Body Corporate Resolutions Cheat Sheet
Types of resolutions
All body corporate decisions are taken by member resolution. There are three
different types of resolutions a body corporate can take, namely: ordinary,
special and unanimous resolutions, each of which have different requirements
and consensus levels.
The Sectional Titles Schemes Management Act of 2011 (the ‘STSM Act’) and its
prescribed rules require that some decisions be taken by special resolution,
while others require a unanimous resolution. When neither the STSM Act nor
the scheme’s rules require a special or a unanimous resolution, members take
the decision by ordinary resolution.
Two ways of taking resolutions
All types of resolutions can be taken either at a general meeting of the body
corporate, or in writing, and there are different requirements for each method
as summarised later below.
Calculating votes in ‘number’ and ‘value’
The legislation provides for two different ways of calculating votes and
specifies when one or both of these must be taken into account for the
purposes of passing a specific resolution.
In number: When votes are counted ‘in number’ each body corporate member
is counted once irrespective of the number of units they own in the scheme. [s
6(7) STSM Act]
In value: When votes are counted ‘in value’ the default position is that the votes
are calculated according to the participation quota (‘PQ’) attached to each
section. So if one person owns four sections, the PQs of those four sections
must be added together and the total will be the value of his/her vote.
However, if the developer or the body corporate has made a section 11(2) rule
that varies the effect of the PQ for the purposes of calculating vote values, then
the provisions of that rule apply instead of the PQ. [s 6(6) STSM Act]
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TYPE NOTICE QUORUM
CONSENSUS
LEVEL
Ordinary
Notice period:
At least 14 days’ written notice
must be given of every general
meeting, whether it is a special
or an annual general meeting.
[PMR 15(1)]
UNLESS the trustees have
resolved that the matter is
urgent in which case the
meeting may be called on 7
days’ notice, OR all persons
entitled to attend have agreed
in writing to a shorter notice
period, in which case it can be
called on less than 14 days’
notice. [PMR 15(7)]
Delivery of notice:
Notice must be delivered to:
1. members at their service
addresses (the default being
the address of the primary
section registered in their
name, unless they have
changed their service address
by written notice to the BC).
[PMR 15(6)(a) & PMR 4(5)]; and
2. Other persons at the most
recent address of which they
have notified the BC in writing.
[PMR 15(6)(b)]
Ordinary quorum
Schemes with less than
4 primary sections = two
thirds of the total votes
in value
Schemes with 4 or more
primary sections = one
third of the total votes
in value PROVIDED at
least two persons must
be present and the
value of the votes of the
developer must not be
taken into account for
the purposes of
establishing a quorum.
[PMR 19(2)]
Simple majority
more than 50%
of the value of
the votes cast
must support the
resolution.
Resolutions taken at a general meeting of the body corporate:
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TYPE NOTICE QUORUM CONSENSUS LEVEL
Special
Notice period:
At least 30 days’ written notice must
be given unless the scheme’s rules
specify a shorter period. [s6(2) STSM
Act]
The prescribed management rules do
provide for a shorter notice period (7
days) if the trustees consider the
situation urgent* or if all persons
entitled to attend the meeting agree in
writing it can be called on less than 14
days’ notice. [PMR 15(7)]
Notice inclusions:
The notice must specify the proposed
resolution. [s6(2) STSM Act]
Delivery of notice:
May be by hand
OR
by pre-paid registered post to
member’s section
OR
by pre-paid registered post to
member’s chosen physical/postal
address in SA. [s6(3) STSM Act]
Ordinary
quorum
as set out
above.
75% in number (each
member counted once and
therefore has one vote)
AND 75% in value of votes
must be cast in favour of
the proposed resolution. [s
1 STSM Act]
NB: If the special resolution
is passed at a meeting
where the quorum is less
than 50% of the total value
of all members in the
scheme, the special
resolution cannot be
implemented for one week
after the meeting (unless
the trustees resolve that
immediate action is
required for safety or to
prevent significant loss or
damage). If, during those 7
days members holding 25%
in value by written and
signed request require the
BC to hold a special general
meeting to reconsider the
resolution, the BC must do
so. [PMR 20(9)]
Resolutions taken at a general meeting of the body corporate:
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TYPE NOTICE QUORUM CONSENSUS LEVEL
Unanimous
Same as for special
resolution.
Increased quorum
requirement:
80% in number and
value of all BC
members must be
present or represented
to form a quorum. [s 1
STSM Act]
All members who cast their
votes must vote in favour.
HOWEVER: where the unanimous
resolution would have an
unfairly adverse effect on any
member, the resolution is not
effective unless that member
consents in writing within 7 days
from the date of the resolution.
[s 6(8) STSM Act]
Resolutions taken at a general meeting of the body corporate:
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*the trustees must not resolve to this shorter notice period in regard to a meeting referred
to in PMR 29(2) (i.e. a meeting to approve a ‘reasonably necessary’ common property
alteration or improvement by special resolution at a requisitioned meeting OR PMR 29(4) (i.e.
to authorise the installation of separate pre-paid water or electricity meters by special
resolution).
TYPE REQUIREMENT
Ordinary
The only provision that deals with the passing of an ordinary resolution
in writing is prescribed management rule 17(9) which requires all body
corporate members to waive their right to a general meeting to
consider the resolution AND for all members to consent to the
resolution writing. This means 100% of body corporate members must
waive the right to a meeting and agree to the resolution in writing for
an ordinary resolution to be taken in writing.
Special
To pass a special resolution in writing it must be agreed to in writing by
members of the body corporate holding at least 75% calculated in both
number and value. [s 1 STSM Act]
Unanimous
To pass a unanimous resolution in writing it must be agreed to in
writing by all members of the body corporate. [s 1 STSM Act]
Resolutions taken in writing (aka by ‘round robin)
by the body corporate:
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They refuse to pay to the body corporate any amount due by that member after a
court or adjudicator has given a judgment or order for payment of that amount. [PMR
20(2)(a)] Note: a member is not disenfranchised simply because they are in arrears, it
is only if legal action has successfully taken place and despite the adjudication order
or judgment the member continues to refuse to pay. Or,
A member persists in breach of any of the scheme’s conduct rules after a court or
adjudicator has ordered that the member refrain from such breach. [PMR 20(2)(b)]
Again, this disenfranchisement only applies if there is an adjudication order or
judgment in place and the member continues in breach.
Excluded Votes:
A body corporate member is not entitled to vote for ordinary resolutions if:
1.
2.
In addition, the value of the votes of any sections registered in the name of the body
corporate must be considered abstentions. [PMR 20(3)]