The black ball usually applies to clubs. In many, a single black ball cast in a ballot would be enough to exclude a prospective new member.
The equivalent of the black ball is still around in unit (or strata) title legislation. Its effect came to light in the ACT Magistrates Court last week.
The legislation enables just one unit holder to veto proposals that might affect the common property. No reasons have to be given.
And in NSW the redevelopment plans of majorities in some old blocks of units are being blocked by single or small minorities. This week the NSW Property Council urged some changes.
The ACT case was about the request of a unit owner in O’Connor to install a split system air-conditioner. The unit owner’s daughter who has a chronic pain complaint lives in the unit. Even temperatures help her complaint. Some of the drugs she takes for her condition require her to avoid very cold or very hot conditions.
But the air-conditioner would have required a box to be placed outside, on the common property. Under the Unit Titles Act any use of any common property for the use of one unit holder requires an “unopposed” resolution. It means any single unit owner in the block can block the proposal.
Incidentally, in the ACT unit title can apply to single level developments with as few as two units. About 40,000 people live under unit title in the ACT.
The unit owner appealed to the Magistrates Court.
Magistrate John Burns held that the legislation did not allow for a review on the merits or on the reasonableness of the objection.
The only ground for reversing an opposed proposal is if “the proposal is in the objective best interests of all the unit holders”. It means that the court would have to find that the unit owner blocking the proposal had voted against their own best interests. On that reasoning it might require that the opposing unit holder was – at least in economic terms – off the planet. The magistrate did not hold that in this case.
Indeed. We will never know why the air-conditioning system was opposed. The opposing postal ballots were kept secret by the executive committee on the grounds of privacy. That, of course, meant it was not possible for the air-conditioning proponents to approach the opponents to persuade them to change their minds. So the case went to court with the proponents suing the body corporate.
Overall, the legislation tries to avoid a tyranny of the majority by requiring more than simple majorities for certain actions.
For example, unanimous resolutions (everyone actively agreeing) are required to sell the whole block as a single property. Unopposed resolutions (no-one actively disagreeing) are required for changes to the common property. Special resolutions (two-thirds majority) are required for large purchases of equipment or changes to rules on pets, plants and noise.
It may be that the legislation in the ACT and NSW has gone too far in protecting individual unit owners.
On the other hand, you could argue that an individual unit owner has property rights which should be enforced. One unit holder in a block of say 20 might like the old architecture, the local amenity and simple not want to move. Why should they be forced to sell to a developer just because the other 19 want to make a buck?
Why should a unit holder surrender the use of even a square metre of common property for an air-conditioning unit? That was the entitlement they paid for. No-one is obliged to be kind or generous. They might even have an environmental objection to air-conditioning. But bear in mind it could have been a proposal for a rain-water tank or solar panel.
That said, the unit title legislation must attempt balance between competing interests and enable people to live in harmony – given that they often are living literally on top of each other.
It should encourage more negotiation. Court cases have to be paid for by all unit owners.
The black ball may longer be appropriate, especially in larger blocks where one voter is a very small minority. A two-thirds or three-quarters vote might be better, or even a sliding scale depending on the number of units in a block.
Even some of those English gentlemen’s clubs required more than one black ball to oust a prospective member one the total voting reached a certain number.
And in corporations law, from which unit title developed, someone obtaining 90 per cent of the shares can compulsorily force the holder or holders of the remaining 10 per cent to sell.
The economic argument is that it benefits society as a whole for land to put to most efficient use, so the wishes of one person holding out against redevelopment should give way.
In any event, last week’s ACT case and the NSW experience reveals defects in the legislation. It has not taken care of someone holding out against the demolition of old, badly designed, energy-inefficient blocks nor the situation where some unit holders want to install new technology – and it could be solar hot water, photovoltaic cells or rain-water tanks as equally as air-conditioning.
At present one unit holder can cast the black ball.
Hi,
By chance in a search I came across this article. I realise it is now rather old and wanted to point out that the Unit Titles (Management) Act 2011 certainly fixes most of the issues raised and some were fixed already.
Under the Act it is possible for a Special Privilege to be granted to a unit owner for exclusive use of common property where the use is minor and unlikely to unreasonably interfere with the reasonable use and enjoyment of the common property by other owners. An air conditioning unit or an awning overhanging the common property are given as example.
If the Executive Committee is not confident that the applied for use could be defended as minor etc. then an unopposed resolution is still required to grant a special privilege out of the common property to a unit owner.
Our owners corporation had instance recently in which a motion to grant (non-minor) special privileges was put to a general meeting and was supported by a large majority but opposed by a few owners and consequently failed. The EC acting for the OC successfully sought orders from the ACAT under a provision of the Act that the tribunal can give orders to give effect to a failed motion if it is satisfied that the objections to the motion were unreasonable.
At the end of your article you mention various sustainability infrastructure. The 2011 Act now has two relevant provisions. Firstly, the OC can decide to install sustainabiltiy infrastructure on common property with only an ordinary (simple majority) resolution required. Our OC recently used this to install a PV system that produces enough electricity by day to match our nighttime consumption for common property lighting. Secondly, the Act says that Rules (formerly Articles of the Association) can not have the effect of prohibiting or restricting unit owners from installing sustainability infrastructure.
So, now the OC can more easily decide to have communal sustainability infrastructure on common property, unit owners can have such things on their unit areas and unit owners can make minor incursions onto common property if given permission by the EC, rather than an unopposed resolution of the OC.