The Law Handbook 2024

Chapter 6.5: Owners corporations 595 delegate (by instrument of delegation) any of its powers to the manager or to a lot owner (s 102). Under section 11(5), in the absence of delegated powers, the committee has all the powers and functions that may be exercised by the owners corporation, except in matters requiring a unanimous or special resolution. Resolutions An owners corporation may require that certain matters that are normally passed by an ordinary resolution must be dealt with only at a general meeting (s 82 OC Act). These matters are prohibited from delegation or decision by ballot. An owners corporation is no longer required to have or use a common seal (s 18A). The decision to not use a common seal must be made by ordinary resolution. Without such a resolution, the common seal of an owners corporation must not be used on a document unless authorised by the OC Act, OCRegulations, or by a resolution (s 20). A resolution is not required when the seal is applied to an owners corporation certificate (see ‘Owners corporation certificates’, below). To pass an ordinary resolution requires a majority of the votes that are available at a meeting where a quorum is present (i.e. greater than 50 per cent attendance) (s 92(2)). By special resolution (i.e. 75 per cent of the total lot entitlements of all lots affected by the OC Act (s 96(a)), an owners corporation may lease or license the whole or any part of the common property to a lot owner or other person (s 14) or obtain a lease or licence over land (e.g. for additional parking) (s 15). A special resolution is no longer required for the commencement of legal proceedings in the Magistrates’ Court or VCAT; an ordinary resolution is sufficient. A special resolution is still required to commence legal proceedings in a superior court (e.g. the County Court). Contracts and agreements can only be executed following an appropriate resolution of the owners corporation. Documents must be executed by at least two lot owners from different lots except when all lots are owned by one owner (s 10). Ballots and polls Resolutions may be conducted by ballot instead of at a meeting. The specific requirements are found in sections 83 to 86 of the OC Act. Notice of a ballot must state that the closing date of the ballot is exactly 14 days after the date of the notice. To be safe, the ballot should be sent seven days before the official written notice date. Matters requiring an ordinary resolution must be passed by a majority of the votes returned by the closing date, provided that a quorum is achieved (s 86(2)(a)). Note that a chairperson does not have a casting vote in a ballot. Voting at a meeting may be by show of hands (one vote for every lot whether the lot is an occupiable lot, a car park bay or a storage area) or in another prescribed manner (s 89(1)) or by poll based on one vote for each unit of entitlement (see ‘Voting’, below). A poll must be in writing and may be called before or immediately after a vote is taken (s 89(4,5)). OC Regulation 7B sets out the information that must be included in a voting paper. Voting papers and ballots must be retained (s 144(g)). Rules and model rules Schedule 1 of the OC Act specifies 10 categories under which the owners corporation may make rules by special resolution. An owners corporation may make rules in respect of proposed works to renovate or alter the external appearance of a lot to protect the quiet enjoyment of all other lots and the common property during those works, the structural integrity of any building on the plan of subdivision, and to ensure that the market value of any other lot does not decrease as a result of those works. An owners corporation must not make rules solely on aesthetic grounds that unreasonably prohibit the installation of sustainability items on the exterior of a lot (e.g. solar panels). An occupier of a lot (including an owner or tenant) must ensure that any invitee complies with the rules of the owners corporation. If the invitee breaches the rules, both the occupier and invitee are jointly and severally liable for any compensation or penalty. A lot owner is not liable for an invitee’s breach if the lot owner provides the invitee with a copy of the rules of the owners corporation. Rules may be made: • requiring advice to be given to occupiers about fire safety procedures and the operation of fire alarm systems;