Strata schemes are structured with a democratic approach for successful community living. As part of that structure, owners vote on ordinary and special resolutions.
Ordinarily, when your strata scheme needs to make decisions, it holds a vote between eligible owners and assigned proxy voters. In this meeting, a general resolution can pass when more than 50% of owners vote in favour of a motion. And whilst a special resolution requires more of the vote to be in favour of a motion for it to pass, there are a complicated set of rules that make it more unique than a standard vote.
So what is a Special Resolution?
A special resolution s required for decisions within a strata scheme, such as adding or changing by-laws and amending rules about common property.
Special resolution motions must be proposed by giving at least 14 days' notice to all lot holders or unit owners, with detail of the terms of the proposed resolution, including a clear description, any supporting documentation and the rationale for the submission.
It is also stipulated under the Strata Titles Act
1988 (SA) and the Strata Titles Regulations 2018
(SA) that a special resolution must be passed by a properly convened meeting of the Strata Corporation. The term "properly convened meeting" refers to a meeting that is called by an authorised person such as the Secretary, any two members of the management committee, or one-fifth of the unit owners. Reasonable steps must be taken to ensure that the proposed day, time and place are convenient to a majority of the members of the Corporation. With the advent of COVID that may mean making use of electronic platforms such as Strata Vote. Online voting platforms are now commonly employed for special resolutions, as this allows the flexibility of a purely remote vote and gives a pre-voting option. Special resolutions can also be placed on your agenda for your Annual General Meeting, and dates and times for these meetings are usually set at the prior Annual General Meeting.
Why do we need a Special Resolution?
Special resolutions are needed for a variety of changes outside of general resolutions, such as changes to or adoptions of new articles of association. They are also required for a request to alter, construct, demolish or remove a building or structure and a request to authorise changes to the external appearance of the building by a unit owner.
The numbers: A special resolution is a motion passed by a properly convened meeting of the Strata Corporation in which the number of votes (if any) cast against the resolution is 25% or less of the total number of votes that could be cast, assuming all unit owners are present and entitled to vote. In other words, this type of resolution requires 75% of the vote to be in favour of a motion for it to pass.
So, if you are in a group of 4 and 1 unit owner votes against the motion, the motion will still pass as this is only 25% and not more. As per Section 88 of the Community Titles Act, and Section 3(1)(a) of the Strata Titles ActCorporations of three units, the motion would still pass if only one unit votes against the motion, despite a 33% of the vote being cast.
Example A: Request by Unit Owner to Install External Window Awning
The installation of external window treatments is an alteration of the exterior of the building and changes the appearance of the common property. Therefore, for an owner to obtain approval, it must be passed by a special resolution.
Some Corporations may take steps to implement a "blanket" approval for installing external window awnings and specify an approved colour and style, therefore negating the need for each unit to undertake its own independent request. If a blanket approval is not already in place, when proposing the motion, the owner would be required to note the windows to which they are seeking approval and
provide information on the colour, style, material and size, for example, to allow owners sufficient information to make an informed decision. At Horner Management, we always recommend that you also submit brochures of the type and colours of the awnings that you wish to install, as this will allow owners to visualise precisely what you are hoping to install, ensuring that owners are not surprised once you have approval and proceed with the installation.
In the example of a group of eight units, if three or more unit owners vote against your application, the motion will fail, and you will not be able to proceed. The Community Titles Act states that subject to any limitations imposed by the Corporation, it is the function of a management committee to carry out the tasks and perform the duties of the Corporation within the limits of the committee's powers.
Owners may discuss issues at an AGM and agree to instruct the Manager to arrange a solicitor to draft a proposed by-law addition. This clause will be circulated in a special resolution vote for owners' consideration. If the motion passes, a conveyancer will proceed with lodging the amendment at the Lands Titles Office, subsequently updating the By-Laws.
In the example of a group of 20 community titled units, if six or more vote against the motion, it will not pass. If five or fewer vote against the motion, it will pass as they are 25% or less of the total number of owners present and entitled to vote.
Example B: Proposed amendment to the Articles of By-Laws of the Corporation
At times, owners in a Community Corporation may wish to amend the Articles of a Strata Corporation or make changes to the registered by-laws of the Community Corporation. The registered by-laws of a Community Corporation are by-laws written and submitted to the Lands Titles Office when the Community is originally registered. The Articles of a Strata Corporation are also known as Schedule 3 of the Strata Titles Act, and any amendments must also be lodged with the Lands Titles Office. A special resolution will be required if a corporation wishes to alter these rules.
As by-laws for Community Corporations are usually very specific, it is not common for changes to be made; however, changes we have seen in the past tend to relate to setting limitations on what powers the Management Committee has. The most common of these changes are to the Articles of a Strata Corporation to allow fines to be imposed on unit owners for breaches of the Articles. While the Community Titles Act provides for penalties to be passed on, the Strata Titles Act does not allow for fining unless changes are made to the Articles of the Corporation (Section 19; 3a of the Strata Titles Act).
The Community Titles Act states that subject to any limitations imposed by the Corporation, it is the function of a management committee to carry out the tasks and perform the duties of the Corporation within the limits of the committee's powers.
Owners may discuss issues at an AGM and agree to instruct the Manager to arrange a solicitor to draft a proposed by-law addition. This clause will be circulated in a special
resolution vote for owners' consideration. If the motion passes, a conveyancer will proceed with lodging the amendment at the Lands Titles Office, subsequently updating the By-Laws.
Corporations of three units, the motion would still pass if only one unit votes against the motion, despite a 33% of the vote being cast.
As by-laws for Community Corporations are usually very specific, it is not common for changes to be made; however, changes we have seen in the past tend to relate to setting limitations on what powers the Management Committee has. The most common of these changes are to the Articles of a Strata Corporation to allow fines to be imposed on unit owners for breaches of the Articles. While the Community Titles Act provides for penalties to be passed on, the Strata Titles Act does not allow for fining unless changes are made to the Articles of the Corporation (Section 19; 3a of the Strata Titles Act).
The Community Titles Act states that subject to any limitations imposed by the Corporation, it is the function of a management committee to carry out the tasks and perform the duties of the Corporation within the limits of the committee's powers.
Owners may discuss issues at an AGM and agree to instruct the Manager to arrange a solicitor to draft a proposed by-law addition. This clause will be circulated in a special
resolution vote for owners' consideration. If the motion passes, a conveyancer will proceed with lodging the amendment at the Lands Titles Office, subsequently updating the By-Laws.
In the example of a group of 20 community titled units, if six or more vote against the motion, it will not pass. If five or fewer vote against the motion, it will pass as they are 25% or less of the total number of owners present and entitled to vote.
Example C: Request by Unit Owner to Construct A Rear Verandah
As in example A, an owner's request to construct a rear verandah is quite common. However, as the verandah is often located in a yard subsidiary or a unit's private garden, some owners believe this does not require strata approval, particularly if it cannot be seen from the common areas. In this scenario, whilst the rear verandah is in a yard subsidiary, Section 29 of the Strata Titles Act requires approval from owners through a special resolution, as it is still a request to alter the external appearance of the building and is also constructing a building or structure.
Information on the material, style, council approval (if already obtained), dimensions, paint colour and any other distinguishing features must be provided to owners ahead of any vote.
Again, if 25% or more of owners are against the motion, it does not pass.
If the By-laws are silent on the building of structures, then according to the Community Titles Act, owners can install a new verandah without approval as long as the structure is not attached to
common property.
Ensure that your Corporation is a Community Title and not a Strata Community Title. In Strata Community Titles, the building is considered common property. The building is not part of the common property in a Community Title. It is always best to consult with your Strata Manager to find out the boundary details of Common property.
For many owners, there can be confusion as to when a special resolution vote is required. The implications of proceeding with an external alteration without approval could result in the enforced removal by the Corporation. For these reasons, Horner Management always recommends that you speak with your Body Corporate Manager if you plan to renovate, paint, install blinds, purchase a shed, etc. You should talk with your Body Corporate Manager about what blanket approvals may already be in place and if your request needs an independent special resolution vote.
If you need advice on whether you need a special resolution, get in touch with our friendly team to find out how we can help you.
Horner Management is a multi-award-winning strata management company based in Adelaide and covering Body Corporate, Community and Strata Title plus Property Management.