Meetings and voting for scheme associations

Annual general meetings (AGMs)

Associations must have an annual general meeting (AGM) each financial year.

The AGM deals with matters that owners must consider including:

• financial statements
• insurance policies of the scheme
• election of the association committee.

The role of the chairperson at the AGM

The chairperson will follow the agenda to guide you through the meeting.

The chairperson maintains order at meetings and encourages owners to discuss items on the agenda in a fair, constructive and open manner.

The AGM agenda

The agenda for each AGM must include:

• an item to determine if a matter or types of matter must be considered by the association in a general meeting. This means matters that the committee alone cannot decide.
• for neighbourhood schemes, an item to consider any agreements for the supply of relevant utilities, for example electricity or gas
• consideration of environmental sustainability in the association (including annual energy and water consumption and expenditure).

The AGM notice

The notice of the AGM must include:

• a copy of the statements of key financial information for the association for the past year and any relevant auditor’s report
• a motion for accepting the financial statements
• a motion to consider the appointment of an auditor and taking out of insurance for buildings and structures on association property
• information about all insurance policies held by the association
• a motion to decide the number of association committee members
• a motion for the election of the association committee
• a motion to consider what commissions have been paid or are likely to be paid to a strata managing agent for the next 12 months
• a motion to decide how to deal with any overdue contributions.

Voting electronically

If you are going to vote by electronic means in a meeting in the AGM, you will need to specify this in the notice given for the meeting. See below for more information about electronic voting.

General meetings

Meetings other than the AGM are called general meetings.

These meetings are held to:

• change, cancel or make by-laws
• modify the management statement, or
• raise additional funds to cover unexpected works.

General meetings are held when necessary, throughout the year.

Convening a general meeting

The secretary or other committee member may convene a general meeting at any time throughout the year.

Eligible voters can request a general meeting as soon as practicable if they hold at least one-quarter of the total unit entitlements. They must provide written notice to the secretary or committee members to request a meeting.

Notice of general meetings

The following matters must be included – see the Community Land Management Act 2021 for details of all the terms used - with the notice for all general meetings:

• motion to confirm the minutes of the last general meeting
• motion for election of the association committee if the meeting is for that purpose
• motion for each other motion to be considered at the meeting
• indication of whether a motion requires a special resolution or a unanimous resolution to be passed
• a statement that a vote by an owner of a relevant lot does not count if a priority vote is cast for the lot in relation to the same matter
• a statement that:
  • the following cannot vote at a meeting on a motion (other than a motion requiring a unanimous resolution):
    • an unfinancial member
    • a mortgagee, or
    • a covenant chargee
  • unless they have paid the following before the meeting:
    • all contributions levied on the member
    • any other amounts recoverable from the member.
• a statement that voting or other rights may be exercised in person by:
  • an individual
  • a company nominee, or
  • proxy.
• how quorum is determined at meetings
• if the notice is given to a mortgagee or covenant chargee of a lot, provide:
  • the name of the owner of the lot
  • the address of the lot
  • the place at which the meeting is to be held.
• a copy of the minutes of the previous general meeting (if any) if the member has not previously been given a copy of the minutes, or has requested but not received a copy before the notice is given.

If requested by a member, you must also give a copy of the full financial statements of the administrative fund, capital works fund and any other funds at least two days before the meeting.

Voting electronically

If you are going to vote by electronic means in a general meeting, you will need to specify this in the notice given for the meeting. See below for more information about electronic voting.

Notice to be given for meetings

Written notice must be given to each member on the association roll.

Notice for priority votes

If a motion on the agenda allows for a priority vote, notice must be given to a first mortgagee or covenant chargee.

Priority votes may be cast for motions relating to:

• insurance
• budgeting
• a special or unanimous resolution.

Notice periods

Community association meetings

A least 21 days before the meeting if the scheme includes a precinct scheme, or 14 days if there are no precinct schemes.

Precinct association meetings

At least 14 days before the meeting

Neighbourhood association meetings

At least 7 days before a general meeting and 14 days before an annual general meeting.

Putting a motion on the agenda

Any person entitled to vote at a meeting can ask for a motion to be put on the agenda. You must give written notice to the secretary, who must put the motion on the agenda for the next general meeting.

Amending motions

Only motions on the agenda issued with the notice for a meeting can be voted on.

Motions on the agenda may be amended at the meeting and eligible voters may request a motion to be amended at the meeting.

Restrictions on amending motions via pre-meeting electronic voting

There are restrictions on amending motions if they are being determined by pre-meeting electronic voting.

Motions determined:

• wholly by pre-meeting electronic voting must not be amended at the meeting for which the voting was conducted
• partly by pre-meeting electronic voting can only be amended at the meeting for which the voting was conducted if the amendment does not change the subject matter of the motion.

If a motion will be partly decided by electronic voting before a meeting, the meeting notice must state that:

• the motion might be amended at the meeting by another motion
• the pre-meeting votes may not count if the motion is amended.

If the motion is amended during the meeting, you must include with the meeting minutes:

• a notice about the change
• a statement explaining how eligible voters can request another meeting.

Adjourning a meeting

A meeting can be adjourned (stopped and resumed at a later date) for any reason if a motion is passed at the meeting for the adjournment.

A meeting must be adjourned if there is no quorum.

The person presiding must set the time and place for the adjourned meeting. A written notice must be sent to each member of the association at least one day before the new meeting.

Voting rights at a meeting

Pre-meeting electronic voting

An association cannot rely on pre-meeting voting in lieu of a meeting. There must be a validly convened meeting in line with scheme by-laws. Pre-meeting electronic voting means voting on a matter by electronic means before the meeting at which the matter will be determined.

This means that a meeting must still be held and that a matter is not decided by a pre-meeting electronic vote but determined at the meeting. Pre-meeting electronic voting helps streamline meetings but does not replace a meeting.

An annual general meeting, any general meetings and committee meetings must be held either in person or by electronic means e.g. phone, remote video call etc.

The secretary must, at the meeting to consider the matter for which the pre-meeting electronic voting was held, inform the persons present of the result of the ballot.

The purpose of meetings is for owners to discuss and debate important matters that affect the scheme.

Holding a meeting wholly by pre-meeting electronic voting is contrary to the legislation, preventing owners discussing and debating important issues affecting their scheme.

An election must not be determined by pre-meeting electronic voting.

Community or precinct association meetings

At a meeting of a community or precinct association, voting rights can be exercised by:

• each member of the association shown on the roll or by their appointed proxy
• the proxy acting on behalf of a subsidiary body shown on the roll
• the proxy of the joint first mortgagees or joint covenant chargees shown on the roll
• a proprietor, first mortgagee or covenant chargee of a development lot shown on the roll that is not a corporation
• a proprietor, mortgagee or covenant chargee of a development lot that is a corporation.

Neighbourhood association meetings

At a meeting of a neighbourhood association, voting rights can be exercised by:

• a proprietor, first mortgagee or covenant chargee of a neighbourhood lot shown on the roll and that is not a corporation
• a proprietor, mortgagee or covenant chargee of a development lot that is a corporation - by the company nominee shown on the roll.

A member of an association cannot vote if their levies and any other money owed to an association is in arrears, except on motions requiring a unanimous resolution.

Number of members that must be present for voting

There must be a quorum at a meeting before any motion, including for election of the committee, can be voted on.

A quorum exists when, either personally or by proxy:

• at least one-quarter of the members entitled to vote are present, or
• at least one-quarter of the total unit entitlement of the scheme is represented by persons entitled to vote
• there are 2 persons present who are entitled to vote and where:
  • the association has more than one member, and
  • the quorum would otherwise be calculated as less than 2 persons.

Quorum rules

If no quorum is present within 30 minutes of a relevant motion or business arising for consideration at the meeting, the chairperson must either:

• adjourn the meeting for at least 7 days, or
• declare a quorum and go ahead with the meeting. The quorum is then the owners and proxies present who are entitled to vote.

If a quorum is not present within 30 minutes of the scheduled start time of an adjourned meeting, the meeting can go ahead with the members who are there in person or by proxy, as long as they are entitled to vote. These members are considered to make up a quorum.

Remote voting members

A person who has voted, or intends to vote, on a motion or at an election at a meeting by a permitted means other than in person is taken to be present for the purpose of determining whether there is a quorum.

Voting rights of an original owner

An original owner is a person or organisation that still owns community, precinct or neighbourhood lots after the initial period ends. If they own lots that make up 50% or more of the total unit entitlements in the scheme, the value of their vote reduces by two-thirds of their unit entitlement.

This applies to special resolutions and votes by polls where the unit entitlement is used to count the votes.

This does not apply to votes on ordinary resolutions.

The original owner is not entitled to vote, or exercise a proxy vote, on building defects in, or the rectification of building defects in, residential building works that were carried out by or on behalf of the developer.

Using electronic or virtual voting

Associations can hold meetings and vote either in person or by using electronic methods. They do not need to pass a resolution to use these methods during a meeting.

However, if an association wants to use electronic voting before a meeting (pre-meeting voting), it must first pass a resolution to allow it. Pre-meeting electronic voting cannot be used to elect the association committee.

Schemes must also comply with the following requirements if using electronic voting:

• any electronic means to be used for voting at a meeting must be specified in the notice given for the meeting, and
• the secretary of the association, or the managing agent if they have responsibility for this function, must take reasonable steps to ensure all persons entitled to take part in and vote at a meeting can do so.

Minimum reasonable steps to provide access to voting

• Provide clear and accessible instructions about how to take part in and vote at a meeting.
• Provide multiple ways for a person entitled to vote to take part in and vote at a meeting. These must include ways that do not require the person to access the internet or to incur unreasonable expenses.
• Use technology that is reasonably accessible to a person entitled to vote, and that does not require the person to pay unreasonable costs.

When a proxy can be used for voting

Appointment of a proxy is only valid if it has been made in writing on the form approved by NSW Fair Trading.

Proxies must be dated and be given to the secretary before or at the meeting.

The conditions of a proxy include:

• the proxy cannot vote if the person appointing the proxy also votes
• if the form appointing a proxy limits the manner in which the proxy may vote at a meeting, a vote by the proxy that does not observe the limitation is invalid
• the limits on the total number of proxies held by one person are:
  • one proxy vote only for schemes with 20 development or neighbourhood lots or fewer, or
  • a number that is no more than 5% of the total number of lots for schemes with more than 20 development or neighbourhood lots.

A person who owns more than one lot in a scheme may appoint a single proxy in respect of all the lots they own.

Voting restrictions on powers of attorney

Schemes with 20 development or neighbourhood lots or less

A person acting under power of attorney cannot vote at meetings for more than one owner in a scheme.

Schemes of 21 or more development or neighbourhood lots

A person acting under a power of attorney cannot vote at meetings for more than 5% of the total number of owners.

Deciding motions

The number of votes cast for or against the motion decides a motion.

Ordinary resolutions

Most decisions can be made by a simple majority vote (that is, 50% plus 1) and these are often referred to as ‘ordinary resolutions’.

The value of votes is one per person.

Special resolutions

A special resolution is approved if no more than one-quarter of the total value of the unit entitlement vote against the motion.

The value of a person’s vote depends on the unit entitlement that they hold.

Unanimous resolutions

A unanimous resolution requires no votes to be cast against the motion for it to be approved.

Out-of-order motions

The chairperson may rule that a motion is out of order if:

• a person not entitled to vote moves a motion or nominates a candidate for election to the association committee
• it conflicts with the management statement, by-laws, or would be unlawful or not enforceable if passed
• appropriate notice of the meeting was not given.

A scheme's first AGM

There are special requirements for a scheme’s first AGM. The original owner must hold the first AGM within 2 months of the end of the initial period.

A maximum penalty of $11,000 may apply if this is not done, plus $220 for each day the meeting is not held.

Notice of the AGM must be given to:

• each owner
• each first mortgagee
• each covenant chargee or tenant on the association roll.

Notice must be provided at least 14 days prior to the meeting.

What the original owner needs to provide

A maximum penalty of $11,000 may apply if this is not done, plus $220 for each day this is not done.

The original owner must provide the association with copies of:

• all documents related to the scheme:
  • plans
  • specifications
  • occupation certificates or other certificates (other than certificates of title for lots)
  • diagrams
  • depreciation schedules
  • policies of insurance
  • other related documents.
• development documents related to the scheme:
  • consents
  • complying development certificates and related endorsed plans
  • 'as built' drawings
  • compliance certificates (within the meaning of the Environmental Planning and Assessment Act 1979)
  • fire safety certificates
  • warranties obtained or received by the owner or lessor and relating to the scheme or any building, plant or equipment.
• the initial maintenance schedule
• development contracts
• service line diagrams including:
  • supply of water, gas, or electricity
  • air-conditioning ducts
  • sewerage and drainage services
  • telephone, radio or internet lines.
• the certificate of title for the association property — noting that under e-conveyancing, paper certificates of title no longer exist
• accounting records and the latest financial statement.

The original owner must provide this information either:

• at least 14 days before the first AGM, or
• not later than 3 years after the date of registration of the scheme

whichever is earlier.

The Tribunal can order an original owner to provide a document that was required to be but was not delivered to the association at its first AGM.

The agenda for the first AGM

The agenda for the first AGM must include items that:

• confirm the dollar amount of contributions to the administrative or capital works funds
• determine the number and elect members of the association’s committee
• confirm or vary the amount of insurance cover
• decide which matters are to be determined by the association in a general meeting including by-laws
• determine to extend or terminate agreements made by the original owner
• confirm the appointment of a managing agent, including their delegated functions and remuneration for the following 12 months
• confirm whether a facilities manager should be appointed and what functions they will exercise
• receive the documents required to be provided by the original owner
• include accounting records
• consider the initial maintenance schedule
• determine the embedded network provider contract
• decide whether an auditor should be appointed.