Annual General Meetings (AGMs)
Category Property Management
AGMs – A few questions answered
Article by Zerlinda van der Merwe- Paddocks
In this article, we will be addressing a few queries relating to the responsibilities of the chairperson at the annual general meeting (“AGM”), as well as the eligibility for voting at this meeting.
The first question is whether the managing agent of the scheme may chair the AGM, on behalf of the chairperson of the trustees, who is present at the AGM.
To answer this question, we refer to Prescribed Management Rule (“PMR”) 18(1) of Annexure 1 of the Regulations to the Sectional Titles Schemes Management Act 8 of 2011 (“the STSMA”), which provides that the chairperson of the trustees must preside as chairperson at every general meeting of the body corporate, unless otherwise resolved by the members of the body corporate at the meeting.
PMR 18(2) further provides that if there is no chairperson, or if the chairperson of the trustees is not present within fifteen minutes after the time appointed for the holding of the meeting, or is unwilling or unable to act as chairperson, the members present must elect a chairperson for the meeting.
As can be seen from the PMR’s, as set out above, there is a mandatory requirement that the chairperson of the trustees chair the annual general meeting, unless the members resolve otherwise. Should the chairperson be unwilling or unable to chair the meeting, it may be proposed that the managing agent chair the meeting, if so resolved by the members in attendance. Alternatively, the chairperson of the trustees may chair the meeting, but proceed to refer particular agenda items to the managing agent to address, for example the budget or annual financial statements.
The next question addresses whether an owner, who is in arrears with their levies, may vote at an AGM.
PMR 20(2) provides that an owner is not entitled to vote at any general meeting if (a) the member fails or refuses to pay the body corporate any amount due by that member after a Court or Adjudicator has given a judgment or order for the payment of the amount. However, this disqualification from the vote is only applicable to ordinary resolutions, and not to special or unanimous resolutions.
There is no provision for the chairperson (or trustees and / or members of the body corporate) to exercise their discretion in allowing an owner to vote on ordinary resolutions should there be such a judgment or order pending.
The last question that we will address is whether the chairperson of the meeting should advise the members present at the AGM, that should they be in default of such a judgement or order, that they are not entitled to vote.
There is no legal obligation on the chairperson to advise the members in attendance at the meeting that should they be in default of such a judgement or order, that they will be disqualified from voting. However, for administrative purposes, and to ensure the smooth running of the meeting, the members should be reminded of this fact. In this regard, we suggest that the notice calling the annual general meeting should contain this reminder, which may be repeated during attendance registration prior to the commencement of the meeting.
Article reference: Paddocks Press: Volume 12, Issue 03, Page 01.
Posted In: Paddocks Press Newsletter | 29/03/2017
Author: Zerlinda van der Merwe- Paddocks