The body corporate is a juristic person that requires organs and agents to act on its behalf. It has two organs, namely the trustees and the the general meeting. The general meeting is made up of all the owners of units within the sectional title scheme. All meetings of owners are called general meetings. The general meeting is very important as it deals with important matters beyond the jurisdiction of the trustees, and has the power to impose restrictions and give directions to the trustees in terms of section 39(1) of the Act.
General meetings are dealt with in Prescribed Management Rule 50 to 67. These rules deal with when the meetings are to be held; notice requirements; the agenda; the quorum; the Chairperson; voting procedures; and proxies. In this Carryn’s Corner Contribution I will deal with the first three aspects of the AGM.
When is the AGM held?
The owners must come together once a year at the annual general meeting (“the AGM”), which must be held within four months of the end of each financial year. The financial year of the body corporate runs from the first day of March in each year to the last day of February in the following year, unless otherwise decided at a general meeting or by the trustees. In practice, the AGM is often held after this period, primarily because of the delays in obtaining audited financial statements that must be sent with notice of the meeting.
At least fourteen days’ written notice must be given to all owners and to all persons who hold bonds over units in the scheme and who have advised the body corporate of their interests and to any managing agent. Shorter notice can be given if it is agreed by all persons entitled to attend. If special resolution or unanimous resolution is on the agenda then at least thirty days’ written notice is required, and the notice must specify the proposed resolution. However, the trustees may convene such a meeting on shorter notice if they believe that this is necessary due to the urgency or the specific nature of the matter that forms the subject of the resolution.
The notice must specify the place, the date and the time of the meeting. The meeting must be held in the magisterial district where the scheme is situated, unless owners have by special resolution determined some other place. The notice must be accompanied by copies of the insurance schedules, annual financial estimate, audited financial statement and the Chairperson’s report.
The notices are deemed to have been sufficiently given and delivered if copies are sent by pre-paid post addressed to owners at their addresses and to any bondholder at his address as reflected in the body corporate records. Each owner’s ‘domicilium citandi et executandi’ is, at first, the address of his or her section. But any owner can change this default address to another in the Republic. Any change of an owner’s address is only effective when the body corporate receives written notice of the change at its service address. An owner who does not personally occupy his or her section should ensure that the trustees receive written notice of his or her current postal address. Delivery shall also be deemed to have been effected on the owner if the documents are transmitted by facsimile or email to a number or address specified by such owner in writing for the purposes of receiving such documentation, which will only be effective when the body corporate receives it at its domicilium.
An unintentional failure to give notice to any bondholder who has advised the body corporate of its interest or the non-receipt of notice by a bondholder invalidates the proceedings at that meeting. Unintentional failure to give notice to any other person entitled to notice, or the non-receipt of such notice by any other person does not invalidate the proceedings at the meeting. Accordingly, if all notices are not sent by pre-paid post, written acknowledgements of receipt should be obtained from all bondholders entitled to notice.
Agenda at the AGM
All business transacted at a general meeting is referred to as ‘special business’ except for the first four items listed below. At an AGM meeting the following business must be transacted:
(a) the consideration of the audited financial statement and Chairperson’s report.
(b) the approval, with or without amendment, of:
(i) the schedules of replacement values referred to in rule 29(1)(c); and
(ii) the itemised estimate of anticipated income and expenditure referred to in rule 36;
(c) the appointment of an auditor or an accounting officer;
(d) the determination of the number of trustees;
(e) the election of trustees;
(f) any special business specified in the notice convening that meeting;
(g) any directions the owners wish to give to the trustees in regard to the performance of their functions or the exercise of their powers and any restrictions the owners wish to impose on the trustees in these regards;
(h) the determination of the domicilium citandi et executandi, the service address of the body corporate; and
(i) the confirmation by the auditor or accounting officer that any changes to the management or conduct rules have been filed with the Registrar of Deeds.
Article reference: Paddocks Press: Volume 10, Issue 5, Page 4.
Carryn Melissa Durham is a Specialist Sectional Title Lawyer (B.A LL.B, an LL.M), currently completing her Doctorate in sectional titles. Carryn heads up the Paddocks Private Consulting Division. For more information please contact Nicole on 021 686 3950 or email@example.com.
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