Understanding Trustee Resolutions, Ordinary Resolutions, Special Resolutions, and Unanimous Resolutions in Sectional Title

Sectional Title Schemes are a popular form of property ownership, especially in urban areas. They allow individuals to own units within a building or complex while sharing ownership of common areas. Governing these Schemes involves various types of resolutions that guide decision-making processes. This article explores Trustee resolutions, ordinary resolutions, special resolutions, and unanimous resolutions in sectional title governance.

1. Trustee Resolutions

Trustee resolutions are decisions made by the Board of Trustees of a Sectional Title Scheme. The Trustees are responsible for the administration and management of the Scheme, ensuring compliance with relevant laws and the Scheme’s rules.

Key Features:

• Authority: Trustees are typically elected by the owners and have the authority to make decisions on behalf of the Body Corporate.
• Decision-Making: Resolutions can pertain to daily operations, maintenance issues or financial matters.
• Formality: While some decisions may require formal resolutions, others can be made informally, depending on the Scheme’s rules.

Example:

A Trustee resolution might involve enforcing compliance with conduct rules or deciding on contractors for repair work.

2. Ordinary Resolutions

Ordinary resolutions are decisions made by the Body Corporate during general meetings. They require a simple majority for approval.

Key Features:

• Voting Requirement: Typically, more than 50% of the votes cast must be in favour of the discussion item, for the resolution to pass.
• Scope: These resolutions often cover routine matters, such as the election of Trustees, approval of financial statements, or approval of the annual budget.

Example:

An ordinary resolution could involve approving the annual budget or electing new Trustees during the annual general meeting.

3. Special Resolutions

Special resolutions are more significant than ordinary resolutions and require a higher level of approval. They typically need a three-quarters (75%) majority of votes cast.

Key Features:

• Voting Requirement: Generally, at least 75% of the votes cast must be in favour of the discussion item. Voting on a special resolution may not take place unless a quorum of owners is present at the meeting. A quorum being 33.33% of owners represented in person or by proxy and calculated in value of votes (PQ).
• Scope: These resolutions are necessary for important changes, such as amending the conduct rules, altering the common property where deemed to be reasonably necessary, or incurring significant expenses which exceeds any restriction placed on the Trustees by the members.

Example:

A special resolution might be required to change the Scheme’s rules regarding pet ownership or approve the installation of solar equipment.

4. Unanimous Resolutions

Unanimous resolutions require the agreement of all members of the Body Corporate where the required quorum of 80% of all owners is present, in person or by proxy, and calculated by value (PQ). These are the highest level of agreement and are often used for matters that significantly impact all owners.

Key Features:

• Voting Requirement: Every owner must agree for the resolution to pass.
• Scope: These resolutions are typically reserved for critical decisions, such as selling common property or making changes that affect the ownership structure or amending management rules

Example:

A unanimous resolution may be necessary if the Body Corporate decides to sell a portion of common property to a developer.

Conclusion

Understanding the different types of resolutions in sectional title governance is essential for owners and Trustees alike. Each type of resolution serves a unique purpose and involves varying degrees of owner involvement and approval. By recognizing the distinctions among Trustee resolutions, ordinary resolutions, special resolutions, and unanimous resolutions, owners can better navigate the governance of their Sectional Title Schemes and contribute effectively to the decision-making processes that impact their community.

Author: Paul Brent (refined by AI)