Consequences for “unfinancial” lot owners
Posted on July 08, 2025
Situations involving unfinancial lot owners can be complex, and where mismanaged, resolutions which would otherwise be valid decisions of the Corporation may be invalidated.
A lot owner is considered “unfinancial” or “not entitled to vote” when they have outstanding amounts due and payable to the Corporation. This is set out within section 34(7) of the Strata Titles Act 1988 (SA) and section 84(14) of the Community Titles Act 1996 (SA).
Being classed as unfinancial precludes a lot owner from voting on ordinary and special resolutions. Contrary to popular myth in the strata and community titles space, being unfinancial does not preclude an owner from:
- attending general meetings of their Corporation; and / or
- voting on any resolution which is required to be passed unanimously.
Where a Corporation purports to pass a unanimous resolution, but has refused an unfinancial owner the opportunity to attend the meeting and / or vote on the unanimous resolution, the resolution will not have passed unanimously.
To avoid confusion and concern, it is recommended that a Corporation’s minutes clearly set out the votes cast for, against and / or abstaining in respect of any resolutions of the Corporation.
If you require assistance in relation to any issue related to the Strata or Community Titles space, please contact our specialist Strata and Community Titles team.
