When you purchase a unit in a sectional title scheme you gain 3 things:
- 1. the section in which you reside;
- 2. an undivided share in the common property; and
- 3. membership to the body corporate.
You exercise your democratic right to vote and take decisions on the operation of the body corporate in general meetings.
Every body corporate must hold an annual general meeting (“AGM”) within 4 months of the end of each financial year. It can be overwhelming receiving the notice convening the AGM, with the various attachments, that together make up the “AGM pack”. This article is part 1 of a 3 part article series that will guide you through the first 4 of the top 10 things to take note of when reviewing the AGM pack, and preparing to attend the meeting. Understanding these top 10 things will mean that you will be a valuable contributor and that you will be placed in the best position to exercise a considered vote.
There are minimum requirements for the notice convening the AGM. Prescribed management rules (“PMR”) contained in Annexure 1 to the Regulations made under the Sectional Titles Schemes Management Act 8 of 2011 (“the STSMA”) 15(3) states that the notice of a general meeting must be accompanied by at least:
(a) the prescribed agenda;
(b) a copy or comprehensive summary of any document that is to be considered or approved by members at the meeting; and
(c) a proxy appointment form in the prescribed format.
1. Date, time and place
Section 6(1) of the STSMA sets out that the meetings of the body corporate must take place at such time and in such form as may be determined by the body corporate.
PMR 15(1) requires that at least 14 days’ written notice of a general meeting specifying the place, date and hour of the meeting must be given to:
(a) all members;
(b) all registered bondholders;
(c) all holders of future development rights; and
(d) the managing agent.
It is important to note that there are exceptions where short notice is accepted as set out in PMR 15(7). Furthermore, 30 days notice is required for AGMs where special or unanimous resolutions are on the agenda. PMR 15(4) requires that the AGM must be held in the local municipal area where the scheme is situated, unless the members have by special resolution decided otherwise.
It is important that you take note of the date, time and place that the meeting will be held. It often happens that general meetings are not called with the required notice period, or that the meeting is not held at the scheme.
2. Prescribed proxy form
Section 6(5) of the STSMA states that a member may be represented in person or by proxy at general meetings of the body corporate. This provision also contains a restriction that a person must not act as a proxy for more than 2 members. Where a member wishes to a appoint a proxy, they should consider the possibility that the person will receive other proxy appointments for the same meeting. If this appears likely, the proxy appointment form can be amended to provide that the proxy is appointed “with power of substitution”. This gives the proxy the right to appoint a third party to represent the member if this proves necessary. Alternatively, Form C could be completed so as to name a second person whose appointment as proxy will only take effect if the primary proxy is not available.
PMR 20(5) states that a member’s appointment of a proxy, and the proxy’s acceptance of the mandate must, except in the case of an appointment in a mortgage bond, be substantially in the prescribed form. In terms of Regulation 5(3) made under the STSMA, the notification by a member to a body corporate of the appointment of a proxy must be substantially in accordance with Form C, as prescribed in Annexure 3 of the Regulations.
The prescribed proxy form must be delivered to the body corporate 48 hours before the time of the meeting; or handed to the chairperson before or at the start of the meeting.
PMR 20(6) states that a proxy need not be a member, but must not be the managing agent or an employee of the managing agent or the body corporate.
When 2 or more persons are entitled to exercise one vote jointly, that vote may be exercised only by one person, who may or may not be one of them, jointly appointed by them as their proxy.
Finally, the votes of members who are artificial entities such as companies and close corporations must be exercised by natural persons they have appointed as their representatives in accordance with the provisions of their governance documents. In terms of PMR 20(4) where a member owns a unit in their capacity as a trustee of a trust, that member is the only person entitled to exercise the vote and the beneficiaries of the trust are not entitled to vote.
3. Trustee nominations and acceptance forms
PMR 7 states that trustees must be elected at the first general meeting of the body corporate, and then at each subsequent AGM. A member may nominate any natural person (including themselves) for the office of trustee. It is important for owners to consider who they wish to nominate and elect as their executive representatives.
The nomination of a trustee must be in writing, accompanied by the written consent of the person nominated. It must be delivered to the body corporate service address at least 48 hours before the AGM is due to start. If there are not at least as many valid nominations made before the meeting as the meeting decides there are to be trustees, then further nominations can be called for and made at the election meeting with the consent of the nominees.
4. Minutes of last AGM
The minutes of the last AGM will be included in the AGM pack. It is important to review these minutes to check for their correctness. If you were not at the last AGM, either because you were not yet an owner in the scheme, or were unable to attend for some other reason, then it is important to familiarise yourself with the minutes of the last AGM so that you can understand what decisions were taken by the general meeting in the management and operation of the body corporate in the last year.
PMR 17(6)(f) sets out the prescribed agenda for general meetings, and specifically requires that the members approve, by ordinary resolution, the minutes from the previous general meeting.
In checking the correctness of the minutes and approving them, owners should check that the minutes fulfill the minimum requirements as set out in the rules. In terms of PMR 27(2)(a), the body corporate records must include minutes of all meetings with:
- date, time and place;
- names and roles of those present, including details of the authorisations of proxies and member representatives;
- text of all resolutions; and
- results of all voting on all motions.
If you have experienced any problems with understanding your AGM pack, and require our assistance with preparing for your body corporate’s AGM, please contact consulting@paddocks.co.za to schedule a consultation.
Please click here to read part 2 of this article series.
Article reference: Paddocks Press: Volume 12, Issue 09, Page 01.
Dr Carryn Melissa Durham is one of the most highly qualified Sectional Title Attorneys in the country (BA, LLB, LLM and LLD), Carryn forms part of the Paddocks Private Consulting Division.
This article is published under the Creative Commons Attribution license.
Recent Posts
Recent Comments
- Graham Paddock on Body Corporate Functions: Insurance
- Graham Paddock on Spending body corporate funds
- Graham Paddock on The Levy Clearance Certificate: The Body Corporate’s Cheap & Effective Weapon
- Graham Paddock on The benefits of online sectional title meetings
- Heinz Wiesner on The benefits of online sectional title meetings
Archives
- January 2025
- December 2024
- November 2024
- October 2024
- August 2024
- July 2024
- June 2024
- May 2024
- April 2024
- March 2024
- February 2024
- January 2024
- December 2023
- November 2023
- October 2023
- September 2023
- August 2023
- July 2023
- June 2023
- May 2023
- April 2023
- March 2023
- February 2023
- January 2023
- December 2022
- November 2022
- October 2022
- September 2022
- August 2022
- July 2022
- June 2022
- May 2022
- April 2022
- March 2022
- February 2022
- January 2022
- December 2021
- November 2021
- October 2021
- September 2021
- August 2021
- July 2021
- June 2021
- May 2021
- April 2021
- March 2021
- February 2021
- January 2021
- December 2020
- November 2020
- October 2020
- September 2020
- August 2020
- July 2020
- June 2020
- May 2020
- April 2020
- March 2020
- February 2020
- January 2020
- December 2019
- November 2019
- October 2019
- September 2019
- August 2019
- July 2019
- June 2019
- May 2019
- April 2019
- March 2019
- February 2019
- January 2019
- December 2018
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
- April 2018
- March 2018
- February 2018
- January 2018
- December 2017
- November 2017
- October 2017
- September 2017
- August 2017
- July 2017
- June 2017
- May 2017
- April 2017
- March 2017
- February 2017
- January 2017
- December 2016
- November 2016
- October 2016
- September 2016
- August 2016
- July 2016
- June 2016
- May 2016
- April 2016
- March 2016
- February 2016
- January 2016
- December 2015
- November 2015
- October 2015
- September 2015
- August 2015
- July 2015
- June 2015
- May 2015
- April 2015
- March 2015
- February 2015
- January 2015
- December 2014
- November 2014
- October 2014
- September 2014
- August 2014
- July 2014
- June 2014
- May 2014
- April 2014
- March 2014
- February 2014
- January 2014
- December 2013
- November 2013
- October 2013
- September 2013
- August 2013
- July 2013
- June 2013
- May 2013
- April 2013
- March 2013
- February 2013
- January 2013
- December 2012
- November 2012
- October 2012
- September 2012
- August 2012
- July 2012
- June 2012
- May 2012
- April 2012
- March 2012
- February 2012
- January 2012
- December 2011
- November 2011
- October 2011
- September 2011
- August 2011
- July 2011
- June 2011
- May 2011
- April 2011
- March 2011
- February 2011
- January 2011
- December 2010
- November 2010
- October 2010
- September 2010
- August 2010
- July 2010
- June 2010
- May 2010
- April 2010
- March 2010
- February 2010
- January 2010
- December 2009
- November 2009
- October 2009
- September 2009
- August 2009
- July 2009
- June 2009
- March 2009
- February 2009
- February 2008
- February 2007
4 Comments.
My AGM pack was sent out by email. I requested hard copy. Was told they don’t have to and will charge.
Is this ok?
Hi there,
Thank you for your comment. We would love to help but unfortunately do not give free advice. Here’s how we can help:
– We offer a Free Basics of Sectional Title 1-week short course. You’ll be able to ask your course instructor any related questions. Find out more here.
– We offer consulting via telephone for R490 for 10 minutes. Please call us on +27 21 686 3950.
– We have Paddocks Club, an exclusive online club, to help you get answers to your questions about community schemes. Find out more here.
Kind regards
Paddocks
it depends on the cost structure/agreement entered into with the managing agent. if paper and printing is a cost excluded in your levy then the MA will charge as per their Annexure of charges.
What is the soonest time that the last AGM minutes of a body corporate must be signed by the respective trustees