In Victoria, an Owners’ Corporation (OC) – previously known as a Body Corporate prior to the inception of the Owners’ Corporations Act 2006 (Vic) (The Act);– is a legal entity capable of suing and being sued. As with all corporations, an OC is governed by and subjected to relevant legislative instruments, rules and regulations. In this article, we briefly explore the different types of voting provisions (resolutions) an OC may need to satisfy before actioning a decision.
First, the primary instruments that regulate Resolution Provisions for OCs in Victoria are:
- Owners’ Corporations Act 2006 (Vic) (The Act);
- Owners’ Corporations Regulations 2018 (Vic) (The Regs); and
- Model Rules or the OC’s Rules (The Rules).
Although these are the primary instruments, it is important to understand that additional legislative instruments may also identify specific resolution provisions. However, in this instance we will refer to the above instruments only.
What is an Ordinary Resolution?
An Ordinary Resolution is a decision that is reached by the OC on matters that do not require a Special or Unanimous Resolution. This means that the matter must be a matter or issue that can be voted on ordinarily and requires a combined majority of returned votes to succeed (i.e. 50%+).
Some examples of when an ordinary resolution may apply are (subject to conditions):
- Making a decision to borrow money;
- Payments from a maintenance fund; or
- Additional Insurance.
What is a Special Resolution?
A Special Resolution is a decision where the returned votes on a matter is 75% or more but does not require a unanimous decision on the issue.
Some examples of when a special resolution may apply are (subject to conditions):
- Leasing of common property (the common property remains as is and in its original state);
- Upgrade or make significant alterations to the common property; or
- To make, change or revoke rules.
What is an Interim Special Resolution?
Subject to certain conditions, an Interim Special Resolution occurs when the votes or ballot on a special resolution issue, return a percentage ratio of all votes returned consisting of a percentage of 50% or more of the return votes in favour of the motion and 25% against. This means that despite there not being 100% return votes on the issue, so long as from all of the return votes the percentage is as above, the matter may be considered to be an Interim Special Resolution.
What is a Unanimous Resolution?
A unanimous resolution under The Act is one that requires 100% of the return votes on the matter, to be in favour. The Act itself provides a limited scope on when a unanimous resolution is required. For instance, it identifies that a unanimous resolution is required on matters relating to no common property existing and for each lot owner to arrange for their own insurance. However, such limitation paves the way for other legislation relevant to a matter to stipulate when a unanimous resolution may be required.
If you are an Owners’ Corporation and need advice on your matter, contact Midwinter Lawyers today.
