Strata Refresher: Strata Owners’ Meetings [NSW] Setting it all up [the free version]

Or, getting those strata owners’ meetings underway …

It’s time for an NSW strata owners’ meeting refresher [in a few parts]. So, let’s work out when and how to set up strata owners’ meetings in New South Wales.

[7:50 minutes estimated reading time, 1459 words]

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INTRODUCTION

This is Part 1 of a series of refresher articles about strata owners’ meetings in New South Wales that cover:

• Setting up New South Wales strata owners’ meetings

• Voters and entitlements in New South Wales strata owners’ meetings

• Running New South Wales strata owners’ meetings

• Minutes & other records for New South Wales strata owners’ meetings

This article is an overview with general information and guidance. 

A detailed article covering each item more carefully and with references to applicable laws and cases is available to paying subscribers [find out more here].

TYPES OF STRATA OWNERS’ MEETINGS

General meetings

Strata owner’s meetings [called general meetings] are any kind of meeting of all strata owners [or their representatives] held to make binding decisions for the strata building.

Strata owner’s meetings are very tightly regulated under the strata laws and failing to follow correct procedures can lead to invalid meetings or decisions, disputes, and other serious consequences.

Although all meetings of strata owners are basically the same, New South Wales strata laws and strata operations have categorised them into a few different types as follows.

Inaugural general meetings

There is no reference to inaugural general meetings in the NSW strata laws.   It is just a colloquial name that has been given to the first strata owners meeting held after the strata building is created to get things underway.

First annual general meetings

This is the first mandated strata owners meeting for the strata building.

It must be convened by the developer of the strata building after the initial period for the strata building ends and there are special rules that apply to notice, agendas, and voting at the first annual general meeting. 

Annual general meetings

After the first annual general meeting, strata buildings must hold a strata owners’ meeting once in each financial year and there are also special rules that apply to notice, agendas, and voting at the annual general meeting. 

Extraordinary general meetings

There is no reference to extraordinary general meetings in the NSW strata laws.  It is just a colloquial name that has been given to strata owners’ meetings that are not the first annual general meeting, an annual general meeting, or the inaugural meeting.

Court ordered meetings

NCAT has the power to order a strata building or the secretary of the strata building to convene and hold a general meeting including the first annual general meeting if the developer doesn’t do it.  That power can extend to requiring the general meeting to consider specific matters or the agenda to include specific motions.

WHEN TO ORGANISE STRATA OWNERS’ MEETINGS

Strata owners’ meetings can only be held when required under the strata laws or after a valid trigger event has occurred as follows.

The secretary has the power to convene and notify general meetings.

The first annual general meeting

The first annual general meeting must be convened by the developer of the strata building within 2 months after the initial period for the strata building ends. 

Annual general meetings

A strata owners’ meeting must be held each year under the strata laws. 

It can be convened by the secretary under their general power to do so without any other approval since it’s mandated under the strata laws.   If a strata manager is delegated the secretary’s functions, a strata manager can convene the annual general meeting too [acting as the secretary].

Other general meetings.

Other general meetings [usually called extraordinary general meetings] are held when the following trigger events require it.

Secretary decision

The secretary can decide to hold a strata owners’ meeting.  If a strata manager is delegated the secretary’s functions, a strata manager can convene the annual general meeting too.

Strata committee decision

The strata committee can decide to hold a strata owners’ meeting.  If a strata manager is delegated the strata committee’s functions, a strata manager can convene the annual general meeting too.

Requests from strata owners

A strata owner or strata owners can request that a strata owners’ meeting is held if they have enough voting entitlements supporting the request.

Strata manager exercising delegated functions

A strata manager can decide to hold a strata owners’ meeting if the strata manager is delegated the secretary or the strata committees powers [acting as the secretary or strata committee] and makes a written record of doing so.

NCAT ordered meetings

When NCAT orders that a strata owners’ meeting is held in can also specify when and where it is to be held under its general order making powers.

WHERE, WHEN & HOW HOW TO HOLD STRATA OWNERS’ MEETINGS

Place, date & time

There are no specific controls in the NSW strata laws on where a strata owners’ meeting can be held.  So, it does not need to be at the strata building or the strata manager’s office.

There are also no specific controls on the date and time when a strata owners’ meeting can be held.  So, it can be held on during or after business hours or on a weekday, weekend, or public holiday.

Live [in person] or not

Although strata owners’ meetings have been held in person they can also be wholly or partly be held in remote ways now if the strata building decides to use an alternative way of voting for strata owners’ meetings.

That requirement for strata building approval has been relaxed during Covid 19.

Where a strata owners’ meeting is held by electronic means, a strata building can also allow strata owners and other voters to vote on most, but not all, decisions before the meeting

STRATA OWNERS’ MEETING NOTICES, AGENDAS & OTHER DOCUMENTS

General matters

A strata owners’ meeting must be notified to strata owners [and others] by providing details of the meeting, an agenda of matters to be decided, and other documents and information.

Special requirements for the first annual general meeting

There is a set of required items to be considered at the first annual general meeting but other items may also be considered at the first annual general meeting.

Special requirements for annual general meetings

There is also a set of required items to be considered at annual general meetings but other items may also be considered at annual general meetings.

Other standard items for all strata owners’ meetings

All strata owners meetings must also include the following items;

• considering the minutes of the last meeting

• anything in a strata owner’s qualified request for a motion and the accompanying explanatory note

Form of motions

The agenda for a strata owners’ meeting must specify the type of vote required for each decision; whether majority, three-quarter majority, or, unanimous.

Motions on the agenda for a strata owners meeting should be framed so that strata owners can vote Yes or No to them.  So, they should be clear about what’s being considered and the decision to be made; usually couched as proposing approval of the item.

That can be more difficult when a decision needs to be made between a range of options [like deciding between a few quotations] so that the strata building may need to choose between a few different methodologies.

Sometimes the agenda will contain conditional decisions; where one decision depends on the approval or not of another or other decisions.  In those instances, the motion should specify the conditions to voting so it is clear when it can be decided and when not.

Selecting the preferred method to deal with complex decisions is in the secretary’s discretion.

Explanatory notes

Meeting notices must also have a set of explanatory notes covering the following things:

• strata owners’ votes do not count if a priority vote is cast on the same matter,

• unfinancial strata votes can’t vote (except for unanimous vote decisions)

• that voting can be exercised in person, by a company nominee, or a proxy,

• what constitutes a quorum at meetings.

Other information & documents

Additional information and documents must also be sent with strata owners’ meeting notices including the following:

• minutes of the last strata owners’ meeting if not previously supplied,

• financial statements and reports,

• a proxy form,

• any documents that are referenced in motions, and

• other useful information to assist strata owners understand decision issues and vote.

The old strata meeting chestnut: general business

There has been a tendency for many strata buildings to also include an agenda item called ‘general business’ or to consider ‘general business’ as an opportunity to cover things that are not on the agenda.

It has been debated for decades by strata stakeholders.

But, the position is clear that whilst strata owners can discuss any issues they want at a strata owners’ meeting whether or not they are listed on the agenda unless there is a motion on the agenda covering it, decisions cannot be validly made at that meeting on the new issue/s.

October 06, 2021

Francesco …