Strata Proxy Limit – How many proxies can I hold?
Proxy farming is now a thing of the past in NSW. A new strata proxy limit came into effect on 30 November 2016.
Changes to proxy voting now prevent an individual controlling owners’ decisions at general meetings of the owners corporation.
‘Proxy Farming’ is a practice whereby an individual or a group of individuals collect votes from fellow owners who can’t or won’t attend their building general meetings (Annual or Extraordinary General Meeting). This allows the individual or group of individuals to have the majority vote over those owners that do turn up for a meeting.
Prior to November 30th 2016, proxy rules would allow one person or a small group of people to control management of a building, sometimes at the expense of most owners.
You can read the ACT here: Strata Management Act 2016 (Schedule 1, 26-7)
Strata Proxy Limit – NSW
Proxies – voting on someone’s behalf
Sometimes, an owner may delegate their voting rights to another person, who becomes their proxy.
A proxy has no effect if the person who gave the proxy attends the meeting and votes in person.
How to appoint a proxy
A valid proxy must be on the form prescribed by the Strata Schemes Management Regulations 2016.
An owner can make any person their proxy, including their tenant. Download a proxy from here.
Proxies must be given to the Secretary before or at the meeting. For large schemes, the proxy must be given to the Secretary at least 24 hours before the scheduled meeting.
The form appointing the proxy must state:
- the date on which the proxy is made
- whether the proxy can vote on all matters, or only certain matters and what those matters are, and
- how the proxy must vote on a motion for the appointment or continuation in office of a strata managing agent.
How long is a proxy valid?
A proxy is valid from:
- the date it is signed until the period specified in the proxy (if any), or
- 12 months from the date of signing or the end of the second AGM held after that date, whichever is the earlier.
Strata Proxy Limit
There are limits on the total number of proxies that can be held. The limits held by one person are:
- one proxy vote only for schemes with 20 lots or less, or
- a number that is equal to no more than 5% of the total number of lots if the scheme has more than 20 lots.
Calculating the Strata Proxy Limit
Proxy votes and material benefits
A proxy cannot be used by a building manager, strata managing agent or an on‑site residential property manager to obtain a financial or material benefit for the proxy holder. Material benefits include:
- extending their term of appointment
- increasing their remuneration
- deciding not to pursue, or to delay, legal proceedings involving the proxy holder.
- A developer or a person connected with the developer cannot make use of a proxy voting appointment or power of attorney resulting from:
- a condition in a contract for the sale of a strata lot, or
- another related contract or arrangement.
Proxy appointments before 1 August 2008
Valid proxy voting appointments or powers of attorney in place before 1 August 2008 remain in effect. However, that appointment or power is invalid if obtained through a sale contract, which has been renewed or extended on or after 1 August 2008.
You can download a proxy appointment from here.
© State of New South Wales (NSW Fair Trading). For current information on strata proxy limit go to fairtrading.gov.au