Thoughts from a strata lawyer

allisonbensonau

08 November 2016

Don’t get caught out. If you want to ensure your proxy votes are valid you should ensure your comply with the new proxy farming restrictions in the New South Wales strata reforms. Otherwise, you may be on the outside looking in and unable to vote. Be aware there are new limits on proxies, the most important of which is in schedule 1, cl 26(7) of the Strata Schemes Management Act 2016 (NSW). This clause states:

“(7) Limit on number of proxies that may be held The total number of proxies that may be held by a person (other than proxies held by the person as the co-owner of a lot) voting on a resolution are as follows:

(a) if the strata scheme has 20 lots or less, one,

(b) if the strata scheme has more than 20 lots, a number that is equal to not more than 5% of the total number of lots.”

What does this mean? Quite simply, if your strata scheme has 20 lots you can hold 1 proxy vote in addition to the vote for your lot. If your scheme has 21 lots or more it becomes a little more complicated and we have to do some mathematics as you need to calculate the number of lots in your scheme that total 5% or less.

To make it easier I have set out my calculations below and a table setting out the maximum number of proxies one person can hold:

If you have a 21 lot scheme: you can only hold 1 proxy in addition to your lot’s vote. Why? 1/21 = 4.75% so it is not more than the 5% allowed. But holding 2 proxies would not be permitted as it would exceed the 5% of total lot limit.

Essentially, you as a lot owner can hold the following proxy votes:

1-20 lots: | your vote + 1 proxy |

21-39 lots: | your vote + up to 1 proxy |

40 – 59 lots: | your vote + up to 2 proxy votes |

60 – 79 lots: | your vote + up to 3 proxy votes |

80 – 99 lots: | your vote + up to 4 proxy votes |

100 – 119 lots: | your vote + up to 5 proxy votes |

120 – 139 lots: | your vote + up to 6 proxy votes |

140 – 159 lots: | your vote + up to 7 proxy votes |

160 – 179 lots: | your vote + up to 8 proxy votes |

If you are not a lot owner you can only hold up to the maximum number of proxies, for instance, if it is a 60 lot scheme, you can hold three proxy votes.

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