Question: At the recent AGM, a motion was passed to spend $90K+ on a security upgrade. As a small group of owners who oppose due to lack of transparency around the decision, what can we do?
At the recent AGM, a motion was passed to spend $90K+ on a security upgrade, which includes a sizeable special levy to raise some of the funds. No details about the cost estimate or scope of works were provided to owners.
The vote was passed because few owners attended the AGM and many gave their proxy to the Strata Council. As a small group of owners who oppose this expensive security upgrade due to lack of transparency, higher maintenance priorities (eg water ingress), and low cash reserves, what independent avenue of appeal is left for us? Can we take the issue to SAT for adjudication? What are our other options?
Answer: If the motion was passed as an Ordinary Resolution, the special levy should have been included in the Budget that was submitted for approval at the meeting.
Ideally we need some additional information to respond in detail to this query – for example, how many lots are in the strata scheme, and what was actually being proposed to be done as part of the ‘security upgrade’ (for example, does that mean new/improved fencing, automated gates, alarm systems, CCTV, security guard patrols, etc?).
If the motion was passed as an Ordinary Resolution (as per Section 133 of the Act) which is a simple majority of those present and represented by proxy who were entitled to vote at the meeting, Section 102 also applies in that the special levy should also have been included in the Budget that was submitted for approval at the meeting.
Depending on the details of the ‘security upgrade’, the provisions of Section 91 (2) may also need to be met, which means a Special Resolution rather than an Ordinary Resolution was needed.
Some clarity on the comments above, plus a professional legal opinion, would be beneficial before an application is made to the SAT.
This post appears in Strata News #528.
Andrew Chambers
Chambers Franklyn Strata Management
E: andrew@chambersfranklyn.com.au
P: 08 9200 4200
Leave a Reply