Sectional Title GM meetings call for procedural correctness

Posted On Wednesday, 22 August 2012 15:08 Published by Commercial Property News
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A difficult situation may arise when it comes to voting at sectional title scheme general meetings and the correct procedures have not been followed with regard to proxies, or if those present are excluded from voting for various reasons, says Michael Bauer, general manager of the property management company IHFM

 

In sectional title schemes the quorum requirements vary that is needed to have a quorum present. In schemes of up to ten units, 50% of the attendance (in number and value) is needed, in schemes of 11 to 50 units, 35%, and larger schemes 20%. If there is no quorum the meeting must be adjourned to the following week on the same day, same place, and at same venue.

“Obviously, the owners would want to prevent time wasting and having to postpone proceedings, so it is wise to make sure everything is in order before the meeting,” said Bauer.

“Where problems come in is where owners have nominated others as their proxies (it often happens that the owners nominate their letting agents, which means that one person might have a significant share of the votes) and when the proxy forms are checked for signatures, they often are not valid. Although at present one person is allowed to hold as many proxies as he can obtain, the proxies can be invalidated if they are checked carefully and the proper paperwork has not been done. The current owners’ names must be confirmed and checked against the attendance register and the deeds office registration. It is important that the attendance register lists all the sections, the full names of the owners of each section as per the deeds office and the participation quota of each section as those need to be added up to confirm a quorum is present.

It is recommended to ask for proof of identify of each attendee before allowing them to sign the attendance register.

Those attending and voting at a general meeting must have the legal right to do so and all of this information must be lodged 48 hours before the meeting,” said Bauer.

Bauer always asks those who hold proxies if the necessary documents are attached to the proxy form. In cases where a property is held by a juristic person, for instance, does the nominee have a copy of the resolution nominating one of the authorised representatives to act on the others’ behalf?

In the case of a trust, the proxy form should have a resolution of the trustees attached as well as a copy of the trust deed.

In the case of a company, the proxy form should have a resolution of the directors attached as well as a copy of the CM22 form listing the directors of the company.

In the case of a close corporation, the proxy form should have a resolution of the members attached as well as a copy of the CK1 and CK2 forms of the close corporation.

Without those supporting documents, it is not possible to verify that the proxy forms are valid. If they are not valid they can be rejected.

“Another important thing to remember is that the proxy’s full name and ID number must be on the proxy form and he should produce his ID at the meeting to verify attendance.”

Where natural persons are married in community of property, both must be at the meeting or if one is to attend the spouse must have a proxy from the other as stated in Prescribed Management Rule 66.

The voting itself can be done by a show of hands and each owner has one vote per section.

According to PMR 64, an owner is not entitled to a vote if he is in breach of the conduct rules or if his levies are in arrears, but this restriction only applies to majority resolutions. Owners who are not entitled to vote according to PMR 64 can vote for special resolutions and unimious resolutions.

Last modified on Monday, 03 June 2013 13:21

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