In a unit title development, the body corporate wishes to undertake major renovations to the common property that will cost $150,000. Under the Unit Titles Act 2010, what type of resolution is typically required?
Correct Answer
B) Special resolution by 75% majority
Under the Unit Titles Act 2010, major expenditure and significant alterations to common property typically require a special resolution passed by a 75% majority. This ensures substantial support for decisions that significantly impact all unit owners financially and practically.
Why This Is the Correct Answer
Under the Unit Titles Act 2010, major expenditure on common property alterations requires a special resolution passed by at least 75% of unit owners. The $150,000 cost constitutes major expenditure that significantly impacts all owners financially. Special resolutions ensure substantial community support for decisions involving large financial commitments and major changes to shared facilities, protecting unit owners from having significant expenses imposed without broad consensus while remaining practically achievable.
Why the Other Options Are Wrong
Option A: Ordinary resolution by simple majority
An ordinary resolution requiring only a simple majority (50% plus one) is insufficient for major expenditure decisions. This threshold is reserved for routine body corporate business and minor matters. Major renovations costing $150,000 require the higher threshold of a special resolution to ensure broader community support for significant financial commitments.
Option C: Unanimous resolution by all unit owners
While unanimous resolution provides maximum protection, requiring 100% agreement from all unit owners is impractical for major renovations and could allow a single owner to block necessary improvements. The Unit Titles Act 2010 recognizes this by setting the threshold at 75% for special resolutions, balancing protection with practicality.
Option D: Resolution by the body corporate committee only
The body corporate committee cannot unilaterally approve major expenditure of $150,000. Committee authority is limited to routine management decisions within approved budgets. Major renovations affecting common property and involving substantial costs require unit owner approval through the proper resolution process to ensure democratic decision-making.
Deep Analysis of This Property Law Question
This question tests understanding of decision-making thresholds in unit title developments under the Unit Titles Act 2010. The $150,000 renovation represents major expenditure that significantly impacts all unit owners financially and affects common property that belongs collectively to all owners. The Act establishes different voting thresholds based on the significance of decisions - ordinary resolutions for routine matters, special resolutions for major decisions, and unanimous consent for fundamental changes. The 75% threshold for special resolutions strikes a balance between preventing a small minority from blocking necessary improvements while ensuring substantial majority support for significant financial commitments. This protects unit owners from having major expenses imposed by a bare majority while avoiding the practical difficulties of requiring unanimous consent for all substantial decisions.
Background Knowledge for Property Law
The Unit Titles Act 2010 establishes a tiered decision-making structure for body corporates. Ordinary resolutions (simple majority) handle routine matters like approving annual budgets and appointing committee members. Special resolutions (75% majority) are required for major decisions including significant expenditure, substantial alterations to common property, and changes to body corporate rules. Unanimous resolutions are reserved for fundamental changes like subdivision or amalgamation. This structure balances democratic participation with practical governance, ensuring appropriate levels of consensus for different types of decisions while preventing minority obstruction of necessary improvements.
Memory Technique
Remember 'Major Money = 75%' - when body corporate decisions involve major expenditure or major changes to common property, think '75% special resolution'. Picture three-quarters of a dollar coin representing the 75% threshold needed for major financial decisions.
When you see questions about significant body corporate expenditure or major common property alterations, immediately think '75% special resolution'. Look for keywords like 'major', 'significant', or large dollar amounts that trigger the special resolution requirement.
Exam Tip for Property Law
For unit title questions involving substantial expenditure or major common property changes, the answer is typically 'special resolution by 75% majority'. Simple majority is for routine matters, unanimous is rarely required except for fundamental changes.
Real World Application in Property Law
A 20-unit apartment complex needs to replace the aging elevator system at a cost of $180,000. The body corporate committee identifies the need but cannot approve this expenditure alone. They must call a general meeting and propose a special resolution. The motion requires support from at least 15 of the 20 unit owners (75%) to pass. This ensures broad community support for the significant financial commitment while preventing a small group from blocking essential building maintenance.
Common Mistakes to Avoid on Property Law Questions
- •Confusing ordinary and special resolution thresholds
- •Thinking committee can approve major expenditure independently
- •Assuming unanimous consent is required for all major decisions
Related Topics & Key Terms
Key Terms:
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In a unit title development, the body corporate wishes to make alterations to the common property. Under the Unit Titles Act 2010, what type of resolution is typically required?
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