Skipping your body corporate's AGM may cost you in the long run
Members' attendance at a sectional title AGM is essential to the welfare of the scheme.
At this time of year, the trustees of sectional title schemes are often preparing for their annual general meetings, at which they come face to face with body corporate members.
"Most sectional title schemes' financial years end on February 28," says Michael Bauer, general manager of IHFM, a sectional title management firm.
"Trustees are by law required to get their auditors to finalise their schemes' audited financial statements four months after the end of the year. They are required to follow up with an AGM, at which the body corporate members have the opportunity to review key issues with the trustees and their managing agent.
"The AGM has to take place within four months of the financial year end. The prescribed management rules also stipulate that notice of the AGM has to be given at least 14 days before the date and that this notice must contain all supporting documents for the AGM. This gives members the chance to consider these in detail before the meeting."
Bauer says the financial statement and auditor's report have to be discussed at every AGM. Also, the following items need to be approved, with or without amendment:
lAny special business of which notice has been given.
Bauer says: "If it is genuinely difficult for owners to attend the AGM, they should appoint a proxy to attend and vote on their behalf. Where no proxy is available it is acceptable for an owner to delegate his vote to the chairman. It is also acceptable for the chairman or a member to canvass members' votes by means of proxies and many important decisions have been passed at AGMs in this way.
"Non-attendance by members or their proxies can have serious consequences, especially if the required quorum of members is not achieved at the first meeting.
"In these circumstances the trustees are obliged to adjourn another meeting within seven days, at the same time and the same place. At this meeting the quorum requirements will no longer apply."
Bauer says it can happen that, without the actual consent of the body corporate members, a handful of members and/or trustees pass a resolution for a significant alteration to the scheme, the raising of a loan or other measures which will require big increases in annual levies, or could affect the financial stability of the body corporate.
"Frequently, owners with grievances will try to use the AGM as a forum for airing their problems, for instance that the managing agent did not do this or that or that the resident in unit x still plays loud music at midnight. The trustees and managing agent must resist these attempts to divert discussion from the prescribed agenda. If they do not, more important matters will be overlooked and... fewer members will attend the following AGM."
He advises trustees to deal with individual complaints in trustee meetings or on a one-on-one basis.
Weekend Property supplement (Saturday Argus)
Posted at 08:02AM Feb 07, 2010 by Editor in Residential |