It is often hard to get sectional owners to attend meetings and for the body corporate to get a quorum of owners present or represented. The normal quorum requirement is one third of all owners’ voting values, but it is not unusual for general meetings to be automatically adjourned for a week because there is no quorum, and this is a waste of time and money.
Under previous legislation, no form was prescribed for an owner’s appointment of a proxy. Now, under the Sectional Titles Schemes Management Act of 2011 (STSM Act), Form C to the Regulations is prescribed. You don’t have to use this form exactly as prescribed, but the appointment document has to be “substantially” in the same format. This means you can make minor amendments to the wording, and you can send it by email, but you do need to include all the information required by the format of the prescribed form and make sure it is signed by the owner and the person appointed.
Another important issue is that the STSM Act limits the number of proxy appointments any person may hold. No person may act as a proxy for more than two owners.
So when owners appoint proxies, as they should if they cannot attend a general meeting, they have to fill out Form C. They have to specify the name of the person they are appointing, and then have the appointed proxy sign the form to confirm that the appointed proxy accepts the mandate. If an owner signs the form but leaves out the name of the proxy, i.e. signs the proxy form “in blank”, that appointment is incomplete and therefore invalid. A third party cannot take that incomplete form, fill in their own name and then sign the acceptance. It can only be the owner who fills in the name of the proxy, and the form becomes valid when that proxy named by the owner signs the acceptance clause. In short: A proxy appointment form signed in blank is invalid.
In giving a proxy on Form C, an owner can include a statement that the named proxy will have “power of substitution”, which means that the appointed proxy is entitled to substitute a third party. This might make sense if the owner is concerned that the proxy may not be able to attend the meeting or may be appointed by two other owners. In this case the named proxy would need to sign the form to show acceptance of the original appointment and then enter into a separate contract delegating the rights and assigning the obligations under the original appointment to a third party, and both the original proxy and the third party accepting the mandate as the substitute would have to sign that contract. The chairperson of the meeting would have to see both the original proxy and the substitution contract before allowing the substitute to represent the owner.
Should you require any advice on this subject, or wish to discuss any related matter with a specialist community schemes attorney, don’t hesitate to contact our consulting department at email@example.com for a no-obligation quote to provide the necessary legal assistance.
Graham Paddock is South Africa’s Sectional Title Guru. Graham advises and drafts legislation for the Government. His advice is valued by all stakeholder groups in the industry.
Article reference: Paddocks Press: October 2019.
This article is published under the Creative Commons Attribution license.