New Legislation - Resolutions Part Two
March 25, 2022 | BY Bellbuoy
Unanimous Resolution
In our previous blog, we defined special resolutions and detailed in what types of instances these would be required. We will now proceed to do the same with unanimous resolutions, as well as highlight when unanimous consent is required, which is different to a unanimous resolution.
The STSMA section 1 defines a unanimous resolution. While the requirement that abstentions in general meetings are regarded as a yes vote has been removed, this does not have much of an effect on the outcome, as unanimity is only required from those votes cast.
A unanimous resolution is therefore –
(a) passed unanimously by all the members of the body corporate in a meeting at which – (i) at least 80% calculated both in value and in number, of the votes of all the members of a body corporate are present or represented; and (ii) all the members who cast their votes do so in favour of the resolution; or
(b) agreed to in writing by all the members of the body corporate.
STSMA 6(8) states that where the unanimous resolution would have an unfairly adverse effect on any member, the resolution is not effective unless that member consents in writing within seven days from the date of the resolution. Here the time period of 7 days is new, as well as the terminology that changed from protecting the proprietary rights and powers of owners to instead safeguarding against any unfairly adverse effect on owners – thereby broadening the protection offered. The Ombud would have to be approached by either the owner or the body corporate to affirm any unfairly adverse effect. Below we have listed some examples of when a unanimous resolution would be required, versus for example unanimous consent.
Matters requiring unanimous resolution
| 1) STSMA 5(1)(a) | proceed with the alienation of common property or enter into a long term lease, however the written consent of any holder of a right of extension must also be obtained. (revised) |
| 2) STSMA 5(1)(c) | enter into a notarial agreement to extend the period of a right of extension of the scheme as contemplated in STA 25(1). |
| 3) STSMA 5(1)(e) | delineation and cession of EU rights ito STA 27(2). |
| 4) STSMA 10(2)(a) | management rules may be substituted, amended, added or repealed by unanimous resolution. Provided that in terms of regulation 6(6) no addition, amendment or repeal may happen until there are owners other than the developer of at least 30% of the scheme save where schemes were approved in terms of STA, 1971. |
| 5) STSMA 12(2)(a) | distribution of compensation moneys from expropriation of CP where not by PQ or in terms of order from CSOS. (revised) |
| 6) PMR 29(1) | improvements or alterations to common property that are not reasonably necessary. (revised) |
| 7) STSMA 17(1)(b) | building deemed to be destroyed when so determined by unanimous resolution of owners and written agreement of all holders of mortgage bonds and persons with registered real rights. |
Matters requiring unanimous consent of owners and / or mortgagees
| 1) STSMA 5(1)(b) | the written consent of owners and mortgagees is required to exercise or cede a right of extension of the scheme by the addition of sections, provided that the owner/mortgagee may not withhold permission without good cause in law. |
| 2) STSMA 13(1)(g) | to change the purpose for which a section or EUA may be used requires the written consent of all owners. Any owner may make application to the Ombud within 6 weeks of any refusal in terms of STSMA 13(2). (revised) |
| 3) PMR 17(2) | if all members waive their right to attend an AGM in writing before or within 1 month from financial year-end and in writing agree to all resolutions there is no need to hold the AGM. Similarly PMR 17(9), same applies to SGM. (new) |
In part three of our blog on resolutions we will look at notice and quorum requirements at general meetings when special or unanimous resolutions are tabled, as well as what relief is available to members and bodies corporates.
S Moore-Barnes
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