled to vote. This is subject to the same complicating factors as apply to ordinary resolutions, except that an owner does not need to be financial to vote on a unanimous resolution.

Conclusion

It would be a worthwhile exercise for strata schemes and their strata managing agents to consider these issues and develop procedures to deal with them.

We have considerable experience with these issues and could help you pre-empt difficulties in this area.

Bannermans Lawyers T: 02 9929 0226 Suite 702, 2 Elizabeth Plaza North Sydney NSW 2060

This post appears in the December 2020 edition of The NSW Strata Magazine.

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

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The information contained in this article is general information only and not legal advice. The currency, accuracy and completeness of this article (and its contents) should be checked by obtaining independent legal advice before you take any action or otherwise rely upon its contents in any way.

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