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Proxies and powers of attorney – where and when

By Frank Higginson19 Nov 2012

The rights of third parties to represent owners at meetings (whether committee or general) is heavily regulated under the BCCM Act.

We are regularly asked to advise on these sorts of issues.  Here are some of the more common issues that people are not necessarily aware of:

Committee meetings

  • The secretary or treasurer cannot appoint a proxy without committee approval;
  • Proxies can only be given by a committee member for two meetings for each year of their appointment;
  • A proxy does not have continuing effect – it must be given for each meeting;
  • A body corporate manager or resident manager cannot hold a proxy – their non-voting limitations continue to apply irrespective of who they may be voting for;
  • Proxies cannot be used at principal body corporate committee meeting level (these will be where the ‘member’ of the body corporate is a subsidiary body corporate); and
  • A voting committee member can only hold one proxy at a time.

General meetings

  • The proxy for a general meeting can be anyone – it doesn’t need to be a lot owner;
  • There are limitations on proxies – under the Accommodation Module proxies for up to 10% of lots can be held by the one person.  Under the Standard Module it is 5% of lots;
  • If there are less than 20 lots then a member is only allowed to hold one proxy, however, that limitation does not apply to schemes regulated by the Commercial Module;
  • A body corporate can limit proxy use absolutely – otherwise there are certain statutory limitations (as examples they cannot be used to vote on management rights agreements);
  • A proxy  can be continuing (i.e. for more than one general meeting) – but otherwise must be renewed every year; and
  • Proxies cannot be used at principal body corporate general meeting level (these will be where the ‘member’ of the body corporate is a subsidiary body corporate).

Powers of attorney

  • Powers of attorney to developers / the ‘original owner’ are limited to 12 months and are also limited to what is actually in the power of attorney that was disclosed to the purchaser of the lot;
  • Otherwise powers of attorney can be for longer terms but are still limited to what is actually in the power of attorney itself.  If this an enduring power of attorney, then the attorney can basically vote for anything put to the body corporate.

The big sleeper with powers of attorney with developers is that their drafting can be simply from a form document by the developer’s lawyer.  What the developer can do under that power of attorney is limited to that – and it might not be everything the developer wants to do!

If a developer does exercise their rights to vote under a power of attorney it is important for strata managers to keep a copy of the power of attorney and attempt to confirm that the vote was properly cast. If you are unsure you should seek legal advice immediately.

If you would like further information click here.

Contact: Frank Higginson, Director
Email: frank.higginson@hyneslegal.com.au