Committee decisions need to be made on a regular basis to administer the body corporate and its common property. The way in which decisions are made should reflect the priority of the matter to be considered. Factors of urgency and cost are the most common areas of determining the most appropriate method to make the decision.
In this article, we explain the different ways in which committee decisions can be made and also bust a few myths on how some decisions purported to be valid, are in fact not.
Formal committee decisions can be made in two different ways. Either at a committee meeting or by vote outside of committee meeting, called, held and recorded in the minutes in accordance with the regulations. Any other decision made that do not follow these requirements, is not a formal decision until ratified at a later meeting. Making informal decisions to then seek ratification at a later stage needs to be carefully considered, particularly if the matter is contentious or likely to be disputed as there will be no basis to act on the decision until formally recorded.
The full details on how these meetings are to be conducted can be read here. We have also summarized some of the key areas for making valid decisions including meeting notices, voting and minutes that are often forgotten when committees make decision without the guidance of a body corporate manager.
Committee meeting notices
Written notice of a meeting must be given to each committee member including non-voting members. The notice must be given at least 7 days before the meeting or at least 2 days if all voting members agree in writing or at the last meeting.
Each lot owner must be given a copy of the notice and agenda (unless they request otherwise) to the address for service of notices recorded in the roll which can be via postal address, via email or both. It must also be put on the body corporate notice board, if any.
There is no requirement under the Small Schemes Module for notice of committee meetings.
Passing the motion
A motion is passed at a committee meeting if a majority of voting members present and entitled to vote are voting in favour of the motion. If there is a tied vote, the motion is lost.
A committee member is considered present if they attend the meeting personally, by proxy or by electronic means (if authorised by the committee).
For example, if there are 7 voting members present, a majority is 4 members. If there are 6 voting members present, 4 votes will still be needed to pass a motion.
Minutes of a committee meeting
The committee must keep full and accurate minutes of each committee meeting. Full and accurate minutes include:
- date, time and place of the meeting
- names of people present and details of the capacity they attended the meeting in (e.g. a committee member or a lot owner)
- details of proxies tabled
- for motions submitted by lot owners
- when the motion was submitted to the secretary
- the name of the person who submitted it
- if the type of motion cannot be decided by the committee, the reasons it was not decided
- details of any notice given to the submitter of the motion—if the committee requires more time than the ‘decision period’ to decide the motion
- for each motion voted on at the meeting
- the wording of each motion voted on
- the results of voting, including the number of votes for and against
- details of any correspondence, reports, notices or other documents tabled
- time the meeting closed
- details of the next scheduled meeting
- secretary’s name and contact address.
The minutes of a committee meeting must be given to each lot owner within 21 days of the meeting, unless the lot owner has told the secretary in writing that they do not want to receive a copy of the minutes.
Voting outside a committee meeting
The committee can make decisions without holding a committee meeting.
To vote outside a committee meeting, the secretary (or another member of the committee authorised by the majority of voting members) must give, at the same time:
- written notice of the motion to all committee members
- notice of the motion to all lot owners.
Committee members need to return their written votes to the secretary within 21 days of the notice being given.
Committee members can contact one another before or during the vote.
There are different requirements for notice and returning votes in an emergency.
Passing the motion
The motion is decided if:
- a majority of the voting members of the committee entitled to vote on the motion (and not just a majority of those who return a vote) agree to the motion
- half or more than half of all the voting members of the committee do not agree to the motion.
If the committee members do not decide within 21 days of receiving notice, the motion will be considered ‘not passed’.
A record of the motion that was voted on must be given to all committee members and all owners within 21 days after it has been decided.
The decision about the motion must also be confirmed at the next committee meeting.
In an emergency, notice of the motion only needs to be given to those committee members that it is practical to contact.
Votes can be made verbally or by another appropriate form of communication. Advice of the motion can be given to owners when it is reasonably practical to do so.
Any motion voted on outside a committee meeting must be confirmed at the next committee meeting.
When the committee can act on its decision
A committee can act on the passed resolution only if:
- no notice of opposition is given (Standard Module only)
- there is an emergency (e.g. a burst water pipe on the common property) and the spending is within the relevant limit for committee spending or an adjudicator has authorised the committee to do so
- the resolution has been previously approved by ordinary resolution at a general meeting
- the resolution is of a routine, administrative nature and the cost is not more than the greater of $200 or $5 multiplied by the number of lots in the scheme.
Decisions the committee cannot make
The committee cannot make a decision about a motion if:
- it is a restricted issue for the committee
- it conflicts with:
- the Act or regulations
- a motion already voted on at the meeting
- it is unlawful or unenforceable
If the committee cannot make a decision about what you are wanting, they must let you know and you may have to ask for your motion to be considered at a general meeting.
You can wait until the next annual general meeting or you may ask for an extraordinary general meeting to be called.
Learn more about asking for an extraordinary general meeting.
Small Schemes Module
For schemes registered under the Small Schemes Module a committee is made up of a secretary and a treasurer. If both positions are held by 1 person, decisions are made by that person. If there are 2 people (in the secretary and treasurer positions) they must agree on any decisions.
As you can see, there is a formal process to follow to make formal decisions, and if this process isn’t followed, the decision may not be valid. If you are in doubt about the validity of decisions your committee is making, please contact our office and we will happily clarify compliance with requirements as listed within the regulations.
This article was contributed by Grant Mifsud, Partner – Archers the Strata Professionals.