The Basic Law of AGM’s as Stipulated by the Sectional Title Scheme Management Act
As experts in the field of Sectional Title Management, we at Camalb understand that owners of sectional title units don’t have the luxury of having copious amounts of time to study the Sectional Title Management Law. Camalb Academy is here to help you understand your rights and obligations as a sectional title owner.
The Annual General Meeting (AGM) of a Sectional Title Scheme is one of the most essential facets of a successful scheme, and each owner, and especially the trustees of the Body Corporate, should understand the Basic Law of AGMs as stipulated by the Sectional Title Scheme Management Act.
When should the Sectional Title AGM be held?
The Sectional Titles Schemes Management Act, 8 of 2011 (STSMA), stipulates that bodies corporate must hold their annual general meeting (AGM) within four months from the end of each financial year. If the year end falls on 28 February, this means that the AGM should be held in June at the latest.
This does place a responsibility on the trustees to have the Financial Statements of the Body Corporate drawn up and signed off in this period.
Notice of the AGM
The Sectional Title Act requires the notice of an AGM to be sent to all owners and registered bond holders of sections in the scheme, no less than 14 days prior to the meeting. This notice period includes weekends or public holidays and is not restricted to working days only.
Once you have received the notice of your AGM, it is essential to book that time out in your diary and make sure that you arrive at the AGM well in advance to make sure that you do not delay the proceedings.
Quorum requirements
PMR 19(4) states that if a quorum is not present within half-an-hour from the time appointed for a general meeting, the meeting shall stand adjourned to the same day in the next week at the same place and time.
Proxies
Should a member be unable to attend, they can be represented by proxy. It is important to note that a person cannot act as a proxy for more than two members. 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.
Voting
In terms of PMR 20(2), members in arrears with their levies, or in breach of the conduct rules of the body corporate following a court or adjudication order, are not entitled to vote on ordinary resolutions tabled at the AGM.
Compulsory items of the AGM agenda
In terms of PMR 56 the following business must be discussed at the AGM:
- Approve the minutes of the previous annual general meeting.
- Receive the chairperson’s report for the period from the previous general meeting to date along with the 10-year maintenance, repair and replacement plan.
- Insurance
- Approve with or without amendment, the schedule of replacement value.
- Determine the extent of the insurance cover in respect of:
- Public liability
- Fidelity fund cover
- Approve the budget for the administrative and reserve funds.
- Consider the audited financial statements.
- Note the opinion of the auditor in terms of their report included in the financial statements.
- To confirm any amendment, substitution, addition, or repeal of the rules.
- Appoint auditors for the ensuing financial.
- Determine the number of trustees for the ensuing year.
- Election of trustees for the ensuing year.
- Giving of directions or imposing of restrictions referred to in Section 7(1) of the Act.
Minutes
According to PMR 27(4), all members should be supplied with the minutes within 10 working days of submitting a written request.
The Importance of Attending your Sectional Title Schemes AGM
At Camalb, we understand that people have hectic time schedules and attending the AGM of your Sectional Title Scheme is normally not high on your list of most exciting events, but the reality is that if you do not attend your scheme’s AGM, you lose your right to voice an opinion.
Your AGM is the one event where you can ensure that your investment is safe and that the management is sound. This is also the opportunity to become involved in the management of your scheme. We have said it before, but we cannot stress enough that the management of your scheme lies in the hands of the members of the body corporate, which is you, the owner of one of the units in the complex. Unless you are paying the fees of an Executive Managing Agent, your managing agent’s role is only administrative.
The Importance of Being Prepared for your Sectional Title Schemes AGM
The notice of the AGM should include all the required documents, which, inter alia, include the minutes of the previous year’s AGM, financial statements, the budgets for the coming year, your investment schedules, proxy forms, and, most importantly, your proposed levies for the coming year. If you do not work through this highly important material, you cannot voice your concerns or approval on the matters at hand.
We understand that not everyone is an expert in the Sectional Title Law, and some of the concepts might be utterly foreign to you. You have a duty and a responsibility to ask the questions about how everything works before the AGM. If you increase your knowledge on the subject, you will be in a better position to secure the value of your unit and increase the pleasure that you derive from being part of your complex.
Camalb is at your service
Remember that our friendly Sectional Title Scheme Management Team at Camalb is here to assist you. Give us a call or sign up for our training sessions.
