Many sectional title schemes will now be holding their AGMs and most will run with the minimum of fuss or problems but sometimes there is confusion regarding certain aspects of “business” discussed at these meetings and the procedural processes that should be followed, says Michael Bauer, general manager of the property management company IHFM.
The AGM notice sent out allows for special business, but this term is often misunderstood. “Special business” is not any additional business that needs to be added to the agenda, such as allocation of parking bays or allocation of gate remote controls and security issues. Some issues are sometimes added that might actually require a special or unanimous resolution, e.g. the addition to a section.
If what is to be discussed needs a special or unanimous resolution then the notice period of the meeting to be held and the number of people that would need to be present to represent a quorum differs. This might be 30 days’ notice given to the owners of the meeting instead of the standard 14 days (as in the AGM case) and there might be a need for a unanimous resolution instead of a majority vote. If this is not met the decision made could be null and void, said Bauer.
Prescribed Management Rule 56 lays out the standard agenda for an AGM which is:
(a) The consideration of the financial statement and report referred to in rules 37 and 38;
(b) the approval with or without amendment of-
(i) the schedules of replacement values referred to in rule 29 (1) (c); and
(ii) the estimate of income and expenditure referred to in rule 36;
(c) the appointment of an auditor or an accounting officer;
(d) the determination of the number of trustees for the ensuing year;
(e) the election of trustees for the ensuing year;
(f) any special business of which due notice has been given in terms of rule 54;
(g) the giving of directions or the imposing of restrictions referred to in section 39 (1) of the Act; and
(h) the determination of the domicilium citandi et executandi of the body corporate.
Any additions to this agenda must be added in the correct manner, said Bauer.
“It all boils down to good management practices,” he said. “If there are any other issues apart from the general management agenda and any other complicated topics, they should be dealt with separately so that each component is not confused.”