Updates to the Strata Schemes Management Act: Sustainability and Voting

Commercial, Property

On the 24th February 2021 the Strata Schemes Management Act was amended, introducing reforms focused on facilitating sustainability resolutions in Strata Schemes, simplifying proxy voting, and protecting the privacy of secret ballots.

Sustainability Infrastructure

The amendment introduced a special focus on developing sustainability infrastructure in Strata Schemes, through introducing Sustainability Infrastructure Resolutions. In essence, these are ordinary Owners Corporation resolutions that are concerned with financing sustainability infrastructure, adding, or altering common property for the purpose of installing sustainability infrastructure and changing the by-laws to support sustainability infrastructure.

The amendment to the Act defines sustainability infrastructure as being changes to common property, be it additions, subtractions, or installation of new structures, that aims to improve the sustainability of the Strata Scheme. The purposes that qualify such changes as sustainability infrastructure are listed in the Act as infrastructures that:

  1. Reduce consumption of energy or water
  2. Reduce pollution. emissions and waste
  3. Increase recovery or recycling; and
  4. Facilitate the use of sustainable forms of transport (e.g. electric vehicles)

Before approving any sustainability infrastructure resolutions, the Owners Corporation is required to consider the following:

  1. Running and maintenance costs of such infrastructure
  2. To what lots the infrastructure will be available; and
  3. An entity who will own, maintain, and install the infrastructure.

Ordinarily for a Strata Scheme’s resolution to pass it must have not more than 25% of cast votes to be in opposition, however this requirement has been lowered concerning sustainability infrastructure resolutions.

Instead, such a resolution now only requires less than 50% of cast votes to be in opposition to pass. The reduced requirement reflects efforts to encourage sustainability in relation to Strata Schemes.

Proxy Voting

Under the Act, a person may only hold one proxy vote where the Strata Scheme has total 20 lots in the Strata Scheme or less, or can hold a maximum of 5% of the total number of lots where the total number of lots in the Strata Scheme exceeds 20 lots. Despite these restrictions the amendment to the Act now allows a person who owns more than one lot in the Strata Scheme to assign a single proxy in respect of all those lots.

For large scale Strata Schemes, this is a welcoming change which will simplify the voting process and add efficiency that was lacking before as previously the Strata Scheme’s records were convoluted by an owner of multiple lots having to assign multiple proxies.

Secret Ballots

Previously under the Act, the owners, mortgagees or covenant charge of a lot, or any person authorised by such people, were able to request to inspect records of the Owners Corporation.

Under the amended Act, the Owners Corporation is now prohibited from making any record available that would reveal how an owner voted in a secret ballot, although a Court or tribunal may still direct the Owners Corporation to reveal such documents.