A new year means AGM time for sectional-titles
Category Sectional-title Advice
As a new year begins, sectional-title property owners need to get ready for the Annual General Meeting (AGM) where each owner can discuss important issues relating to the management and operation of the scheme. The Prescribed Management Rule ("PMR") is the primary legal framework that governs these meetings.
So if you're unsure about any aspect regarding AGMs, we at De Lucia Group have you covered with all the info you need. Let's unpack the key points relating to these meetings:
When are AGMs held?
The AGM needs to be held within four months of the financial year-end which runs from the first day of March to the last day of February. This means that the AGM usually takes place anywhere from March to June. However, this can change if the owners or trustees agree to a different financial year. The AGM must be held at least once a year.
Members permitted to attend
Members who are permitted to attend the AGM include all the owners, the managing agent, and all holders of registered bonds over units. In order for the bond holders to attend, they must first advise the Body Corporate of their interest.
The notice period
All the members of the AGM (as mentioned in the point above) must be given at least 14 days notice of the meeting. This can be adjusted if the members agree to a shorter notice period.
Location of the AGM
The AGM must be held in the same magisterial district as the scheme. Or if this is not possible, an alternative place needs to be determined by the members of the Body Corporate in accordance to a special resolution.
Minimum number of people that need to be present
There is a certain percentage of people that need to be present or represented at the AGM in order for it to proceed (quorum). If this number is not met, then the meeting will have to be adjourned. The minimum number of people needed to attend is dependent on the number of units in a sectional-title. For example, if it has 10 units or less, then 50% of the owners need to be present or represented. In sectional-titles from 11 to 49 units, 35% of the owners need to be present or represented. Anything more than this will require attendance of 20%.
An attendance register must be kept.
How adjournment works
If within 30 minutes the above numbers are not met, the meeting must be postponed to exactly a week later, at the same time and place. If the same scenario is experienced at the adjourned meeting, the members in attendance will constitute a quorum and the meeting can proceed after 30 minutes.
There are a number of important documents to deliver to the owners before the AGM. This includes:
- The insurance schedule
- The annual financial estimate (or budget)
- The audited financial statement
- Trustee report reviewing the past financial year
The AGM Agenda
The AGM is comprised of many compulsory procedures that need to be covered. Firstly, there are four documents that need to be discussed, considered, amended (if needed) and approved - this includes the financial statement, trustee report, insurance schedules and the annual budget.
The meeting needs to appoint an auditor or accounting officer, as well as new trustees for the ensuing year through a voting process. It is important to note that the number of trustees will also be agreed upon at the meeting. Once the owners have voted, they can direct trustees on how to manage the year, while also imposing restrictions where necessary.
And lastly, all the owners (collectively referred to as the Body Corporate), need to determine the domicilium citandi et executandi. This simply refers to the address in a legal contract where legal notices and documents may be sent.
The AGM is hosted by the chairperson as elected by the trustees of the previous AGM. After the first meeting following the AGM, the new trustees are obliged to elect a new chairperson who will hold this position until the end of the next AGM.
The role of managing agents
If a sectional-title has employed the expertise of a trusted managing agent, the agent will help with AGM procedures involving finance, admin, and overall management.
AGM time is around the corner, so don't be caught off-guard and make sure your sectional-title is prepared to discuss important topics and implement tasks for the year ahead. If you need expert guidance and hands-on help, speak to De Lucia Group today.
Author: De Lucia Group