Unfinancial Owners Can’t Vote… Sometimes!
By Jennifer Paddock
You’ve probably heard that if an owner of a unit in a sectional title scheme is in arrears with his levies he is not entitled to vote. But, like all things sectional title, it’s not as simple as that…
I like the terminology used in Australia – they refer to an owner in arrears as being “unfinancial”.
What does it mean to be “unfinancial”?
It means that an owner has outstanding contributions payable to the body corporate in respect of his unit – ie. he is in arrears.
How does being unfinancial affect an owner’s voting and other rights?
- An unfinancial owner is not allowed to vote for ordinary resolutions at general meetings. An owner is always allowed to vote for special and unanimous resolutions, regardless of his financial status.
- Because the establishment of a quorum is based on the number of persons in attendance that are entitled to vote, an unfinancial owner is not counted for the purposes of establishing a quorum at a meeting where ordinary resolutions are on the agenda.
- Any mortgagee (of the unit whose owner is unfinancial) is entitled to vote as the unfinancial owner’s proxy.
- An unfinancial owner is not eligible to be nominated or elected as a trustee.
- If an owner-trustee falls into arrears, and effectively becomes unfinancial, for more than 60 days and fails to bring his arrears up to date within 7 days of being notified in writing to do so, he automatically ceases to hold office as a trustee.
If you’re looking for the relevant prescribed management rules related to the above, have a look at:
- PMR 64 – No vote in certain circumstances
- PMR 57 – Quorum
- PMR 7 – Trustee nominations
- PMR 13 – Trustee disqualifications
I hope this has been helpful.
If you have any questions or comments – write to me in the comments section below!
Image source: jonmarxism.blogspot.com