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Posted 06 May 2020
Category: Strata
In light of the current issues surrounding Covid-19 and the need to minimise potential exposure, prudent managing agents and committees for owners corporations are investigating means by which they can comply with their obligations to hold meetings under the Strata Schemes Management Act 2015 safely and effectively.
Please note: The below options are available under the Strata legislation, but are not all applicable to Community Schemes until commencement of the new reforms (anticipated to commence later this year).
In the current climate, managing agents want to avoid, as much as possible, the need for large gatherings, particularly owners corporation meetings.
Thankfully, a number of changes introduced with the commencement of the Strata Schemes Management Act 2015 assist in relation to new methods for participation in meetings, including:
Arranging attendance, either by video conferencing, where available, or pre-meeting electronic voting, will ensure that owners will be able to attend and vote without the need to be physically present.
There also remains the ability to have attendance by proxies made out to employees of the managing agent with express directions on how to vote.
Whatever approach is most appropriate in each circumstances, it will be important for managing agents to be clear in their communication to owners in relation to the changes in approach and the reasons for it.
We would recommend that managing agents include a note on the cover letter to the notice of meeting to explain that people are not to attend in person and that if they attempt to they will not be admitted.Ā Bannermans will be providing some template wording to its Compliance Pack members.
The strata manager can then act as the Chairperson for any meeting in accordance with their delegated functions.
The points to remember in relation to the different options are:
Regulation 14(1)(a) provides that an owners corporation or strata committee can resolve to conduct a meeting on the basis that participants may participate and vote by electronic means, such as video conferencing, teleconference or email. There would still be a physical meeting and it would otherwise be conducted in the usual way.
Clause 28 of Schedule 1 of the SSMA 2015 states in relation to general meetings:
28Ā Ā Manner of voting(1)Ā A vote at a meeting by a person entitled to vote or by a proxy must be cast in personĀ unless the owners corporation, by resolutionĀ passed at a general meeting, determines that a vote may be cast by some other specified means.
Clause 10 of Schedule 2 of the SSMA 2015 states in relation to committee meetings:
10Ā Ā Manner of voting(1)Ā A vote at a meeting by a person entitled to vote must be cast in personĀ unless the strata committee, by resolution,Ā determines that a vote may be cast by some other specified means.
The effect of clause 28 of Schedule 1 and clause 10 of Schedule 2 is to require two separate resolutions ā a committee resolution in relation to committee meetings, and an owners corporation resolution at a general meeting in relation to general meetings.
There are a number of resources that are currently available to assist in relation to attendance by a large number of attendees. Google Hangout, for instance, can accommodate 25 video connections, or 150 telephone links.
Subject to the above comments in relation to motions to adopt attendance by other means, regulation 14(1)(b) provides that an owners corporation or strata committee can resolve to make a decision, other than an election, prior to the relevant meeting by pre-meeting electronic voting.
There are a range of options, including use of a voting website, use of electronic ballot papers and voting by email. However, the legislation does impose some rules and requirements. In particular:
Regulation 41 provides that the owners corporation must retain records relating to electronic voting on motions for resolutions by an owners corporation.
Section 180 of the Act provides that these must be retained for 7 years, unless they relate to a secret ballot and do not relate to a matter concerning part 10 of the Strata Schemes Development Act 2015, in which case they need only be retained for 13 months.
Issues and Risks
While most owners will be sympathetic to the reasons for the above approach, and appreciate Managing Agents attempting to facilitate the ongoing functioning of the owners corporation, it is important to be mindful of the fact that, absent amendments to the legislation to accommodate the current circumstances, an owner could, in all circumstances except a meeting held wholly by pre-meeting electronic voting, insist on attending the general meeting in person.
While an owner may have this entitlement, in the current climate, it would appear entirely reasonable for a Managing Agent to not accommodate this, including to go so far as to refuse to permit entry to their premises in the event that they show up.
This may expose the owners corporation to proceedings under section 25 in relation to the owner complaining that they were denied their vote. It is important to note, however, that section 25 is only enlivened if the failure to allow the vote would have changed the outcomeĀ andĀ they were āimproperly denied the voteā. Even then, it is discretionary, and in the current circumstances if reasonable steps have been taken to provide alternative options, it would be anticipated that the Tribunal would be unsympathetic to the claim and may go so far as to find that the denial was not āimproperā.
***The information contained in this article is general information only and not legal advice. The currency, accuracy and completeness of this article (and its contents) should be checked by obtaining independent legal advice before you take any action or otherwise rely upon its contents in any way.