Body corporate meetings - Part 3
Category Property Management
Body corporate meetings - Part 3 - Special General Meetings
Article by Zerlinda van der Merwe - Paddocks
There are 3 different types of meetings in sectional title schemes, namely trustee meetings, dealt with in the first part of this series of articles; annual general meetings, dealt with in part 2; and all other general meetings, which are called special general meetings.
Special general meetings
In this third article, we will be dealing with special general meetings ("SGM"). In terms of Prescribed Management Rule ("PMR") 17(3) of Annexure 1 of the Regulations to the Sectional Titles Schemes Management Act, 8 of 2011 ("the STSMA"), all general meetings, other than the AGM, are SGM's.
The trustees, by majority resolution, may whenever they see fit, call a SGM, but must, in terms of PMR 17(4) call a SGM when requested to do so by members entitled to 25% of the total participation quota of all sections within the scheme, as well as the holder/s of mortgage bonds over 25% in number of all primary sections.
Should such members or bondholders request a SGM, their request must include the proposed motions to be included in the agenda of the SGM, as required by PMR 17(5). Otherwise, the trustees, in terms of PMR 17(7), determine the agenda, which must include the prescribed agenda items, as set out in PMR 17(6), including a description of the general nature of all business, as well as a description of the matters that will be tabled for voting, including the proposed wording of any special or unanimous resolution.
The trustees, by majority resolution, call a SGM, and must ensure that, in terms of PMR 15(1), at least 14 days' written notice, indicating the place, date and time of the SGM, is given to all members, registered bondholders, all holders of future development rights and the managing agent, unless any person entitled to receive notice waives their right to do so in writing, as provided for in PMR 17(9).
The notice must be accompanied by:
- an agenda, setting out the prescribed items of business as dealt with in PMR 17(6);
- a copy or comprehensive summary of all documents that will be considered and approved by members;
- and the proxy form in the prescribed format, as required in PMR 15(3).
In terms of PMR 15(6), notice of an AGM must be delivered to members at their service address. It is important to note that should a special or unanimous resolution be tabled for member approval, at least 30 days' notice is required in terms of section 6(2) of the STSMA, which must be delivered by hand to a member, or sent by pre-paid registered post to the address of the section or another address the members has specified in writing for that purpose, as set out in section 6(3) of the STSMA. In addition to one of the abovementioned methods of delivery, the notice may further be send via email or fax, as provided for in section 6(4) of the STSMA.
Before the business of the SGM may proceed, a quorum of members or their duly authorised representatives must be present. In this regard, the quorum for a SGM, where an ordinary or special resolution will be tabled for member resolution, in terms of PMR 19, for a scheme of less than 4 primary sections, is two thirds of the total votes of members in value, and for any other scheme, the quorum is members entitled to vote and representing one third of the total votes of members in value.
In terms of PMR 20(9)(a), should the special resolution be passed at a SGM, where the quorum is less than 50% of the total value of all members in the scheme, the resolution cannot be implemented for a period of one week, allowing members to take the steps provided for in PMR 20(9)(b). As a reminder, the value of the votes held by the developer and the body corporate must not be taken into account. On the other hand, a unanimous resolution requires a quorum of at least 80% of the members, calculated both in value and in number, in terms of section 1(1) of the STSMA.
In terms of PMR 15(5), registered bondholders, holders of future development rights and the managing agent may attend the SGM, and may speak on any matter on the agenda, but, acting in those capacities, they are not entitled to propose any motion, or to vote. Should the members resolve that these parties presence would unreasonably interfere with the interests of the body corporate or any person's privacy, these parties will not be entitled to attend that part of the SGM.
A member may table their vote personally, or be represented by proxy at the AGM, provided that no person may hold proxies for more than 2 members. A special resolution is passed by at least 75% of the votes of the members, whereas a unanimous resolution must be passed by all the members present or represented at a SGM, forming the required quorum. The votes cast for both special and unanimous resolutions are calculated in both value and number, whereas the votes for an ordinary resolution are calculated only in value, where each member only has one vote, as set out in section 6(7) of the STSMA.
Should a unanimous resolution have an unfairly adverse effect on any member, the resolution is not effective unless that member consents in writing within 7 days from the date of the resolution, as required in section 6(8) of the STSMA.
As with the minutes of trustee meetings, as well as AGM's, as dealt with in parts 1 and 2 of this article series, in terms of PMR 9(e), the trustees must compile minutes of each SGM, and distribute these to the persons entitled to receive notice of the SGM not later than 7 days after the meeting. Furthermore, in terms of PMR 27(4), any member may request access to, or copies of, such minutes within 10 days of their written request.
Article reference: Paddocks Press: Volume 14, Issue 04
Posted In: Paddocks Press Newsletter | 24 Apr 2019
This article is published under the Creative Commons Attribution license.
Author: Zerlinda van der Merwe - Paddocks