When Is a Special Resolution Required For Strata Corporations?

Owners of strata-titled properties each have a stake in the condition and future of the building. This means any major change to common property or the strata arrangement that affects all owners cannot be made without a consensus. As such some proposed changes will require a special resolution of the Strata Corporation.

What Is a Special Resolution?

A special resolution in a strata community involves members of the Strata Corporation to vote for their support or opposition to a major change to the strata scheme.

A written notification of the special resolution must be sent to all lot owners at least 14 days in advance. This written notification must clearly outline the time and date of the meeting, as well as the terms of the proposed resolution.

What Is the Criteria for a Special Resolution to Be Passed?

For a special resolution to be passed, there must be more votes in favour than against AND no more than 25% of the total number of lots against the proposed resolution. 

This requirement is in accordance with the Strata Titles Act 1988 (SA) and the Community Titles Act 1996 (SA). Outside of South Australia, other states have similar though not identical special resolution requirements.  

Owners with more than one lot will be able to cast votes equal to the number owned.

In South Australia, there is an exception to the 75% minimum regarding special resolutions for strata schemes involving two or three lots. In the case of two lots, both unit holders must vote in favour for a special resolution to be passed. In strata schemes with three lots, a special resolution can only pass if no more than one vote is cast against the resolution.

When Is a Special Resolution Required in Strata?

A special resolution is required for major decisions that affect the entire property and all owners. These include: 

• Changes or additions to strata articles (by-laws) – common changes to strata articles cover the allowance of pets in units, the use of common property and building facilities, and general rules of conduct for residents. Amending the articles to permit a business to operate from a lot is another common example.
• Major construction, alterations, or demolition work – includes changes to the facade of the building e.g. for a unit renovation that changes the shape of the balcony.
• Strata finances – in the case of community tile, authorising expenditure of the community-title fund of equal to or more than $2,000 per lot, but less than $5,000 per lot
• Previous special resolutions – cancelling a decision that was previously made via special resolution. 

There are also some decisions that require an even higher resolution, called a Unanimous Resolution.

Can the Outcome of a Special Resolution Be Challenged?

If there is an insufficient number of votes for a special resolution to be achieved, the Strata Corporation or representative member of the corporation can apply to the Magistrates Court or the District Court for the voting result to be declared sufficient for a special resolution. This is provided that the failure to pass the special resolution is wrongful, unreasonable, oppressive or unjust. 

To ensure that a special resolution has the best chance of being achieved, the Strata Corporation should take steps to communicate the proposed decision clearly to all owners. Strata management services can work on behalf of the Strata Corporation to ensure that each owner is well-informed of the proposed outcome and the voting process. Strata managers can also handle any disputes that arise throughout the process to minimise disruptions to the ideal outcome. 

As the leading strata management company in South Australia, Strata Data has over four decades of award-winning experience in helping strata communities thrive. We can provide your strata community with advice on when a special resolution is required and facilitate the entire process. Get in touch with our team for more information.