By Ané de Klerk
The vast majority of the decisions made in a sectional titles schemes management context are made by ordinary resolution. This means that, most of the time, it is only members’ vote values that are important and the participation quotas of those members voting that matter. However, this does not mean that the number of votes cast are never important and understanding how a vote in number works is vital. One of the key types of resolutions with an element of counting votes by number is a Special Resolution.
Special Resolutions are required to authorise some of the body corporate’s most important action-items, such as the repeal and replacement of its Conduct Rules, the installation of pre-payment water and/or electricity meters and the extension of a section. These types of resolutions can be passed at general meetings or in writing and in both instances both the value and the number of votes cast in favor of the resolution are relevant, with a 75% threshold having to be met for each. In this article we will take a closer look at exactly how votes in number are calculated for this purpose.
I recently assisted a client that lives in a sectional titles scheme consisting of 28 units. He approached me because he was upset that the body corporate had purportedly passed a special resolution to authorise the amendment of rules in a manner that he found unreasonable. Upon taking a closer look at the voting results, I ascertained that the vote value requirement had been met. The first of two boxes was therefore ticked, but I also found that the trustees had deemed the resolution, which was circulated in writing, a success because 21 of the 28 units had voted in favour thereof. This means 75% of the units voted in favor of the resolution. But, the amount of units that vote in favour of a proposed special resolution is not relevant. It is not the amount of units that vote in favour of the resolution that matters, but the amount of members.
In this case, two of the members who voted in favour of the resolution owned multiple units (with one owning three and another owning two units). The body corporate therefore consisted of only 25 members at the time that the resolution was proposed. As only 18 of those members cast their votes in favour of the resolution, only 72% in number voted in favour of the amendment of the Conduct Rules, the second box was in fact not ticked and the resolution did not pass.
This practical example shows the importance of understanding a key concept, that when it comes to counting votes in number, it is the number of members, not the number of units, that is relevant.
For this reason, trustees must ensure that they have an updated copy of a list of members in the scheme when they present special resolutions for members’ consideration (whether at a meeting or via round robin). If they believe that members may not have notified them about units being sold, bought or bequeathed (despite owners being required by law to do so) they should download a copy of the registered owners in the scheme from a platform such as Windeed on the day that the resolution is proposed – thereby ensuring it is the most updated version. Such a list, indicating the number of members in the scheme, is a vital tool for counting a vote in number and one cannot ascertain whether a proposed special resolution has in fact passed without it.
Interested to learn more about different types of resolutions and how to calculate their outcomes correctly? You may find our UCT Sectional Titles Schemes Management online short course interesting. Read more about it here: UCT Sectional Titles Schemes Management online short course
Specialist Community Scheme Attorney (BA, LLB), Ané de Klerk, is a Director of The Advisory, a boutique consultancy specialising exclusively in community schemes law. Her focus is legal education, which includes presenting seminars and running online and in-person training programs and courses. You can reach out to her via email at info@theadvisory.co.za to request an obligation-free quotation for assistance with ensuring that resolutions have been correctly passed in your sectional title scheme.
