Want to tweak a rule in your Owners Corporation? You’re not the only one that’d like to do so. Maybe you want to change a rule regarding parking, pets, short-stay visitors, or who can access the rooftop. Regardless of what your needs are, you need to go about it the right way under Victorian law.
Any person that skips a step while modifying rules runs a risk of them being disobeyed once passed. Let’s take you through the correct process in this guide.
First Things First: What Counts as a Rule?
Not every rule is valid. The law says there’s a select list of topics an Owners Corporation can actually make rules about. This includes things such as common property use, noise, garbage disposal, pets, short-stay visitors, and what a building looks like.
If a rule doesn’t fall under the topics we just listed, it won’t be able to stand. So, before you draft any rule change, check to make sure it won’t be watered down when passed.
The Need for Special Resolution
This is the part so many people misconstrue. You can’t just change a rule because several hands went up during a meeting.
According to Victorian law, a rule change can only go through if it has a special resolution.
This means at least 75% of all votes must agree to the rule change. It doesn’t apply to only those present. It applies to the total votes across the entire Owners Corporation.
75% might seem like a high bar. In reality, it is. But it’s that way because it prevents a small cluster of loud individuals from forcing their own agenda. It also stops rules from being unfair and rushed.
In light of all these, you need to be sure you’ve got the numbers before calling a vote. If you don’t get your 75%, you might need to use the backup tagged interim special resolution.
It states that if 50% of voters vote YES and less than 25% vote NO, the change can still happen. But it’ll need to sit for 29 days, enough time for any owner to state their reservations. If there aren’t any objections, the rule will become a full-blown special resolution.
How to Get Votes
There are two major channels for getting a vote. The first is at a general meeting, where owners can cast their vote in person or through a proxy. Keep in mind that a special resolution can’t be raised from the floor on the day. The proposed rule change must be included in the notice of meeting sent to owners beforehand.
The other way is by running a ballot, where owners can vote in writing and don’t have to head to any physical location.
Regardless of which medium you use, you need to ensure that owners are notified in advance. For a ballot, you need to inform them at least 14 days before voting ends.
Your notice shouldn’t be vague and should include the exact wording of the rule or rule change you’re proposing. That way, owners can make an informed decision.
How Long Does It Take?
Most owners ask us this question. Everything, from start to finish, can take anywhere from six to 10 weeks. This includes the time you’d need to draft the rule or rule change, notify other owners, set a ballot or meeting, and lodge the rule with the Registrar if there aren’t any objections.
Outside this timeline, you’ve got to know that there will be another 29 days on it if you go the interim special resolution route. So, if you want a summer void of distractions, it’s vital that you start the process early.
And remember, rushing to create a rule doesn’t end well, as it could have loopholes that might not sit right with owners. So, while time is of the essence, be diligent.
Don’t Forget to Lodge It
Many committees miss this step. Getting 75% of votes doesn’t mean the rule will automatically go live. It has to be lodged with the Registrar before taking effect. If you skip this, that rule becomes a mere suggestion.
We Can Be of Service
Is your committee thinking about changing a rule or making a new one? Don’t get the jitters just yet, as we can talk you through the entire process. We’ll check if the rule can pass, get its phrasing right, and make sure it’s lodged the right way. Contact our team and we’ll take it from there.
