General meetings under the new Standard Module transcript

After extensive stakeholder and community consultation, which included our input, and recommendations made by the panel on the Queensland University of Technology property law review, the body corporate and community management regulations were remade on 29 September 2020. They will come into effect on 1 March 2021.

This video explains changes relating to general meetings, we will also go over disclosure of benefits, building defect reports and administrative matters.

Topics

The following topics relate to changes regarding general meetings of the body corporate.

Submitting motions to the first AGM, documents provided for the first AGM, group of same issue motions, quorum, power of attorney, minutes and electronic voting.

A general meeting can be an annual general meeting or an extraordinary general meeting. This presentation will also include changes relating to disclosure of benefits, building defect reports and administrative matters.

Note that under the transitional provisions provided in Chapter 10 of the new Standard Module, the expiring Standard Module continues to apply for procedural steps and conduct of a general meeting called but not held before commencement of the new Standard Module.

Submitting motions for the first AGM

The first annual general meeting of the body corporate must be called by the original owner (the developer) shortly after commencement of the scheme. Under the expiring Standard Module there was no specific provision relating to owners submitting motions for the general meeting.

The new Standard Module requires that a motion submitted by a member of the body corporate before the first annual general must be included on the agenda for the meeting if it is practicable to do so. While this may result in a minor additional burden on original owners in relation to preparing materials for votes on relevant motions, it enhances protections for lot owners and promotes effective scheme governance.

Documents provided for first AGM

At the first annual general meeting, the original owner is required to give listed documents and material to the body corporate. The new Standard Module requires additional items be provided to the body corporate.

These include a copy of

• a development approval if one was required;
• the scheme’s community management statement;
• copies of documents relating to any claim made against a policy of insurance taken out by the original owner for the body corporate;
• any fire and evacuation plan required under the Fire and Emergency Services Act 1990;
• any contracts or agreements for the supply of utility services to the body corporate;
• any documents relating to warranties for: buildings or improvements forming part of scheme land; common property plant and equipment; and any other body corporate asset;
• any proxy form under which the original owner is the proxy for an owner of a lot; and
• of any document under which the original owner derives representative capacity for an owner of a lot.

The documents must be provided in hard copy and electronic form.

Group of same-issue motions

Under the expiring Standard Module, a motion with alternatives provides a way to combine original motions submitted by lot owners on the same issue into a single motion. However, the rules for deciding outcomes lack clarity, for example, what happens when the alternatives require different resolution types, such as ordinary or special resolution. Voters are also restricted to a choice of only one alternative.

Under the new Standard Module, if 2 or more motions are submitted, proposing different ways of dealing with the same issue the committee must list the original motions together on the agenda of the general meeting as a ‘group of same-issue motions’, instead of a motion with alternatives.

This flow chart shows how a group of same-issue motions is resolved.

• firstly, the motions are listed on the agenda under the title of ‘group of same-issue motions’.
• a voter casts a vote for or against one or more of the original motions.
• the votes are then counted to see if each original motion passes or fails
• if an original motion receives enough votes to pass then it becomes a qualifying motion.
• if there is only 1 qualifying motion, that motion is the decision of the body corporate.
• if there is more than 1 qualifying motion, the votes in favour of each motion are counted.
• if a motion received the highest number of votes in favour, it becomes the body corporate’s decision.
• if 2 or more motions receive equal highest number of votes in favour, the votes are counted against the motion
• if a motion receives the fewest votes against the motion, it becomes the body corporate’s decision
• if more than 1 motion receives equal highest of votes in favour and equal highest number of votes against, the decision is made by chance e.g the toss of a coin

Note that the chairperson cannot rule an original motion as part of a group of same issue motions out of order simply if another original motion is out of order. The other motions may still be considered. Also, an original motion that is an original motion in a group of same issue motions cannot be amended at the meeting.

For more information and some examples, you can view the video of our previous webinar ‘explaining group of same-issue motions’ on our website.

Explanatory schedule

In the expiring Standard Module, an explanatory schedule must be sent with the agenda for a general meeting that includes a motion with alternatives. In the new Standard Module this applies for a group of same-issue motions. The explanatory schedule must advise voters how a group of same-issue motions will be dealt with. The explanatory schedule must include specified items that are provided for in the regulation.

The explanatory schedule must include:

• the title of the group as shown on the agenda
• a list of each motion that is a part of the group
• each original motion as it was submitted
• an explanatory note about each motion given by the original submitter of the motion – not longer than 300 words
• an explanatory note stating
  • voters can vote on each motion in the group
  • votes are counted for all the motions in the group before the body corporates decision is determined
  • if a motion received the required number of votes to pass the motion qualifies to be a decision of the body corporate
  • that an original motion cannot be amended at the general meeting
  • and if no original motions receives enough votes to pass to become a qualifying motion the decision of the body corporate is that none of the original motions pass.

Quorum

Under the expiring Standard Module, a quorum is 25% of voters returning a vote and generally 2 people personally present depending on the size of the scheme. Adjudicator’s orders are often relied upon for more detail on how to calculate a quorum.

The new Standard Module clarifies how the number of voters for a meeting is calculated. The body corporate will be able to pass a motion by special resolution to change how a quorum is calculated for a general meeting. They will be able to decide to:

• reduce the number of voters required to be present in person from 2 to 1
• change the minimum percentage of voters required to vote to between 10% and 25%.

Only 1 will need to be present in person if there are fewer than 3 voters in the body corporate.

Bodies corporate are also able to decide by ordinary resolution that a person is personally present if they can cast a vote electronically at the meeting (for example, by teleconference).

This will hopefully reduce the number of adjourned meetings which is an unnecessary expense to the body corporate.

Some schemes have a lot of investor owners or owners who live interstate or overseas and are consistently struggling to achieve a quorum.

Power of Attorney

Power of Attorney farming as it is often called seems to be becoming an increasing issue for many lot owners.

The new Standard Module restricts circumstances in which a person can act as a representative of a lot owner under a power of attorney, for more than one lot. This is to prevent concentration of voting power that may impact negatively on a scheme’s collective decision making, by limiting circumstances in which a person can act as a representative of a lot under a power of attorney, for more than one lot.

Now, a person may only vote as a representative for more than 1 lot if the owner of each lot is the same person or if for each lot, the representative is a family member of the lot owner. Or the representative is a power or attorney given by a buyer under section 211 or 219 of the body corporate Act which is related to purchasing a lot.

Electronic voting

The expiring Standard Module allows the body corporate to approve electronic voting.

Under the new Standard Module more clarification has been provided. The regulation sets out that a system for receiving electronic votes can allow voters to cast electronic votes ‘live’ at the meeting. Provisions are included to allow voters to withdraw secret ballot votes made electronically. The regulation also includes additional minimum requirements for electronic voting systems.

For example, the system for receiving the votes must reject votes that are cast by a person who is not eligible to vote on the motion or who has already cast a vote on the motion, and must not allow a person other than the secretary to receive the votes.

To vote electronically the person must follow the instructions given by the secretary so that the vote is received before the general meeting or if the voting system allows, at the general meeting.

A voter can withdraw their electronic vote on a motion at any time before the result is declared. A person’s proxy cannot withdraw an owners electronic vote.

Full and accurate minutes

The new Standard Module clarifies the requirement to record reasons for ruling a motion at a general meeting out of order, by expanding the definition of full and accurate minutes to include the reasons for such rulings.

Topics – administrative matters

The topics relating to administrative matters are address for service, serving notices to owners, serving documents to the secretary, owners providing information for the roll and the body corporate updating the roll

Address for service

Under the new Standard Module, an owner can now nominate an email address to be a part of their address for service for the body corporate roll.

This assists streamlining and modernising communication in bodies corporate by enabling documents, notices or other information that may be given under the BCCM Act or regulations to be emailed to a lot owner if the lot owner has provided an email address as part of their address for service.

If an owner gives their email address to the body corporate as a part of their address for service it is taken that they have consented to being given or served by email any document or information that may be given or served on the owner under the Act.

Under the transitional provisions provided in chapter 10 of the new Standard Module, where an owner has given an email address to the body corporate for the purpose of receiving a document or information before commencement of the new module the email address is taken to be the person’s email address as part of an address for service.

Sending notices and documents

The body corporate provides many types of documents to owners, such as meeting notices, minutes, levy notices and body corporate records.

Under the expiring Standard Module, documents such as the general meeting notice are required to be sent to an owners address for service, which is a postal address. For other documents there is no specific provision on how they are supplied. For example, an owner can request body corporate records under section 205 of the BCCM Act, however the section does not specify how they are provided.

The new Standard Module allows a body corporate and the owner of a lot to enter into an agreement about how particular documents or information may be given to the owner. For example, this opens the door for bodies corporate to lawfully provide access to documents to owners via methods such as a file-sharing service, which was already becoming a regular practice.

Allowing a body corporate and an owner of a lot to enter into an agreement about how documents or information may be given to the owner makes providing and accessing information more convenient for bodies corporate and lot owners, and may also reduce associated costs.

Giving documents to the secretary

Under the expiring and new Standard Module some documents are required to be given to the secretary, for example, voting papers or nomination forms.

Under the new Standard Module, the requirement of an owner to give a document or information to the secretary is satisfied if it is given to a body corporate manager who is authorised by the body corporate to exercise some or all of the powers of the secretary under their engagement.

Owners providing information for the body corporate roll

Usually owners ask their conveyancers, solicitors or real estate agents to update the information they lawfully have to provide to the body corporate. If details for a tenancy for example are not updated quickly it reduces the body corporates capacity to enforce the by-laws. Not updating information can also cause issues relating to levy notices and meeting notices. The repercussions of this can be quite large, especially with levy notices.

Under the new Standard Module, the period to notify the body corporate of any change of details for the body corporate roll has been reduced from 2 months to 1 month. This allows the body corporate to run effectively and ensures owners and occupiers are contactable and are served all the notices required under the legislation.

Updating the body corporate roll

Under the expiring Standard Module, there is nothing that compels the body corporate to update the body corporate roll when they receive a request to update information.

Under the new Standard Module, the body corporate must update the body corporate roll within 14 days of receiving the information from the lot owner.

It could be said that updates to the roll are more likely to be actioned and less likely to be forgotten about if there is a timeframe determining when it must be done.

Note that transitional provisions in Chapter 10 of the new Standard module provide that if a notice has been given to the body corporate prior to the commencement of the new Module, the new requirement to update within 1 month does not apply, however, the body corporate must comply with the requirement as soon as practicable.

Disclosure of benefits

The new Standard Module clarifies and improves requirements for a body corporate manager or caretaking service contractor to disclose any commission, payment or other benefit they are entitled to receive that is associated with a contract the body corporate is considering entering into-including insurance.

In the new Standard Module, specifically, where a benefit is monetary, the disclosure must now include the amount of the benefit.

Under the transitional provisions in chapter 10 of the new Standard Module, disclosure requirements of the expiring Standard Module continue to apply to disclosures about commissions or benefits associated with a contract where a disclosure notice has been provided prior to commencement of the new Module, but the body corporate had not yet made a decision;

Building defect report

To encourage the early discovery of building defects in community titles schemes, the new Standard Module sets out that a body corporate is required to consider a motion proposing the engagement of an appropriately qualified person to prepare a building defect assessment report. This applies to property the body corporate must insure for full replacement value. The motion must be included on the agenda of the scheme’s second annual general meeting. An example of a property a body corporate must insure is a property under a building format plan, or properties under a standard format plan that share a common wall.

Under the new module, new provisions also allow a body corporate for a community titles scheme that contains standard format plan lots with stand-alone buildings to establish a voluntary defect assessment plan for the benefit of the owners of the relevant lots.

Under the transitional provisions provided for in Chapter 10 of the new Standard Module the new requirement for a defect assessment motion applies to schemes that have not called the relevant annual general meeting prior to commencement of the new Module. If a scheme has already called the relevant meeting prior to commencement of the new module and the meeting has not yet been held, the requirement for a defect assessment report does not apply.

You can find more information about the new regulations by visiting the shortened URL www.qld.gov.au/bodycorp-regchanges

If you have more questions you can contact our office by telephone or send us an online enquiry via our website.

You can also access resources on our website including videos of our previous webinars.