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What is an AGM and how does voting work at AGMs?

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Aug 20, 2021

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Mike Spencer
Mike Spencer

An AGM is an Annual General Meeting that is held once a year. It is a meeting to which all owners are invited and at which they need to make certain decisions.  A body corporate is run by all its owners, who then chose a number of people to represent them on a day-to-day basis. These people are called the Trustees and are elected at an AGM to manage and administer the complex.

The Sectional Titles Act 95 of 1986 sets out how the agenda should be sent out and what items must be included. For example, the election of trustees must be done at the AGM, as must the presentation and approval of the Annual Financial Report by the Auditors.  Other items are optional.

An AGM MUST be held within four months of the end of the previous financial year and unless there are special items on the agenda, a ‘14 days’ notice can be given.  Otherwise, a 21 days’ notice is required. The act says that a notice must be given by prepaid registered post which in the old days was a way of ensuring that owners were sent and received the notice of the AGM. But as it currently stands, the Post Office is in shambles. Prepaid postage is effectively not available, though they will try to convince you otherwise. The registered post seldom gets through to the owner because it either takes too long to get there so that it arrives after the day of the meeting – or owners don’t want to or have time to go to a specific post office to collect their registered mail.

In practice, it is far more effective and efficient to get written approval from each owner indicating that they are happy to accept all correspondence including the AGM notice by email. It is also a massive saving in cost when one considers that prepaid registered post costs about R50 along with additional costs of the A4 envelope and the printing and gathering of all the parts of the notice. The total cost is likely to exceed R80 per notice. In a scheme of just 100 units, that could cost the body corporate R8, 000 per annum which has to become a budgeted item. Email is far more sensible if owners agree in writing.

While there is no specific item for ‘general’ in the STMSA Act at the AGM, it is vital in a well-run scheme to have a general item at which time any owner can raise a point of interest. This is one of the few times that owners get together, and raising concerns at this time is very important. While no decisions can be made on management items, it does allow for owners to provide feedback to the trustees and managing agents on what they are experiencing at the complex.  It often acts as a release valve for owners who can become very unhappy if their concerns are ignored.

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