We received the following question asking ‘How does proxy voting work?’ from a WA Lot Owner. Our WA Strata helper has provided the following response.
Question: How does proxy voting work in my strata council?
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Answer: In the interest of accountability it’s important that the Executive Committee alerts all people on the property of potential work.
In Western Australia our system of Strata differs from the Eastern States. The reasons are many but my favourite is that it would be impossible to retrospectively bring some older complexes of which there are many in to compliance with eastern state guidelines, without a severe backlash to whoever is the ruling Government of the day.
Instead we have been given the “Duty of Care” clause which lays all responsibility at the feet of individual owners to act in a proper manner and not necessarily delegate that responsibility to others via proxy unless clear instruction is given on how to vote on individual agenda items.
Ultimately the buck will stop with you if anything goes wrong. In strata there is always recourse which unfortunately comes down to an individuals tenacity and funding to pursue the matter if felt wronged.
The wild wild west has relied heavily on owners to take an active interest and to do the right thing. This may not be the case with overseas investors and or investors who do not live at the complex or even in the state and who choose to supply their proxy to a 3rd party or not participate at all, believing that owner occupiers would not want to increase levies either so there is a reasonable chance of no negative impact.
In a meeting, many hands can be hard work but one person having 20 votes can create hard work after the meeting.
We are not all the same with our thinking or agendas. This can lead to a number of strategies being employed when proxies are required.
An individual owning 20 or 30 units at a complex will have 20 votes. This will give him or her the majority vote in all matters. The Strata Titles Act protects you by insisting that compliance to the law is still required as this cannot be voted down.
How does proxy voting work in Western Australia?
Proxy Farming is the underbelly of commercial considerations by others. So, how does proxy voting work here in Western Australia? I knew of a case where the Real Estate Agent/Strata Manager was charging owners/investors who he requested a Proxy made to him and charged $110 for each proxy for his service.
Section 50 of the Act talks about an individual with proxy/proxies not being able to vote on contractual matters that would directly benefit him/her or an associate.
As Strata Managers, if we are smart we resolve this by including on the proxy a “tick Box” section that indicates the proxy votes yes to the Strata Management contract.
Currently there is no limit on the amount of proxies held by an individual, and the majority of proxies go to the Strata Manager or the Chairperson of the Meeting (usually the Strata Manager) or the Chairperson of the Strata Company (very seldom) as owners do not know who else to give it to.
The Strata Titles Act is alive and constantly open to change through interpretation and precedents are set everyday.
Other grey areas with Proxies;
- Do you have to be financial to nominate someone or yourself? I don’t think so.
- Do you have to financial to accept a nomination? I don’t think so.
- If the result is drawn between candidates and a ballot is called for can the un-financial owner who nominated himself or someone else vote? I don’t think so.
Below is Schedule 1 by-law 14 for your reading.
SCHEDULE 1. By-Law 14
VOTES OF PROPRIETORS
14. (1) On a show of hands each proprietor has one vote.
(2) On a poll the proprietors have the same number of votes as the unit entitlements of their respective lots.
(3) On a show of hands or on a poll votes may be given either personally or by duly appointed proxy.
(4) An instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney and may be either general or for a particular meeting.
(5) A proxy need not be a proprietor.
(6) Except in cases where by or under the Act a unanimous resolution is required, no proprietor is entitled to vote at any general meeting unless all contributions payable in respect of his lot have been duly paid and any other monies recoverable under the Act by the strata company from him at the date of the notice given to proprietors of the meeting have been duly paid before the commencement of the meeting.
(7) Co‑proprietors may vote by proxy jointly appointed by them and in the absence of such a proxy are not entitled to vote on a show of hands, except when the unanimous resolution of proprietors is required by the Act.
(8) On any poll each co‑proprietor is entitled to such part of the vote applicable to a lot as is proportionate to his interest in the lot.
(9) The joint proxy (if any) on a poll has a vote proportionate to the interests in the lot of such of the joint proprietors as do not vote personally or by individual proxy.
The rules in the west may fall within the guidelines but still aren’t right. We have the State Administrative Tribunal (SAT), where grey items can be cleared up as SAT can make a ruling not consistence with the Act.
There is a section of law called “Fraud on the Minority” that can apply to strata if some unscrupulous person decides to take a majority share in the Strata Complex and then imposes his will to further benefit himself. Things done at your strata must comply with guidelines set out in the Strata Titles Act 1985. (The Yellow Bible).
People generally are not bad, possibly just insensitive and opportunistic.
Read more about How does proxy voting work:
- NSW: Q&A How Do I Use Proxy Voting Forms?
- SA: Q&A How Should a Strata Manager Use His Proxy Votes at AGMs?
All advice is my general opinion only and specialised advice should be sort if you intend on taking any affirmative action.
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