Monday, July 4, 2022

Proxy Limit Victoria – how many proxy votes can I hold?

Proxy Limit Victoria

In Victoria, the amount of proxies one person can hold at an owners corporation meeting is currently unlimited. This is under review.

The Victorian Owners Corporations Act 2006 places some limitations on the practice of ‘proxy farming’. For example, a person is prohibited from requiring or demanding that a lot owner give that person, or any other person, a power of attorney or a proxy.

Read more: Proxy Limits NSW & QLD

When does a proxy lapse?

Where a lot owner appoints a proxy to vote on their behalf, the proxy lapses after a period of 12 months where an earlier period is not specified.

Appointing a Proxy

If you cannot attend a meeting, you can appoint a trusted person to represent you. This person ‘holds your proxy’ and their vote is counted as yours.

You may authorise a person in writing to act as your proxy to:

  • attend, speak or vote on your behalf at an owners corporation meeting
  • vote on your behalf in a ballot
  • represent you on the owners corporation committee.

To nominate a proxy, you must complete the prescribed Owners corporation proxy (Word, 54KB) and deliver it to the owners corporation secretary.

Voting by Proxy – owners corporation managers

As a manager, you must be aware of restrictions which apply to you when voting by proxy at a ballot or general meeting on contracts of appointment or reappointment:

  • you (or any other person) cannot require a lot owner to give you a proxy
  • you must act honestly, in good faith and exercise due care and diligence when voting by proxy
  • you cannot vote on matters affecting your delegation, appointment, payment or removal if you are not a lot owner
  • your contract is voidable unless it is affirmed by the owners corporation by a special resolution if you vote as a proxy on your contract of appointment.

The legislation also requires that a proxy:

You must comply with the restrictions on voting by proxy and advise lot owners of the requirements for voting by proxy.

Proxy Limit Victoria – Under Review

Option 9A of the review of the owners corporation act is to restrict proxy farming and committee proxies, and prohibit voting limitations in sale contracts.

Under this option:

  • the total number of proxies that could be held by a person voting on a general resolution would be –
    • one, if there are 20 or less lots in total, and
    • 5 per cent of the lots, if there are more than 20 lots in total
  • committee members would only be able to give a proxy to another committee member, and
  • terms in contracts of sale that limit or control the voting rights of the buyer would be prohibited.

This option seeks to address the issue of proxy farming in a way that does not eliminate the practical advantages of proxies, and in a way that recognises the different nature of small and large owners corporations. However, it still allows for a degree of proxy farming while reducing the capacity to get resolutions passed.

© Consumer Affairs Victoria. For current information go to Consumer Affairs website

Disclaimer: All information provided on this website is intended as a guide only and should not be substituted for proper legal advice. Seek professional legal advice before taking any action.

Strataville Editorial
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