VIC: Q&As Holding Proxies and Majority Owners – Voting, Conflicts

This article contains Q&A about voting, proxies and majority owners. Are there restrictions on the number of proxy votes you can hold in Victoria? How do you deal with majority owners or developers?

Table of Contents:

• QUESTION: I’m a lot owner in a corporation of four units. Are there any instances when a strata manager, not a lot owner, has a casting vote in a tied decision? The vote was not a special resolution.
• QUESTION: Two owners corporation members are close relatives. At a quarterly owners corporation meeting, can one member vote on an issue if the relative will benefit financially?
• QUESTION: Our previously patched roof is in desperate need of repair. I’m sure the committee will choose the cheapest ‘patch job’ quote rather than the required new roof. How can I ensure the correct choice is made?
• QUESTION: The developer owns a number of storage cages that provide him with voting rights. He uses these votes to steer the committee. What can be done?
• QUESTION: How can we deal with an overbearing building manager? If there is a decision in his favour, he harangues people non-stop until they vote in his favour.
• QUESTION: If an Acting Chair’s proxy was rescinded on the day of the Special General Meeting by his Lot Owner (wife) in favour of another external legal person, is the Acting Chair still a committee member?

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Question: I’m a lot owner in a corporation of four units. Are there any instances when a strata manager, not a lot owner, has a casting vote in a tied decision? The vote was not a special resolution.

Answer: No section under the Act allows a manager to vote unless by proxy appointment.

Part 4 Division 6 of the Owners Corporation Act 2006 addresses the matters of voting in an owners corporation.

In summary – pursuant to section 87, each Lot has one vote. Pursuant to section 89A, the chairperson of the owners corporation has a second or casting vote if the vote is equal and the chairperson is a lot owner with a proxy.

No section under the Act allows a manager to vote unless by proxy appointment.

If the strata manager has been appointed by proxy, special attention to sections 120, 121 and 122 apply.

It should also be noted that pursuant to section 121 where there is no committee, the strata manager may be conferred powers and functions of the owners corporation by either the rules of the owners corporation, a resolution of the owners corporation or a delegation.

Owners corporation management is a complex matter requiring the expertise of a competent and capable strata manager to ensure judicious application of the Act, due care and diligence and unbiased guidance and governance.

Ingrid Goldenfein
OccamStrata
E: [email protected]
P: 03 7042 5659

This post appears in the October 2023 edition of The VIC Strata Magazine.

Question: Two owners corporation members are close relatives. At a quarterly owners corporation meeting, can one member vote on an issue if the relative will benefit financially?

Answer: There could be a conflict of interests to declare, and the member stands to gain an advantage.

As you mention quarterly meetings, I assume you refer to committee meetings, and my response is accordingly.

Pursuant to section 117 of the Owners Corporation Act, a member of a committee must act honestly, in good faith, with due care and diligence, as well as in the interests of the owners corporation. It goes on further to state that a member of a committee must not make improper use of their position to gain, directly or indirectly, an advantage for the member or any other person.

It could be argued that there is a conflict of interests to declare and that the member stands to gain an advantage for a person.

Ingrid Goldenfein
OccamStrata
E: [email protected]
P: 03 7042 5659

This post appears in the June 2023 edition of The VIC Strata Magazine.

Question: Our previously patched roof is in desperate need of repair. I’m sure the committee will choose the cheapest ‘patch job’ quote rather than the required new roof. How can I ensure the correct choice is made?

The roof of our strata building is in need of repair (it was previously ‘painted’ to delay repairs for up to 6 years – which has expired) and the OCC obtained 3 quotes. Two of these state how bad the roof is and that it is not up to code (for many reasons) – the quotes were within a couple of hundred dollars of one another at $70K. The other quote was for another ‘repair’/paint job at a cost of about $5K. 

To do the job properly the roof needs to be replaced and, as there is no sinking fund, a special levy will need to be called for. 

The OCC is being controlled by 3 owners who do not live in the building and who will choose the cheap option. My unit is immediately below most of the damaged roof. Is there a way to ensure the replacement option is selected (over the quick fix)? 

If the OCC chooses the cheap option and my unit is damaged as a result, can I sue both the OC and the individual members personally?

Answer: Owners Corporations make decisions based on the majority vote.

The Owners Corporation is responsible to repair and maintain the common property. If the roof is common property, the Owners Corporation (not individual members) are liable to make sure that the repair option it voted to take will last. If the roof rectification fails and you experience damage to your property, you should make a claim against the Owners Corporation.

Owners Corporations make decisions based on the majority vote. We suggest that you discuss your concerns with the other lot owners so that they could consider voting for the best roof rectification method that will last (and not just a quick fix).

Rochelle Castro
RC & Co Lawyers
E: [email protected]
P: 1300 072 626

This post appears in the May 2022 edition of The VIC Strata Magazine.

Question: The developer owns a number of storage cages that provide him with voting rights. He uses these votes to steer the committee. What can be done?

The original developer still owns a large number of storage cages. Over the last 10 years, these lots have been used as full voting rights in a pool of all separate lots be they storage, separate car space lots or actual residential lots. Is this correct?

Due to the small number of residents who vote at the AGM, it appears the developer can choose a committee thus, in effect, control decision making. The committee had 2 employees of the developer and a consultant of the Strata Manager plus a chairman that seemed to be connected to both. The developer is an investor in the strata management company.

Answer: If an owner is significantly aggrieved and is not able to enjoy their lot and the common property as a result of the decisions made by the developer’s influence, a complaint should be submitted to the owners corporation to reconsider the decisions that they have made.

The daily operation of the owners corporation is made based on a simple majority decision. With the developer owning most of the lots, it is apparent for this development that the developer’s voice will be largely heard because a simple majority decision is the only requirement. That said, if an owner is significantly aggrieved and is not able to enjoy their lot and the common property as a result of the decisions made by the developer’s influence, a complaint should be submitted to the owners corporation to reconsider the decisions that they have made.

If the owners corporation still does not act on the complaint and it is significantly impacting the owner/resident, it may be a matter to take to VCAT on the basis that the minority has been disadvantaged that requires an administrator to step in for a period of time.

Rochelle Castro
RC & Co Lawyers
E: [email protected]
P: 1300 072 626

This post appears in Strata News #565.

Question: How can we deal with an overbearing building manager? If there is a decision in his favour, he harangues people non-stop until they vote in his favour.

How can we deal with an overbearing building manager? I am an owner-occupier and we have a very domineering building manager who lives in the building. For owners corporation meetings, he petitions other lot owners to take his side.

Whenever he wants anything in the building, he is like a bulldozer. He brags he has forced people out of the building. Recently there was a building vote that was in his financial interest and he harangued people non-stop to vote in his favour. Anyone who didn’t was singled out by him with phone calls and he got quite nasty with some lot owners for not supporting him. I’m feeling stressed.

Answer: People can – and do – lobby hard for the outcomes they want at strata meetings.

It’s never good when you’re feeling in this position. That said, you are at least reaching out about it, which is a big step – perhaps the biggest step, in fact.

I’m no expert on VIC Strata law, however, as an independent strata consultant, I can comment generally and will leave that side of things to others who are. Also, I’m going to speak directly to you, in an effort to cut through. Apologies if that comes across a bit harshly.

I think your first step is removing emotive language. Strata legislation doesn’t concern itself with how people talk to you or their personalities, so you too should remove that from the equation and make this as businesslike and transactional as you can. After all, it is about the biggest transaction you’ll ever undertake – your home. Stop using words like ‘harangue’, ‘overbearing’, ‘domineering’ and ‘bulldozer’. They won’t get you anywhere, except perhaps in trouble if the person in question thinks there’s defamation happening.

In Queensland at least, and I believe it is similar elsewhere, there is no prohibition on lobbying. People can – and do – lobby hard for the outcomes they want at strata meetings. You are entitled to do that and you’re entitled to push back on those who do it to you. If you don’t like it, hang up, block the email address or opt to not speak. You are in control of all those options.

You don’t like the fact he gathers support for what he wants? Fine: do something about it. Start mounting your own campaign to your fellow owners in the most objective language possible about why they shouldn’t go along with it. In doing so, be sure you put forward your alternate position strongly and clearly. Simply running negative campaigns rarely ever works and you’re much better off being constructive with your words.

I’ll be blunt with you: feeling stressed about this is understandable, as strata issues often are, but it’s only to the extent you allow it to happen. None of what you describe is beyond your control and all of what you describe is subject to action you can take. You need to decide if you are going to be motivated to do so, remembering that unless you do so, the situation goes unchanged and unchallenged. Meaning your stress will continue.

Chris Irons
Strata Solve
E: [email protected]
P: 0419 805 898

This post appears in the March 2022 edition of The VIC Strata Magazine.

Question: If an Acting Chair’s proxy was rescinded on the day of the Special General Meeting by his Lot Owner (wife) in favour of another external legal person, is the Acting Chair still a committee member?

An Acting/Interim Chair’s proxy was rescinded on the day of the Special General Meeting by his Lot Owner (wife) in favour of another external legal person for the Special General Meeting. It is correct that the rescinded member was not a Committee member at the Special General Meeting but attended as he was given a proxy by another Lot Owner.

Is he still a Committee member and if he is, can he vote on matters unless at a General Meeting/Committee meeting till the next AGM? Was the rescind just for the Special General Meeting?

Answer: If a Committee Member has been elected by holding a proxy on behalf of a Lot owner and that same Lot owner rescinds the proxy then in my opinion the Acting Chair is no longer a Committee member.

Section 103 (2) of the Owners Corporations Act 2006 states the following:

2. The members of the committee must be lot owners or hold proxies on behalf of lot owners.

If a Committee Member has been elected by holding a proxy on behalf of a Lot owner and that same Lot owner rescinds the proxy then in my opinion the Committee Member is no longer a Committee member.

The Committee Member can only re-join the Committee if they are elected or co-opted back on.

Gregor Evans
The Knight
[email protected]
P: 03 9509 3144

This post appears in the October 2021 edition of The VIC Strata Magazine.

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Read Next:

• VIC: Q&A Voting on Motions at the Owners Corporation Meeting
• VIC: Q&A Roles and Responsibilities of the Owners Corporation Committee

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