Unanimous resolutions in sectional title schemes are essential for making significant decisions by the body corporate. Therefore, it is crucial to adhere to the proper procedures. Different types of resolutions demand varying levels of consensus depending on how much the decision impacts the members’ financial interests. Generally, the greater the financial effect on members, the higher the consensus required. In upcoming articles, I will explore the various resolution types: unanimous resolutions, ordinary resolutions, and special resolutions.
How to Obtain a Sectional Title Unanimous Resolution
A unanimous resolution, as defined in section 1 of the Sectional Titles Schemes Management Act 8 of 2011 (the “STSM Act”), means a decision passed with full agreement of all members either by:
- Being approved unanimously at a meeting where at least 80% (by value and number) of members’ votes are present or represented, and all votes cast are in favor; or
- Reaching a written agreement among all members.
Notice Requirements for Unanimous Resolutions
Section 6(2) of the STSM Act mandates that at least 30 days’ written notice must be given if a unanimous resolution is on the meeting agenda, unless the scheme’s rules allow for shorter notice. Additionally, prescribed management rule 15(3)(b) stipulates that the notice should include either a copy or a detailed summary of any document to be discussed or approved during the meeting.
Quorum for Unanimous Resolutions
For resolutions made at an Annual General Meeting (AGM), the quorum must be at least 80% in both value and number of members’ votes present or represented.
Decisions Requiring a Unanimous Resolution
The following are decisions that necessitate a unanimous resolution:
- Authorizing the body corporate to sell or lease all or part of the common property (Section 5(1)(a)).
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- Amending or repealing management rules (Section 10(2)(a)) and creating rights of exclusive use within these rules (Sections 10(7) and (8)).
- Deciding on compensation distribution for expropriated common property (Section 12(2)(a)).
- Declaring buildings destroyed (Section 17(1)(b)) and decisions related to rebuilding or transferring interests after destruction (Section 17(3)(a)).
- Approving improvements or alterations to the common property that are not strictly necessary (PMR 29(1)).
- Authorizing loans from the body corporate’s funds (PMR 21(2)(a)).
Decisions Requiring Written Member Consent
Some decisions demand written approval from all members, along with additional consent in certain cases:- Purchasing land to expand the scheme’s common property (Section 26).
- Exercising or ceding future development rights, requiring consent from mortgagees as well (Section 5(1)(b)).
- Allowing a section or exclusive use area to be used for a different purpose than indicated on the plan (Section 13(1)(g)).
Procedures When Unanimous Consent Cannot Be Achieved
In situations where obtaining unanimous agreement is challenging, Section 6(9) of the STSM Act provides a remedy. It allows the body corporate or an individual owner to seek relief from the chief ombud if they cannot secure a unanimous resolution.Approving the extension of the developer’s future development rights (Section 5(1)(c)).Requesting the delineation and transfer of exclusive use rights to owners (Section 5(1)(e)).