Types of Resolutions

Types of Resolutions

Ordinary resolutions

An ordinary resolution is one passed at a properly convened meeting of the corporation by a simple majority of the votes of members present and voting on the resolution [Community Titles Act 1996 (SA) s 3]. Decisions of a corporation are made by ordinary resolution unless the Act or by-laws specify otherwise.

Special resolutions

A special resolution is required to:

change any by-law for schemes whereat least one of the lots is used or intended to be used for residential purposes [ss 12(2), 39];
change the by-laws for schemes that are commercial (in that none of the lots are used or intended to be used for residential purposes) except where the variation relates to the number of votes that may be cast in respect of each lot when a unanimous resolution is needed [ss 12(2), 39(1), 87(2)];
allow an occupier of a lot who has been given exclusive use of part of the common property under section 36(1) to erect a building or install a fixture on the part of the common property of which they have exclusive use, or alter that part of the common property in any other way [s 36(4)];
vary or end a development contract [s 50(2)];
erect a building on, or make any other improvements to (apart from establishing lawns or gardens), the common property [ss 75(3), 75(1)(c)];
remove the presiding officer, treasurer or secretary from office [s 76(7)(h)];
decide that the accounts for the corporation’s first financial year need not be audited [s 80(2)(d)];
revoke a decision that was originally required to be made by special resolution [s 89(2)];
in relation to a community strata scheme (except one solely or predominantly for non-residential purposes), authorise the erection, alteration, demolition or removal of a building, or changes to the external appearance of a building [s 102(1)]; see s 102(1a) for exceptions
authorise acquisition of property (other than a freehold or leasehold interest in land) worth less than $5 000 [s 112(3)(b); Community Titles Regulations 2011 (SA) reg 18(2)(b)];
dispose of excess funds in the administrative fund or the sinking fund [Community Titles Act 1996 (SA) s 117];
authorise expenditure about a certain amount.

Special resolutions must be proposed by at least 14 days written notice to all community lot owners, including the text of the proposed resolution and the reasons for the proposed resolution [s 3(1); Community Titles Regulations 2011 (SA) reg 2(2)].

When there are only two community lots,

When there are only two community lots then the resolution will be defeated if one of the owners votes against it. It will pass if one of the owners votes for it and the other owner either does not attend the meeting, or does attend but abstains or cannot exercise a vote because of overdue amounts payable to the corporation.

When there are three community lots

When there are three community lots and the owner of each lot is entitled to one vote, a special resolution is achieved if the resolution is passed at a properly convened meeting of the corporation at which either no vote, or only one vote, is cast against the resolution [s 88].

When there are four community lots

When there are four community lots, a special resolution is achieved if the resolution is passed at a properly convened meeting of the corporation and the number of votes (if any) cast against the resolution is 25% or less of the total number of votes that could be cast at a meeting at which all lot owners are present and entitled to vote [s 3(1)].

Special Resolution Examples

Unanimous resolutions

A unanimous resolution is achieved if the resolution is passed without any dissenting (opposing) vote; that is, nobody must vote against the resolution.

The resolution must be proposed by at least 14 days written notice to all community lot owners, including the text of the proposed resolution and the reasons for the proposed resolution [s 3(1), Community Titles Regulations 2011 (SA) reg 2(3)].

Any lot owner who does not attend (or send a proxy to vote), or attends and chooses not to vote, is not counted as a dissenting vote.

Unanimous resolutions are required to:

decide to apply to the Registrar-General to amend the schedule of lot entitlements [Community Titles Act 1996 (SA) s 21(3)];
amend the scheme description [s 31];
decide to apply for the amendment of a deposited community plan, when the corporation is the applicant [s 52(2)];
decide to apply to amalgamate with another community plan [s 60(4)];
decide to use the common property or the property of the corporation to produce income [s 75(4)(c)];
in commercial schemes (where none of the lots are used or intended to be used for residential purposes) vary the number of votes prescribed by the by-laws that may be cast in respect of each community lot [s 87(2)];
revoke a decision that was originally required to be made by unanimous resolution [s 89(1)];
decide to apply money received from an insurance claim for purposes other than making good the loss in respect of which the money was paid [s 105];
grant an easement over the common property, or consent to the extinguishment of an easement that was granted for the benefit of the common property [s 110(1)];
grant a right to occupy the whole or a part of the common property to the exclusion of all or some of the owners or occupiers of the community lots [s 111(1)];
authorise acquisition of freehold or leasehold interest in land [s 112(3)(a)];
authorise acquisition of property (other than a freehold or leasehold interest in land) worth $5 000 or more [s 112(3)(b); Community Titles Regulations 2011 (SA) reg 18(2)(a)];
determine contributions other than on the basis of lot entitlement [Community Titles Act 1996 (SA) s 114(3)];
exceed the prescribed limitation on the corporation’s expenditure [s 119, Community Titles Regulations 2011 (SA) reg 21];
in the case of a residential community scheme with not more than six community lots, decide not to have the statement of accounts for that financial year audited [Community Titles Act 1996 (SA) s 138(4)(c)].

When a unanimous or special resolution is not obtained

Where a unanimous resolution is necessary but only the votes necessary for a special or ordinary resolution are obtained, or where a special resolution is required but only an ordinary resolution is passed, then the corporation or a member of the corporation who voted for the resolution (or whose vote was cast by another person for the resolution) may apply to the Magistrates Court or the District Court to have the resolution declared sufficient to authorise the particular act proposed [s 149].

Notice of an application to convert the resolution must be served on every person who voted against the resolution, and every person who was entitled to vote but did not. The court may also order that any other person the court declares to have a sufficient interest in the proceedings be served with notice of the application. The court may direct that any such persons be joined as a party to the proceedings [s 149].

Types of Resolutions : Last Revised: Wed Sep 5th 2018
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