Sectional
Title AGMs
Article By: Jennifer Paddock
In this
article we set out the management rules prescribed by the regulations to
the Sectional Titles Act 95 of 1986 which govern sectional title Annual
General Meetings (AGMs)...
When
must the AGM be held?
In terms of
prescribed management rule ('PMR') 51, the AGM must be held within four
months of the end of each financial year. The financial year runs from the
first day of March to the last day of February unless otherwise decided at
a general meeting of owners or by the trustees.
How
much notice must owners be given of the AGM?
In terms of
PMR 54 at least fourteen days notice of the AGM must be given to all
persons entitled to attend, unless all of these people agree to a shorter
notice period.
To
whom must notice be given?
PMR 54
provides that notice must be given to all owners,
all holders of registered mortgage bonds over units who have advised the
body corporate of their interest and to the managing agent.
What
documents must be delivered to owners/mortgagees before the AGM?
In terms of
PMR 39 the trustees must ensure that copies of the following documents are
delivered to owners and mortgagees who have advised the body corporate of
their interest:
-
The insurance
schedule setting out estimates of the replacement values of the
buildings and all improvements to the common property; as well as the
replacement value of each unit;
-
The annual financial estimate (or
budget) setting out an itemized estimate
of the anticipated income and expenses of the body corporate during the
ensuing financial year;
-
The audited
financial statement which fairly presents the state of affairs of
the body corporate and its finances and transactions as at the end of
the financial year concerned; and
-
A
report by the trustees reviewing the body corporate's affairs over
the past financial year.
-
Quorum requirements
-
In terms of
PMR 57 no business may be transacted at any general meeting unless a
quorum of persons is present in person or by proxy at the time when the
meeting proceeds to business. The number of persons present or
represented differs depending on the number of units in the scheme:
-
If
there are 10 units or less: 50 percent of the owners, present or
represented, constitute a quorum;
-
If there are between 11 and 49 units: 35
percent of the owners, present or represented, constitute a quorum; and
-
If there are 50 or more units:
20 percent of the owners, present or represented, constitute a quorum.
-
Adjournment due to lack of quorum
-
According
to PMR 58, if within half an hour of the time appointed for a general
meeting a quorum is not present then the meeting must stand adjourned to
the same day in the next week at the same place and time. If at the
adjourned meeting a quorum is not present within half an hour of the
time appointed for the meeting, the owners present in person or by proxy
and entitled to vote form a quorum.
-
Compulsory items of the AGM agenda
-
In terms of
PMR 56 the following business must be transacted at the AGM:
-
The consideration of the financial
statement and the trustees' report;
-
The approval with or without amendment
of the insurance schedules and the annual budget;
-
The appointment of an auditor or
accounting officer;
-
The election of trustees for the ensuing
year;
-
Any
special business of which due notice has been given;
-
The owners' giving of directions and
imposing of restrictions on the trustees;
-
The determination of the domicilium
citandi et executandi of the body corporate; and
-
The confirmation by the auditor or
accounting officer that any amendment, substitution, addition or repeal
of the scheme's rules have been submitted to the Registrar of Deeds for
filing.
-
Voting
-
In terms of
PMR 60 a resolution put to the vote of the meeting must be decided on a
show of hands, unless prior to or on the declaration by the chairman of
the result of a show of hands, a poll is demanded by any person entitled
to vote at that meeting.
-
According
to PMR 62 on a vote by show of hands the owner of a section or sections
has one vote for each section owned.
-
In terms of
PMR 66 when two or more persons are entitled to exercise one vote
jointly that vote must be exercised by only one person (who may or may
not be one of them) jointly appointed by them as their proxy.
-
No
vote in certain circumstances
-
According
to PMR 64 an owner is not entitled to vote at a general meeting, except
in the case of a unanimous or special resolution, if:
-
any contributions payable by him in
respect of his section and his undivided share in the common property
have not been duly paid; or
-
he persisted in breach of any of the
conduct rules notwithstanding written warning by the trustees or
managing agent to refrain from breaching such rule.
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