A sinking fund budget was defeated on a tied vote at the AGM. Are there options besides holding an EGM?
We're a six-lot complex under the Standard Module. At our recent AGM, the motion to approve the sinking fund budget and raise levies was defeated, with three votes for and three against. The three owners who voted against didn't attend the meeting. They submitted their votes in writing beforehand.
We're considering holding an EGM, at considerable expense, to get a reduced budget approved, but the same thing could happen again. Do we have any other options? For example, could we challenge the decision through the Commissioner's office on the grounds that it's unreasonable?
Holding an EGM is the most direct way to get a sinking fund budget approved after it has been defeated.
If you want to approve a budget for the sinking fund, holding an EGM is the way to resolve the situation.
The main alternative would be to take the matter to the Commissioner's office. If you can show the body corporate failed to meet its obligations by raising insufficient funds for maintenance, they might overturn the decision. However, this pathway will take time to resolve and may not help owner relations in a small scheme.
Otherwise, you could take no action and raise no money to that fund this year, but there would be follow-on implications from that.
What you might want to consider is how owners at your scheme are communicating with each other. Could an issue like this have been resolved with clearer communication around the levy increases?
Moving forward, the committee could write to owners to discuss the financial and maintenance obligations of the scheme. At a basic level, the body corporate is obligated to repair and maintain the common property in good condition. Is it doing that? If not, and you took a case to the Commissioner's office establishing that, you could expect to win. It might be worth making that point to the other owners. As an alternative to writing, perhaps you could organise an online meeting or other forum to discuss. Not everyone will agree on every point, but with a reasonable flow of information, management should become easier.
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Will Marquand joined the Tower team as a General Manager and Senior Strata manager in 2020. He has widespread experience across all forms of commercial, industrial and residential schemes. He believes in proactive, ethical strata management and hopes to provide Tower’s customers with the knowledge and support required to take their schemes forward into the next generation of body corporate management. Will has experience working across residential, commercial and industrial schemes. A former journalist and teacher, Will's excellent communication skills help Tower grow its expanding business. William is a regular contributor to LookUpStrata.
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