Everything managers need to know about voting

Contributed by Will Kenny, MAHONEY LAWYERS – 13 March 2019

Everything managers need to know about voting

When a general meeting is coming up, resident managers often ask Mahoneys how to best approach owners for their support and for general advice regarding voting procedures – particularly if the manager has proposed motions to vary their management agreement.

Given that these motions involve strict voting requirements, knowing how owners must handle their vote is of paramount importance. In this article, we address some of the most frequently asked questions.

“How can I get my owners to vote?”

It is inevitable that some owners will be complacent or disinterested in voting. This is why it is vital for the manager to lobby for their motion. Your lobbying efforts should include:

Distributing a letter explaining the benefits of the variation and why it is important for management.

Keeping in touch with off-site owners year-round to build the relationship and keep them engaged (then you know you can count on them for support).

Reaching out to your live-in owners, who are the people most likely to vote and attend the meeting.

“What are the rules around proxies and powers of attorney?”

There are a number of restrictions on the use of proxies at a general meeting. Where a motion considers new agreements or the extension of the term of agreements, proxies are not allowed.

Even where proxy votes are permitted, you may only hold up to a maximum of 5% (standard module) or 10% (accommodation module) of the total number of lots. If the motion is likely to be contested at the meeting and potentially ruled out of order by the chairperson, proxies can be used to overturn such a ruling. A manager is able to hold proxies, which can be used to vote on the motion to overturn the ruling.

On the other hand, a power of attorney has fewer legislative restrictions. An owner can appoint a person of capacity as their attorney (for example, a guardian, trustee or receiver).

One restriction is that a caretaker and body corporate manager are prohibited from being appointed as the owner’s attorney. The simplest way to overcome this is to have the owner appoint another person (such as another owner who you know will support you) as the attorney.

Although there is no specific timeframe for the owner to submit the power of attorney, the attorney must be a person on the Body Corporate’s roll. You should notify the body corporate about this as soon as practicable before the meeting takes place.

“How can I ensure secret votes are handled properly?”

A secret ballot vote is again compulsory where a motion is considered for new agreements or where the manager is seeking to extend the term of the agreements. Each owner will receive secret voting papers (usually coloured) and an accompanying envelope.

Owners may complete the voting paper, identify themselves on the envelope and either return it to the returning officer prior to the meeting or bring it to the meeting in person.

The purpose of a secret vote is to conceal the identity of the owner and avoid any potential retaliatory action because of the way a person voted.

On this point, we are often asked whether resident managers can assist owners with completing their secret voting papers. Managers can certainly assist owners with queries about how to complete the vote, but must not interfere with the vote in any way.

This includes posting the voting papers back to the returning officer or submitting them at the meeting on behalf of the owner. Such actions can lead to a vote being declared invalid. The returning officer must be someone independent of the body corporate who has an obligation not to tamper with the votes in any way and must hold the unopened envelopes until the meeting takes place.

If you are concerned about the integrity of the way the votes are handled, you are entitled to have someone scrutinise them at the meeting. Preferably that person should have some understanding of the legislation and on what basis votes can be determined invalid. If the result is a narrow margin either way, the counting of secret votes can be crucial.

When you are proposing a motion to vary your agreements, you must give it the best chance of success. Being aware of how your owners have completed their vote is one way to increase your prospects of success.