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How Are Decisions Made in a Body Corporate?
Making decisions about common property is one of the main functions of a body corporate. Members vote on decisions at general meetings that are held at least once a year. However, if you are new to a body corporate it’s likely you’ll be unfamiliar with the terminology and processes used when it comes to decision making. To ensure you are comfortable and ready to contribute it’s a great idea to familiarise yourself with this process before you attend your first meeting.
What Terminology Do I Need to Understand?
Body corporate meetings allow members to discuss and make decisions about the property. However, body corporate terminology can be confusing for new members. Here are the key terms you need to know.
A proposal on which owners will vote is called a motion. When it is passed or carried, it is called a resolution – that is, a decision. Decisions are most often made by ordinary or special resolution, and in important cases they may be made by designated resolution.
What Are the Different Kinds of Resolutions?
The majority of decisions are made by ordinary resolution, which needs at least 50 percent of votes to pass. Decisions are made by special resolution if there is a significant effect on unit owners. Examples if matters requiring a special resolution to pass include changes to how costs are allocated to different units, which will result in ongoing changes to body corporate fees, or the borrowing of money. A special resolution needs at least 75 percent of votes to pass. Designated resolutions are used for important decisions that affect everyone in the complex. These could include decisions on the property itself (such as selling or buying common property) or matters that have a significant financial impact on the owners.
Putting the Motion to a Vote
Motions are put to a vote, and if passed the motion becomes a resolution. These resolutions must be recorded in writing.
In response to the Covid-19 pandemic, a temporary amendment was made to the Unit Titles Act 2010 to allow members of a body corporate or a body corporate committee to attend meetings by audio or audio-visual link. The amendment applies until 16 March 2021, and may be extended past this point.
Each principal unit has one vote. Voters must be over 16 years old and be a principal unit owner or their representative, or the nominee or proxy of the registered owner or their representative, or a subsidiary body corporate representative
It is worth noting that you will be unable to vote if you have unpaid levies outstanding.
Disagreeing With a Resolution
If you disagree with a resolution that has been made and you were in attendance at the meeting and voted, it is within your rights to request a poll. Each vote in a poll will be weighted according to the ownership interest. Ownership interest is based on the relative value of your unit when compared to others in your body corporate. The result of the poll will then become the resolution.
Body Corporate Committee
As well as making decisions in general meetings, the body corporate can delegate tasks to their body corporate committee. The committee makes decisions by majority vote. Committee members are principal unit owners who have been elected by members of the body corporate.
If you would like to find out more about the decision making process or body corporate meeting rules, contact our Body Corp Community Living experts on 09 968 3311 or email email@example.com.