In the first and second part of this article series I dealt with the first 7 of the top 10 things to take note of when reviewing the AGM pack, and preparing to attend the meeting. This article will guide you through the last 3.
This is an important thing to take note of in the AGM pack, as the levies you will be liable to pay will be based on the approved budget. The prescribed management rules contained in Annexure 1 to the Regulations made under the Sectional Titles Schemes Management Act 8 of 2011 (“the STSMA”) contains the compulsory AGM agenda items. PMR 17(6)(j)(iv) requires that the body corporate take a resolution to approve the budgets for the administrative and reserve funds for the next financial year. The administrative fund is used to fund the operating expenses of the body corporate. The reserve fund must be used for the implementation of the maintenance, repair and replacement plan of the body corporate. The body corporate must, as soon as possible, but not later than 14 days after the approval of the budgets in the AGM, give each member written notice of the contributions and charges due and payable by that member to the body corporate.
9. Insurance schedule
Sections 3(1)(h) and (i) of the Sectional Titles Schemes Management Act 8 of 2011 (“the STSMA”) states that the body corporate has the duty to to insure the building or buildings and keep it or them insured to the replacement value thereof against fire and such other risks as are prescribed in Regulation 3 made under the STSM; and to insure against such other risks as the owners may by special resolution determine.
PMR 17(6)(j) contains 2 compulsory AGM agenda items relating to insurance. In terms of PMR 23(3) a body corporate must obtain a replacement valuation of all buildings and improvements that it must insure at least every 3 years and present such replacement valuation to the AGM. In terms of PMR 17(6)(j)(ii), the members must approve the schedules of insurance replacement values, with or without amendment. Furthermore, in terms of PMR 17(6)(j)(ii), the members must determine the amount and extent of the insurance cover by the body corporate for:
1. Public liability cover for any bodily injury, death or illness of a person any damage to or loss of property that is sustained on or in connection with the common property. This amount must not be less than R10 million or any such higher amount as may be prescribed by the Minister in any one claim and in total for any one period of insurance.
2. To cover the risk of loss of body corporate funds sustained, as a result of any act of fraud or dishonesty committed by a trustee, managing agent, employee or other agent of the body corporate.
3. For any additional insurable interest the body corporate has in the land and buildings included in the scheme; and relating to the performance of its functions. This additional amount is authorised by a special resolution of the body corporate.
10. Trustee’s report
PMR 26(1)(f) requires that the trustees must prepare a report adopted by the trustees reviewing the affairs of the body corporate during the financial year for presentation at the annual general meeting. PMR 17(6)(j)(i) contains the compulsory AGM agenda item to receive the reports of the activities and decisions of trustees since the previous general meeting, including reports of committees.
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 email@example.com.
Article reference: Paddocks Press: Volume 12, Issue 11, 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.