“The way the Sectional Titles Act stands now, if a trustee in a sectional title scheme wants to swing a vote in his favour by collecting proxies to vote at a general meeting, it is still possible to do so as there is nothing limiting the number of proxies given to one person. If that owner has a particular agenda, whether good or bad, they have the means to go ahead with their plan”, says Michael Bauer, general manager of IHFM property management company.
In a recent case encountered by IHFM, one owner managed to canvass throughout the complex and collect 19 votes via proxies, and was able to control a total of 60% of the participation quota, which basically gave the owner the majority either way. The minimum quorum required would have been 35% in this instance, said Bauer.
There are pros and cons to owners being allowed to do this, and while this will change in the future when the new Act is promulgated, in the meantime owners can use this voting structure in their favour. The new Act will control the voting block in limiting the numbers each person can hold.
“There are, however, protection mechanisms for other aspects of living in a sectional title scheme. Changing the conduct rules, for example, would need a special resolution and changing management rules would require a unanimous resolution. If resolutions are passed which are seen to affect the proprietary rights of other owners, this can be taken to the High Court for relief”, said Bauer.
“The truth of the matter is that most owners don’t want to attend their general meetings, and will often hand over a proxy if the person canvassing for votes is convincing. While it is good that owners communicate with each other and are willing to ensure that there is a quorum present at their AGMs by issuing proxies, they must be mindful that these are given for the right reasons and that the motives for wanting them will not jeopardise the management of the scheme in any way,” he said.
