THE DEMOCRATIZATION OF PROCEEDINGS AT GENERAL MEETINGS IN STRATA TITLE OR CONDOMINIUM SCHEMES

来源 :US-China Law Review | 被引量 : 0次 | 上传用户:chyanzmr
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  In the author’s view modern cities will only remain fit for human habitation if harmony can be maintained in mixed and residential condominiums which dominate the present urban landscape. Such harmony is only possible if unit owners participate more enthusiastically in general meetings. This paper investigates whether the most important Asian, Australian, United States and other strata title or condominium statutes regulate their general meetings in such a manner that these ideals can be achieved. It will be assessed whether the quorum requirements guarantee that most owners attend; in how far the appointment of proxies affects the democratic nature of the general meeting; whether tenants and other residents must be allowed to attend and vote at general meetings; and whether the weight of an owner’s vote should be calculated according to the size of his or her unit. Finally, it will be considered unit owners should somehow be forced to attend general meetings regularly.
  The aim of this paper is to explore the social dimensions of sustainability in the context OF urban accommodation. A decent quality of life in modern cities is closely linked to the maintenance of peace and harmony in mixed and residential condominiums which are a predominant feature of the modern city environment. In the author’s view such harmony is only possible if unit owners are given a greater say in the governance of condominiums. Condominiums should preferably be governed as“residential private governments”1 or “mini-democracies”2 in which unit owners are empowered to shape the characteristics and destiny of their particular condominium. The aim of this paper is to investigate whether the Building Management Ordinance of Hong Kong3 and various strata title and condominium statutes regulate their organs of governance in such a manner
  The focus of this paper will be on the democratic nature of the proceedings of the most important governance organ of condominium schemes, namely the general meeting. Firstly, the quorum requirements of various statutes will be examined to determine whether they provide adequate guarantees that a sufficient number of unit owners will attend the meetings so that the resolutions passed at these meetings will be truly democratic. In this respect the requirements for the adjourned meeting which follows if a quorum is not present will also be scrutinized. Secondly, most condominium statutes do not require unit owners to attend general meetings in person but provide for the appointment of proxies to attend the meetings and to vote on behalf of the unit owners. The practice surrounding the appointment of proxies, and its effect on the democratic nature of decision-making at the general meeting will be investigated. Thirdly, most statutes make provision for voting at general meetings to take place either by a show of hands in which each unit is allotted one vote, or by poll in which the weight of a unit’s vote is determined by the share value or quota allocated to the unit in the constitutive documents. This means that in general the votes of owners of larger units will count more than the votes of owners of smaller units. The crucial issue here is that voting by poll may be demanded at any stage, even after the result of the voting by a show of hands has been announced. This militates against the democratic ideals envisaged for proceedings at general meetings. Finally, most condominium statutes allow only unit owners or their proxies and in some cases mortgage creditors to attend and vote at general meetings, and exclude owners who have not paid their monthly contributions or have persisted in breaching the conduct rules of the condominium. This raises two crucial questions, firstly whether the exclusion of the offending owner from governance is justified and secondly whether it would not be more democratic to allow tenants and other residents of units to attend, voice their opinions and even to vote on certain matters which are of particular concern to them.
  Having scrutinised the democratic nature of proceedings at the general meeting, it will be considered whether the realities of modern condominium living require general meetings to be functioning in a more democratic way. In this regard the question to be addressed is whether purchasers buying into condominium schemes should be educated as to the special aspects of condominium living, and somehow be forced to attend general meetings regularly.
  The introduction has outlined the purpose and focus of the paper.
  Part I assesses the democratic nature of the quorum requirements in
   fond of; to a mere aversion to attending meetings.8
  In order to ensure that business may still be conducted at a properly constituted meeting, several condominiums statutes have lowered the attendance required for a quorum. An extreme example is the Building Management Ordinance of Hong Kong9 which stipulates that an attendance by 10 percent of the total number of owners will normally constitute a quorum.10 The amended Uniform Common Interest Ownership Act (UCIOA) requires a 20 percent attendance made up of persons entitled to vote who attend the meeting in person or by proxy or who have acquired the right to vote by ballot.11 The New South Wales Strata Schemes Management Act of 199612 requires an attendance of 25 percent of the persons entitled to vote in number or value for a quorum, while the Singapore Building Maintenance and Strata Management Act of 200413 requires a 30 percent attendance for a quorum.14 The South African Sectional Titles Act15 modeled on the New South Wales Act, uniquely links the quorum requirement to the number of units in a scheme: for a scheme consisting of less than 10 units the quorum is 50 percent, for a scheme consisting of between 10 and 49 units, the quorum is 35 percent, and for a scheme consisting of more than 50 units, the quorum is 20 percent of the persons entitled to vote in person, by proxy or by means of a representative.16
  Interestingly, the various statutes calculate the quorum either by reference to the total number of owners or units in the scheme or in proportion to the share value of a unit to the aggregate of share values of all the units in the scheme. Indeed some statutes bear reference to both of these criteria. The Hong Kong Building Management Ordinance is the most democratic legislation in this regard. The quorum is calculated in terms of the number of owners present or represented without regard to the shares
   of the fact that not only do they become the owner of an apartment and the co-owner or joint owner of the common parts of the scheme (such as the soil, the roof and the staircases), but most importantly they also become part of the decision-taking structure of the scheme. Ideally they should be educated as to the communal nature of a condominium scheme and the importance of their participation in the financial and social affairs of the scheme by their regular attendance of general meetings. Besides welcome packets, every new resident should be provided with a residents’ manual setting out the role to be played by owners and residents to achieve financial stability and harmonious co-existence in the condominium.
  The importance of residents’ active participation in the management of social and financial affairs of condominiums cannot be understated. Indeed, there is a very real danger that a lack of community in condominium schemes could eventually lead to the degeneration of multi-unit buildings into uncontrolled slum areas. This in turn could not only harm the aesthetics of the urban landscape, of which multi-unit buildings form a predominant part, but could also have a knock—on effect to the detriment of local economies.
  Harmony in inner-city mixed and residential condominiums can only be attained if unit owners participate more enthusiastically in general meetings. From the above it is clear that none of the condominium legislation explored above has succeeded in achieving this goal. Instead of reducing the quorum for general meetings, higher quorum requirements should be laid down in order for the general meeting to be more representative and thus to pass resolutions in which a greater majority of unit owners have participated. The number of proxies that one person may hold must either be reduced to two or three or alternatively only specific proxies, directing the proxy on how he or she should vote on every proposed resolution must be allowed. Moreover, voting should be based on the democratic principle of “one owner, one vote” and should be based on the share value of units only if important financial interests of owners are at stake. Tenants and other non-owner residents must be recognised as an integral part of a condominium community and should be given a greater say in passing house rules for the condominium. Ultimately, owners should be educated that they are part of the management system of a condominium and that they have a duty to participate in general meetings in order to pass resolutions aimed at efficiency and achieving harmony in the condominium community.
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