Question: Are AGM votes and committee decisions valid if the strata manager does not run formal voting and the committee does not record majority decisions?
Our strata manager ran our recent AGM on Zoom. For each resolution, they did not call for a show of hands or run a ballot. Instead, they asked questions like “is everyone happy with this” or “does anyone disagree”. This differed from the voting process used by our previous strata manager.
I am also concerned that our committee members may not understand how decisions are being made. They make decisions through discussion without taking a formal majority vote. I became aware of this after requesting meeting minutes because the committee was not keeping owners informed about structural issues and rectification works.
In these circumstances, are the AGM resolutions and committee decisions valid, and what records and voting process should be followed for meetings held electronically?
Answer:The manager should always explain the voting process and note it in the minutes.
There are definitely a few elements to what you’ve described. Straight away, the first thing to note is that in Victoria, being under the Owners Corporations Act 2006, there is a very broad structure around voting in meetings. However it is not prescribed in the level of detail that some may believe it is, so far as either General Meetings or Committee Meetings are conducted.
Please note, I won’t touch on voting by poll, or for Special, and Unanimous Resolutions within this response, given they’ve not been raised and are more complex to work through.
For General Meetings
Section 87 One vote for each lot
For any resolution of an owners corporation, there is to be one vote for each lot, whether the resolution is voted on—
- at a meeting; or
- by ballot.
Section 89 Voting on a resolution of the owners corporation at a meeting
- Subject to subsection (3), a person may vote on a resolution of the owners corporation at a meeting by a show of hands or in another prescribed manner, unless the meeting resolves otherwise.
And yep, that’s it. No wording on how a motion or resolution should be proposed, any mentioning of seconding – or not – of the motion, amending a motion, failure to amend a motion, speaking to a motion … or anything of the kind. Indeed, the wording “unless the meeting resolves otherwise” effectively allows ANY voting format to take place – so long as it is resolved (i.e., stated and voted upon in favour) at the start of the meeting.
It may be a show of hands, a paper ballot, or, as with your new manager. Assuming a unanimous vote for each motion, but asking if there are objections, is not at all an uncommon practice in the name of efficiency. Though it should be said that this is typically done at larger meetings where it is much more practical for both the chairing of the meeting, and those attending, to ask who is voting AGAINST a motion rather than for it.
If a meeting is to vote in this fashion, then best practice is that:
- This form of voting is described on the agenda, with a motion to accept this as the first item after acknowledging attendees;
- The wording may be similar to (for example); members attending the meeting will be asked if there are any objections or abstentions to each motion, and if there are none, that all resolutions will be taken to be voted unanimously in favour. Whereby a motion receives votes against, or abstentions, the vote will be recorded as being passed by majority and the number of objections and abstentions recorded. If the number of objections exceeds half the members attending, the motion will be noted as defeated and not passed.
- A verbal reminder and explanation at the start of the meeting when this motion takes place, which goes through how the voting will work.
The reasoning behind this form of voting, or vote-tallying, goes back to my earlier efficiency mark – it’s a lot more efficient to reverse from the default assumption that everyone is voting against a motion unless they vote in favour, to assuming that everyone is voting in favour of the motions unless they object. After all, these are by and large standard requirements for an owners corporation. Additionally, recording the number of objections and abstentions has a smaller margin of error, since there are almost always far fewer of them.
Different strata management businesses have a different set of standard operating procedures (SOPs) around how they set up their voting practices, and what you’ve encountered is not at all uncommon. There isn’t necessarily a ‘right or wrong’ about it, so long as the process taking place always enables a motion to be either passed or defeated – i.e. it has to be voted upon, one way or another.
Committee Meetings are largely the same
Section 112 Proceedings of committee
- The quorum for a meeting of a committee is at least half of the members of the committee.
- A resolution of a committee must be made—
- by ballot; or
- by show of hands or in another prescribed manner.
- Each member participating in a meeting is entitled to one vote.
As we see above, there is a huge amount of variation, or ‘flex’ permitted. Regarding committees, there is also a public policy argument for allowing some flexibility. By that, I mean that the committees are volunteers, and for owners corporations to function, volunteers have to find the middle ground between motivation, time capacity, and not being ‘turned off’ by the additional unpaid workload involved. If part of the unpaid workload involves learning and adhering to burdensome procedural requirements (as some certainly would view voting to be if it were more in line with the requirements of companies under the Corporations Act instead of the Owners Corporations Act), then there will be fewer volunteers either becoming, or staying, committee members.
However, motions can’t be passed by friendly agreement, they have to be put to a vote – whether that vote is framed as ‘everyone starts as not in favour and those in favour raise your hands/voice’, OR, ‘everyone starts in favour and those against, raise your hands/voice’, isn’t contemplated by the legislation and doesn’t vary the outcome – just as long as the process has been explained, as per above.
In my view, the best practice, or perhaps the ‘middle-ground’, rests in the management style. The manager should always explain the voting process and note it in the minutes. During the pandemic, there were 1-3 page documents prescribing all kinds of meeting engagement and voting procedures using the then-novel platforms ‘Zoom’ and ‘MS Teams’ (among others). This may have covered all possibilities, but the best run meetings were those where this was well-explained at the commencement of the meeting and reminded of here and there throughout.
And lastly, the safeguard must always be accurate minutes, recording all voting processes and results, produced in a timely fashion (i.e. 2-3 days post-meeting for draft review, other than where vote-counting via forms takes additional time to verify). A motion can’t be passed by ‘general discussion’, and just as importantly, if there were objections or abstentions, they need to be recorded as such. If the minutes aren’t recording voting outcomes, but are instead just reflecting discussions, raise the matter to either the particular manager you have, or ask to have a respectful conversation with their intra-company manager, with either/both discussions about your concerns.
This post appears in Strata News #787.
Alex McCormick
SOCM
alex@socm.com.au
P: 03 9495 0005
Leave a Reply