| We know that in terms of Management Rule 17(1) of The Sectional Titles Schemes Management Act 8 of 2011 (the Act), the Body Corporate must hold an Annual General Meeting (AGM) within four months of financial year end. Seems simple, right? Well, not really when a pandemic creates massive issues around any reasonable size of social gatherings. In a way, it’s almost as though the legislators had some sort of premonition when the above Act was drafted ,where a few well-crafted clauses provide options for Trustees when dealing with AGMs under COVID-19 circumstances.
Here are the three ways in which to hold an AGM as contemplated by the Act:
- In the usual course, where owners meet in person in the local municipal area where the scheme is situated after receiving proper notice of the meeting together with the agenda, documents to be relied on and a proxy appointment form.
- In terms of Management Rule 17(2) of the Act, which allows for ALL owners, before or within one month of the end of a financial year end, to actually waive the right to have a meeting at all. In addition ALL owners must consent in writing to motions that deal with ALL the items of business that must be transacted at an Annual General Meeting. This means that owners cannot simply set out three things on what they deem important, and miss out the rest of the prerequisite agenda items. Motions on each of the agenda items set out in Management Rule 17(6) where necessary must be recorded in writing and all owners must sign off on these agreed motions.
- The innovative Management Rule 17(10) caters for online meetings which have become so popular these days, and quite successful, I might add. The only provisos to hosting these types of meetings, are, as we know, that the meeting must be accessible to all members and other persons entitled to attend the meeting, must permit communication with each other during the meeting and must permit the chairperson to confirm, with reasonable certainty, the identity of the participants.
Managing Agents have enquired as to whether or not an AGM is possible by way of round robin if owners do not want to have an in-person meeting or an online meeting. The answer is a definite no.
Legislation does not provide for a meeting as important as an AGM to be held in this way. Don’t confuse round robin resolutions with the AGM. Admittedly you can use the round robin method with separate special and unanimous resolutions, but not general motions at an AGM.
With regard to quorums and voting, there is no change, albeit difficult for Managing Agents and Trustees to keep an eye on who is on an online meeting and who isn’t. The question has been raised about when you have a quorum to start the meeting, but then a few people become disconnected during the meeting. Can a resolution or motion be passed? I am of the view that Management Rule 19(1) deals crisply with the question. It states that business cannot be transacted unless a quorum is PRESENT. So, no, resolutions should not be taken unless you know the views of the disconnected owners who could ratify the decision afterwards. On the point of voting, I am aware that there are quite a few different methods being utilised to vote, including online portal apps, google forms and the good old calculation of participation quotas the old fashioned way. The key is to keep things as simple as possible and to obtain expert advice to ensure that meetings are held in a streamlined, legal and professional manner. |
