The aim of this article is to explain how a typical strata meeting, such as an Annual General Meeting (AGM) or Extraordinary General Meeting (EGM) is run.
Please note: this article does not reflect the NSW Strata Schemes Management Act 2015 which came into effect on 30 November 2016. It is based on the NSW Strata Schemes Management Act 1996. Please use this article for information only, and check with your strata manager to ensure you comply with the most up-to-date legislation and requirements.
To make the best of each meeting, all owners are encouraged to attend any meeting in person and participate in the affairs of their Owners Corporation. In this way you will have the opportunity to contribute to the preservation and enhancement of the value of your unit.
Strata Meeting Notice & Proxy Form
If you cannot attend the meeting and wish to cast a vote, we recommend that you fax or post a proxy form to your strata manager. A proxy form enables an owner to appoint another person as your representative at an owners corporation meeting, in case one is not able to attend in person.
You can download a proxy form from our website here. You should read the statutory information carefully to ensure you understand the circumstances in which you will be entitled to vote at the meeting.
Please note that if your building contains more than 100 residential lots (excluding utility lots), your proxy must be received by the Secretary of the Executive Committee, or Strata Manager at least 24 hours before the start of the meeting.
If you have any questions about your meeting notice, the financial report or your entitlement to vote we strongly suggest you contact your strata managing agent prior to the meeting. This will help ensure the meeting runs as smooth as possible and avoids delays.
Voting instructions for the Annual General meeting (AGM)
You can exercise your voting rights at the meeting in person or by proxy. If you are a corporation your voting rights may be exercised only by your company nominee in person, or by proxy appointed by the corporation.
You or your company nominee cannot vote on a motion for an ordinary or special resolution unless the following amounts have been paid before the meeting:
- all contributions levied by the Owners Corporation that are payable at the date of the notice; and
- any other money that is recoverable by the Owners Corporation from you at the date of the notice.
If you are an owner, you cannot vote if a vote is cast by:
- the mortgagee shown on the strata roll for your lot;
- the covenant charge shown on the strata roll for your lot; or
- in the case of multiple mortgagees or covenant charges – the priority mortgagee or charge shown on the strata roll for your lot.
Determining a Quorum for your meeting
A motion submitted at a General Meeting of an Owners Corporation cannot be considered, and an election of new committee members cannot be held, unless there is a quorum present to consider and vote on the motion or on the election.
There is a quorum for considering and voting on such a motion or at such an election if:
- at least one quarter of the number of persons entitled to vote on the motion or at the election is present, either personally or by appointed proxy; or
- at least one quarter of the aggregate unit entitlement of the Strata Scheme is represented by the person who are present and entitled to vote on the motion or at the meeting
- Should a quorum not be present within the next half-hour after the relevant motion or business arises for consideration at the meeting, the meeting stands adjourned for at least 7 days.
What are typical Strata Meeting motions?
The below example motions are typically for Annual General Meetings. They provide you with an idea of which motions you can expect on the agenda for your building. The wording of a motion is of importance. An incorrectly worded motion and subsequent vote could be declared invalid if it is not worded correctly and or properly setting out the intentions of the motion.
To aid the reader, each motion is in blue text with further clarification text below the relevant motion in italics. Use of Capitals is intentional.
Minutes of Previous General Meeting
THAT the minutes of the last General meeting of the Owner’s Corporation be confirmed as a true and accurate record.
Adoption of Financial Statements
THAT the financial statements for the last financial year a copy of which accompanied the notice of this meeting be adopted.
Typically, general financial queries cannot be answered at the meeting due to time constraints. It is generally requested that queries should be referred to your Strata Manager prior to the meeting.
Confirmation of Insurance
THAT all Owners Corporation insurance currently in force be confirmed as appropriate and adequate.
Having appropriate insurance cover for your building is of the utmost importance, and this and subsequent motions ensures that all owners are comfortable that the insurance cover is sufficient for their building.
Office Bearers Liability & Fidelity Guarantee Insurance
THAT the Owners Corporation confirms the following additional insurance that are currently in place and decide if they should be adjusted.
a) Cover for executive committee members for office bearers liability insurance as provided in section 88(2) (a) of the Strata Schemes Management Act 1996 (“the Act”; and
b) Insurance of the kind referred to in section 88 (2) (b) to cover against misappropriation of money or other property of the Owners Corporation
THAT the Owners Corporation authorise and instruct the Managing Agent to obtain on behalf of the Owners Corporation a building valuation or update thereof.
An up-to-date building variation is important in ensuring that the building is insured for the appropriate amount. For example, in case of destruction of the building following a fire you want to be sure that the insurance company will pay out sufficient funds to repair or rebuild the building.
Appointment of an Auditor
THAT the Owners Corporation appoint an auditor for the current financial year.
An independent auditor ensures that all financial records are accurate and reliable.
Election of Executive Committee
THAT an election of the Executive Committee be conducted and the number of executive committee members for the coming year be set.
No Strata Plan functions without the volunteers who run the day-to-day operations and interact with the strata manager. The Executive Committee is elected at each Annual General Meeting. It can have up to nine (9) members and once elected, decides who is to hold the office bearers positions of Chairperson, Secretary & Treasurer as required under Section 18 of the Strata Schemes Management Act 1996. One person may be appointed to more than one office under this section.
Restrictions on Powers of Executive Committee
THAT for the purpose of Section 21(2) (b) of the Act, the meeting consider and determine the types of matters, if any, that are to be decided only by the Owners Corporation in general meeting.
This enables the owners to restrict the authority of the Executive Committee beyond what the legislation already restricts the committee. You could choose to limit the maximum amount of repairs the EC can approve before they have to convene an Extraordinary General Meeting to obtain approval. For example, it makes sense to allow the EC to approve basic repairs and maintenance, however significant repairs should be taken to an EGM for approval by the majority of owners. This helps streamline the daily operations.
Adoption of Budget & Raising of Levies
a) In accordance with section 75(1) and (2) of the Act the Owners Corporation estimates that in respect of the determined period it will need to credit to its administrative and sinking funds for actual and expected expenditure referred to in those subsections the amounts set out in the budget that was attached to the notice of the meeting at which this resolution was passed; and
b) In accordance with section 76(1) of the Act, the Owners Corporation determines that the following amounts are to be levied to raise the estimated contributions:
i. To the administrative fund, the sum of $ xxxxx and
ii. to the sinking fund, the sum of $ xxxxx and
c) those amounts are to be paid by regular periodic installments on the first day of [insert month]
d) THAT the levy installment due [insert date] for both the Administrative and Sinking fund be payable quarterly until re-determined by the Owners Corporation and such figure shall be
- Administrative Fund $xxx per quarter
- Sinking Fund $xxx per quarter
e) THAT all contributions be levied by notice from the Treasurer of the Owners Corporation in accordance with section 78 of the Act.
Your strata manager will typically prepare a budget for the new year based on prior year actual spend and expected or planned spend in the new year. The total amount for the year is divided by the unit entitlements. To read more about Unit Entitlements, please refer to this article we wrote previously.
THAT The Owners – Strata Plan 12345 RESOLVE pursuant to the Act including section 80 D, for the purpose of collecting or recovering levy contributions to authorise the Strata Managing Agent and/or the Executive Committee to do any one or more of the following:
a) To engage or appoint the services of a debt collection agency, obtain legal advice and or retain legal representation on behalf of the owners Strata Plan 12345
b) To commence, pursue, continue or defend any court, tribunal or any other proceedings against any lot owner, mortgagee in possession and/or former lot owner in relation to all matters
c) arising out of the recovery of levy contributions and the recovery of other debts, including penalties, interest, legal and other costs:
d) Enforce any judgment obtained in the collection of levy contributions including commencing and maintaining bankruptcy of winding up proceedings.
e) Filing an appeal or defending an appeal against any judgment concerning the collection of levy contributions and
f) Liaise, instruct and prepare all matters with the Owners Corporation’s debt collection agents, lawyers and experts in relation to any levy recovery proceedings.
To help ensure sufficient funds are collected to run the building, one needs to ensure the levies due are collected in a timely manner. This motion enables the strata managing agent to chase up any moneys due and if required engage the services of a debt collection agency to retrieve the funds. This is imperative for cash flow purposes.
Sinking Fund Plan
THAT a consultant be appointed to assess the actual and expected sinking fund requirements in accordance with section 75(2) of the Act.
It is a legal requirement to perform a Sinking Fund Plan. The purpose of a Sinking Fund Forecast is to estimate future expenses generally over a 10 year period, such as significant maintenance works. This in turn will help you put funds aside each year to help pay towards these major works when they are due. It also helps owners to get an idea of what maintenance is required and when, in order to keep the value of your investment. It could prevent long discussions on whether certain work is really a requirement, and instead you can focus on when the works should be started.
Work Health & Safety Act 2011
THAT the Owners Corporation acknowledge the Work Health and Safety Act 2011 and Regulations and RESOLVE to:
a. As required, consult, confer, allow inspections and provide assistance (and/or documents) on any matter so far as is reasonably practicable, on work health and safety matters under the Work Health and Safety Act 2011 and Regulations with its agents, employees or contractors or any health and safety representative for its agents, employees or contractors,
b. As required, prepare and maintain any register or document reasonably required (including an asbestos register if so required) under the Work Health and Safety Act 2011 and Regulations and make such register or document available to its agents, employees or contractors or any health and safety representative for its agents, employees or contractors.
c. Engage a contractor to carry out a Safety Report as the preliminary process in compliance with the Work Health and Safety Act 2011.
It is important that your building complies with the relevant WH&S regulations. Engaging a specialist to prepare a Safety Audit will help ensure your building complies and is a safe place to work for owners, their guests and the contractors your building might engage with.
Notification to Land Property & Information
THAT pursuant to Section 239 of the Act 1996 Premium Strata Pty Ltd be authorised to notify the Land Property & Information Office of the Owners Corporation change address for service of notices to be care of Premium Strata Pty Limited.
This motion is applicable when you have recently engaged the services of Premium Strata. It is important that the registered address for your scheme is properly recorded with the Land Property & Information
Many more motions could be added to an agenda, the exact contents and wording depend on the issues at hand, however the above are typical motions you will find on your AGM agenda to be considered annually by an Owners Corporation. If you find certain motions missing or incomplete, you should ask your strata managing agent. It might be time to change agents!
As always, if you have any questions, please do not hesitate to contact our friendly strata managers. We will be happy to assist you!
We hope you found this little guide useful. Please keep your eyes open for future articles, as we will continue to work towards making the somewhat complex world of strata management just that little bit easier to understand.