Proxy Farming in Strata

What is Proxy Farming?

Proxy farming, also known as proxy harvesting or stacking votes, is a process where one or more owners in a scheme (the proxy farmer(s)) tell other owners in the scheme that their proxy form is required to either support a particular cause, whether that be to vote in favour of a motion or vote against it. The proxy farmer then submits the signed proxies to the chairperson of the owners corporation (i.e. the stack of proxy votes) which in turn grants the chairperson the kind of powers that the strata legislation never intended.

It has been said that proxy farming kills the democratic process in strata schemes by giving one or more owners dominant control over the meeting and decision making process. Sounds unfair right? Depends which side of the fence you sit. Given that proxy farming is a frequent occurrence, many meetings turn ugly due to proxy farming and can result in distrust and disconnection between owners in a scheme.

Can I Stop Proxy Farming Within My Scheme?

Unfortunately proxy farming is not banned under NSW strata legislation. However, there are some things that lot owners can do to challenge proxy farming in their scheme.

1. Check to ensure that the proxy farmer’s proxy forms are completed correctly, signed and dated. Too often, owners who appoint a proxy forget to sign the proxy form. This invalidates the proxy.

2. The proxy form must be given to the secretary of the owners corporation prior to or at the commencement of the general meeting, unless the building is a “large scheme” (more than 100 lots) where the proxy must be given to the secretary at least 24 hours prior to the commencement of the general meeting.

3. The proxy form must state whether or not the person acting as a proxy can vote on all matters or only certain matters.

4. The proxy form must state how the person acting as the proxy should vote on a motion for the appointment or continuation in office of a strata managing agent.

5. If the lot owner granting the proxy to the proxy farmer is not financial, the proxy’s vote does not count. Therefore, try to find out via the strata managing agent the financial status of the owner granting the proxy before the meeting commences to see if their vote counts.

Conclusion

Proxy farming in New South Wales is thriving and will continue to do so for some time until the NSW strata legislation bans it.

If you think you may be the subject of proxy farming and need legal advice, please contact us on (02) 8710 3430.

Please note that the information contained in this article is not legal advice and should not be relied upon as such. You should obtain legal advice before you take any action or otherwise rely upon the contents of this article.