Some decisions in a strata community are bigger than others. While small decisions can be made with a simple majority, major decisions need a special resolution in strata. This mechanism makes sure that critical changes have strong support from owners and keeps things fair and transparent.
In this article, we’ll cover:
- What a special resolution is
- When it is needed
- How to pass one
- Important legal points to know
- Frequently asked questions about strata special resolutions
Key Takeaways:
- A special resolution is a formal vote that requires at least 75% of votes (by lot entitlement or number) to pass.
- These resolutions are needed for high-impact decisions in the strata scheme.
- They must follow a formal process, including proper notice and clearly worded motions.
- Special resolutions can be passed at general meetings or by written ballot.
- Knowing when a special resolution is required helps owners corporations stay compliant and avoid invalid decisions.
What is a special resolution in Victoria?
In strata management, a special resolution needs approval from at least 75% of the total vote. This voting threshold guarantees that significant decisions are made with strong majority support, as required under Section 96 of the Owners Corporations Act 2006 (Victoria).
However, the way the 75% is counted depends on how the vote is done. There are two conditions for passing a special resolution:
- By a ballot or poll
- Without a ballot or poll
If a ballot or poll is used
When a vote is conducted by ballot or poll, the result is based on lot entitlements rather than a simple headcount of owners.
Each lot has a different entitlement value depending on factors like size and value. This means some owners have more voting power than others.
Example: Imagine an owners corporation with four lots, each with different lot entitlements:
| Lot | Owner | Lot Entitlement (%) |
| Lot 1 | Alice | 30% |
| Lot 2 | Bob | 25% |
| Lot 3 | Charlie | 20% |
| Lot 4 | Dana | 25% |
If a poll is conducted and Alice, Bob, and Charlie vote yes, their combined lot entitlements is 75% (30% + 25% + 20%), so the special resolution passes.
If no ballot or poll is used
In cases where a ballot or poll is not conducted, such as when a decision is made by a show of hands at a meeting, the resolution is determined based on the total number of lots, rather than their entitlements.
In this scenario, each lot gets only one vote, regardless of its entitlement value.
Example: Using the same four-lot owners corporation, if voting is done by a simple count (not by lot entitlements):
| Lot | Owner | Vote |
| Lot 1 | Alice | Yes |
| Lot 2 | Bob | Yes |
| Lot 3 | Charlie | No |
| Lot 4 | Dana | Yes |
Since 3 out of 4 lots voted Yes, this equals 75% approval.
When is a special resolution required in strata?
A special resolution in strata is needed for key decisions that greatly impact the strata scheme. These include:
- Amending or repealing existing rules, such as introducing a new pet policy.
- Approving large financial expenditures, including major renovations or structural upgrades.
- Making changes to common property, such as installing security systems or new amenities.
- Allocating or leasing common property for commercial use, such as setting up a café in a shared courtyard.
For instance, if an owners corporation decides to convert a shared garden into a playground, this requires a special resolution because it changes the use of common property and affects multiple owners.
Similarly, installing a gym in a common area would need special resolution approval, as it modifies shared property and may lead to increased maintenance costs, liability, and insurance considerations.
How to pass a special resolution in Victoria
To pass a special resolution based on the OC Act 2006, the following steps must be followed:
1. Provide notice of the meeting
A written notice must be sent to all lot owners at least 14 days in advance. The notice must include:
- The meeting’s scheduled time, date, and venue.
- The complete text of the proposed special resolution.
- Any relevant documents or details to help owners make an informed decision.
2. Conduct the meeting and vote
Lot owners can vote in person, by proxy, or through remote participation if permitted. A special resolution passes if:
- At least 75% of total entitlements vote in favor (if a poll is taken).
- At least 75% of all votes cast are in favor (if no poll is taken).
3. Consider an interim special resolution (if applicable)
If at least 50% but less than 75% vote in favor, it becomes an interim special resolution. Owners then have 29 days to object.
- If owners holding at least 25% of total lot entitlements object in writing, the resolution fails.
- If no valid objections are received within 29 days, the resolution becomes final.
How to guarantee a smooth process
Streamline your process in passing a special resolution in strata with these strategies:
- Prepare a clear agenda and include all relevant information in the meeting notice.
- Encourage attendance to make sure that quorum requirements are met.
- Maintain accurate voting records to avoid legal issues.
Legal risks of getting a special resolution wrong
Failing to follow the correct special resolution process can lead to legal disputes and challenges at the Victorian Civil and Administrative Tribunal (VCAT). Below are key considerations:
Legal implications
- Invalid resolutions: If a resolution does not meet the required voting threshold, it can be challenged in VCAT.
- Financial risks: Unauthorised expenditure or changes to common property could result in financial penalties or orders for reinstatement.
- Dispute resolution: If disagreements arise, owners can apply for mediation or legal intervention.
Issues related to a special resolution in strata can often arise when owners disagree on proposed changes or believe that proper procedures were not followed.
In such cases, mediation, internal dispute resolution processes, or an application to the VCAT can help address the concerns before escalating further.
For example, if a group of owners strongly opposes a proposed renovation that affects common property, they may challenge the resolution on the basis that proper notice was not given, or that the voting process was flawed.
VCAT can assess whether the resolution was legally valid and whether the concerns raised warrant overturning the decision. Seeking early mediation can help resolve conflicts before escalating to formal legal proceedings, saving time and costs for all parties involved.
Special resolutions can be difficult to navigate, and many Committees struggle to get them right the first time.
Speaking with a strata management consultant can help your Committee assess whether your current manager is properly supporting these decisions and support your Committee in moving forward with a better one if needed.
How to avoid legal issues
- Make sure meeting notices comply with legal requirements.
- Keep detailed voting records and meeting minutes.
- Get legal advice for complex decisions involving common property.
- Use mediation before VCAT.
When in doubt, always seek help from professionals or experts to ensure the process is handled correctly and to avoid potential legal issues.
Need help with a special resolution in your owners corporation?
Handling a special resolution in strata can be difficult, especially if the owners’ corporation or manager is unresponsive, disorganised, or not following the law. This can cause delays, disagreements, or even make decisions invalid, making it harder for owners to make vital changes in their strata scheme.
If you’re having trouble with your OC committee or manager, Strata Management Consultants is here to help. Our team of experts will guide you through the process, protect your interests, and ensure everything is managed properly and smoothly.
