Question: Why does the AGM agenda have the details of our 22/23 insurance policy rather than our current policy held by the body corporate for 23/24?
How should we deal with the electronic voting agenda for our upcoming AGM? Why does the agenda have the details of our 22/23 insurance policy rather than our current insurance policy held by the body corporate for 23/24?
The notice of the Annual General Meeting describes the current year’s (23/24) insurance. However, the electronic voting agenda description refers to last year’s (22/23) insurance. Over 20% of owners have voted electronically. We are concerned voters may not have recognised the error.
Our body corporate manager says it doesn’t matter. The electronic voting agenda is not about our current insurance policy and it can be confirmed at next year’s AGM as well as next year’s policy. Is this correct?
Answer: Whether the insurance is in place is a matter of fact, and owners can’t really vote no to this motion.
Since the legislation changed in March 2021, insurance approval has been a committee issue, with the committee’s spending limit extended to an unlimited number so they can select the policy on behalf of the body corporate.
This was a positive change, as the timelines around insurance approvals didn’t really fit in with the legislated timelines around calling meetings. Under the old system, if schemes got their insurance renewal details two weeks before the renewal date, arranging an EGM with a minimum 21 days’ notice for owners to vote on it was impossible. This put many schemes in breach of the legislation, and the change in the law was a practical measure to implement what was already the default practice of the committees making the approvals.
However, one side effect of the change was that it put the traditional insurance motion in a bit of limbo. There is still a requirement to declare the insurance at the AGM, but it is no longer the case that owners are voting to approve the next insurance policy. To resolve this, most body corporates have generally settled on having a motion asking owners to confirm the current insurance is in place.
At some level, this motion may be superfluous. It is a matter of fact whether the insurance is in place, and owners can’t really vote no to this motion – but it is a reasonable vehicle by which details of the insurance policy can be communicated to owners.
As such, while there may be some issue with the notice duplicating previous insurance information, the manager may be correct in stating that this impact is minimal. Nothing really changed. It is the committee’s right to choose the policy, and once it is in place, it is in place.
Still, you may well be within your rights to think that the manager shouldn’t just brush the matter under the carpet. Errors on meeting notices are not the end of the world, but once identified, it is usually best practice to make the error known to owners and clarify with the correct information. This could be important with insurance as while owners might not select the policy, they still need to be clear about what level of coverage they have. Once the correct information has been presented, owners can still change their votes if needed, or the chair could rule the motion out of order. Here, perhaps a letter to owners advising of the issue and providing the correct details of the insurance may have been a better way of handling the situation than simply saying it doesn’t matter that much.
This post appears in Strata News #679.
William Marquand
Tower Body Corporate
E: willmarquand@towerbodycorporate.com.au
P: 07 5609 4924
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