What is a resolution?
Resolutions are enforceable decisions made by the owners corporation – and most of these are able to be made by the committee by means of a general resolution.
A resolution can either occur by a show of hands at a meeting, or by a ballot (either at the meeting, by email, by phone, or by post).
According to the Owners Corporations Act (Vic) 2006, a resolution of the committee is ‘a resolution that a majority of the members participating in a meeting of the committee or the ballot agree is a resolution of the committee’.
Where a policy is to be approved (such as an expenditure policy, or a policy to approve a certain type of window furnishing etc), a resolution noting the policy can be carried, at which point the policy is then put onto the owners corporation register.
A resolution passes if a majority of members of the committee vote in favour of the email ballot before the closing date, or the majority of members raise their hand to vote in favour of a resolution at a meeting.
Why pass resolutions, rather than simply have the chairperson provide direction to the manager?
The purpose of resolutions is to be enforceable in a court of competent jurisdiction, if challenged. As such, one of the professional services of an onwers corporation manager such as Melb OC is to draft the wording of resolutions, with the context to be directed by the committee. A chairperson providing direction to the OC Manager does not constitute a resolution, and as such will not be upheld in court.
One such example was where a committee had previously passed a resolution recommending that maintenance fund expenditure be at the discretion of the committee, rather than exactly according to a prepared maintenance plan which had been compiled by a quantitative surveyor. A few years later, a handful of disgruntled lot owners looked to launch legal proceedings because the expenditure from the maintenance fund did not align with the prepared maintenance plan, only for them to discover that the original committee resolution was legally binding. Had there been no formal resolution in place, the outcome may have been vastly different.
Ballots
Committee ballots may be conducted via email. The email must have the text of the proposed resolution, a closing date of the ballot, and state that proxies may be appointed for the ballot.
The ballot must be distributed to all members of the committee to be valid.
For more information, see Section 111 of the Owners Corporations Act (Vic) 2006.
