This article discusses the rules, best practices, and legal considerations surrounding committee voting in Victoria, focusing on how owners corporations can conduct elections under the current legislation.
Question: What is the voting process for electing owners to a committee in Victoria?
What are the rules and any precedents about the method used to elect an owners committee? Does the law require postal voting, or can the election be conducted only by in-person voting? Can owners corporations (OC) use online or electronic voting for committee elections?
When using a ballot, does the ballot paper need to list all candidates in a particular order, and is a specific voting system required, such as preferential voting or first past the post? Finally, is block or group voting permitted, where an owner votes for a slate of candidates rather than for individuals one by one?
Answer: Currently, the situation isn’t clearly spelled out in a linear fashion.
That’s a really interesting question and one that featured heavily in various submissions to the state government’s review panel into the Owners Corporation Act 2006 (the Act). Currently, the situation isn’t clearly spelled out in a linear fashion and is pieced together.
The groundwork for committee elections is contained within Part 4 of the Act under section 100 and 103;
100 Election of committee
- An owners corporation affecting 10 or more lots must elect a committee at each annual general meeting.
- An owners corporation affecting less than 10 lots may elect a committee at an annual general meeting.
103 Membership of committees
- Subject to this Act and the regulations, the members of the committee hold office from their election until a new committee is elected.
- The owners corporation may at an annual general meeting or special general meeting resolve to add or remove a committee member or replace or remove a committee.
In effect, a new committee (which may have some or all of the same members) must be elected at each AGM. In between, the OC can convene a SGM to further change the membership per s103(6). So, it comes down to a vote of the OC, which in theory should be simple enough. Except that the Act doesn’t specify particularly well just HOW to conduct an OC vote.
Section 87 says that for any resolution, it is one vote for each lot, whether at a meeting or by ballot. So far, so good. Section 89 covers ‘Voting on a resolution of the owners corporation at a meeting’. And section 89(3) contains the somewhat infamous ‘poll’ voting, meaning a requirement that voting is based on one vote for each unit of lot entitlement (which generally but always re-aligns voting-power to an equivalent of lot liabilities and whomever pays more, has more voting power – if and when liabilities and entitlements are equal), and polls must be by written vote.
But again, ‘how’ do we vote?
Section 89(1) states that:
- Subject to subsection (3), a person may vote on a resolution of the owners corporation at a meeting by a show of hands or in another prescribed manner, unless the meeting resolves otherwise.
So, now we are voting with hands, or in some other ‘prescribed manner’ (of which there is none listed), which still leaves these questions (to list just a few);
- Are we voting on everyone standing for the committee as a block or individually?
- What if we have more nominees than committee positions?
- Is it first past the vote? Preferential? Is a majority even required?
- What about abstentions?
- How should the ballot be filled?
Here’s the framework I suggest;
- The voting must be at a meeting per 103(6), not by postal ballot.
- Owners who cannot attend either in person or online/teleconference (permitted by s89(6) ) can submit a proxy with instructions for their proxy-holder on who to vote for, IF that person is nominated.
- Nominations can be received before or during the meeting, but NOT after the vote. If someone misses the nomination window and the actual vote, they can’t be on the committee without a further election or a casual vacancy.
- e.g. the successfully elected nominees cannot decide after the meeting to ‘let’ someone on just because they forgot or didn’t know.
- The OC motion to elect committee members can take two forms;
- Block – i.e. ‘That the owners corporation elects A, B, C and D to the committee of management until the next committee election or annual general meeting, whichever is first’. Clean, simple, and probably representative of more than 95% of committee elections.
- One at a time – i.e. each owner’s nomination is voted upon individually via either a show of hands or by a written ballot.
- Ideally, the manager will be prepared for the possibility of a ballot.
- Generally, the owners nominating should be listed either alphabetically or in ascending lot number order.
- Again, this is not covered in the Act, so ‘first nominated, first served’ is probably ‘safe’ insofar as the validity of the Act is concerned.
- The ballot needs three boxes against each nominee’s name: Yes, No, and Abstain. And this is where it gets messy.
- An abstention means that the total number of voters on that resolution has been reduced to the Yes and No votes. Equally, if someone doesn’t tick Y/N, we take it as an abstention.
- Voters elected to the committee are those who receive more Yes votes than No votes. E.g. 5 Yes, 2 No, 2 Abstentions – this is a vote of 5 to 2 in favour. If they don’t receive more votes in favour than against, the resolution to elect THEM specifically has not passed.
OR
But, there is a sizeable gap in the Act – what to do when there is an equal number of votes? What if it’s a tie between these two voting results for the last two spots: 5 Yes, 2 No, 2 Abstentions, and 3 Yes, 0 No, 6 Abstentions. My own view in this instance – and yes, this has happened – is that 5 Yes’s trumps 3 Yes’s, even if the ‘margin of victory’ is similar, and that the owner receiving 5 Yes votes would be successful.
There is a way around this, practically speaking. The owner in the room can request that the ballot be a poll vote. This will likely dissolve any concerns over a tie, as it is less likely for votes to be tied when counting entitlements rather than hands in the air. If the OC has previously resolved for 12 positions, and 13 nominees receive a ‘winning vote’, we currently don’t have a clear direction on whether ‘most yes votes’ or ‘biggest margin’ wins out. This would need to be determined and resolved before the vote. The example above could be 5 in favour, 2 against, and another candidate has 4 in favour, 5 abstentions. If all other candidates were 9 votes in favour, who gets the last spot? Either argument could be made, but it needs to be finalised and passed by the owners attending BEFORE the vote.
Regardless of poll vs by hands, the minutes should respectfully reflect who was voted onto the committee, and the OC (usually the manager) will be required to hold the voting records for one year, per the Act. In theory, you could use preferential voting as well. How/why? Because the format of voting is simply not covered to a practical effect within the Act. Electronic voting is certainly permitted, and any owner can attend online.
As I noted earlier, unless and until the Act is amended, we are working with ‘best practice’ within the very few statutory provisions at hand. This is what I would regard as ‘definite’;
- Voting at a meeting.
- Financial/paid up owners only.
- By hands or by poll.
- Voting either for a block of owners together, or one by one, is permitted.
And after that, it’s just a little bit Wild West – (1) Subject to subsection (3), a person may vote on a resolution of the OC at a meeting by a show of hands or in another prescribed manner, unless the meeting resolves otherwise.
To NOT get caught out, it’s usually a good idea to reach out to your manager in advance for their advice and practice.
Alex McCormick SOCM alex@socm.com.au P: 03 9495 0005
This post appears in Strata News #772.
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Read next:- VIC: Q&A Owners denied voting rights for ‘unpaid charges’ they never authorised
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- VIC: Owners Corporations Blog- Voting at Meetings- Ordinary Resolutions
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