Real Estate Investor Magazine South Africa March 2013 | Page 40

SECTIONAL TITLE

BY ANGIE REDMOND

Getting To Grips With An AGM
Your vote counts

T

he main reasons to attend the AGM
in a sectional title complex if you are
an owner, is a semblance of control of
the financial situation or better knowledge of
the complex’s operations, says Michael Bauer,
general manager of the property management
company, IHFM.
Attending the AGM is the sectional title
owners’ only real chance of influencing how
their scheme is run. The prescribed rules
specify a number of very important items that
must be considered and decided on by the
owners at the AGM. These decisions directly
affect owners’ lifestyles and pockets so it’s
worth the time and trouble of attending and
taking part in those decisions.
The root cause of most serious disputes in
schemes is money. At the AGM, members
have the opportunity to discuss, and have
explained to them if necessary, how their
money was spent. The logical as well as
stipu lated second pa r t of the f inancia l
discussion is the approval of the budget for the
coming year. This is each owner’s opportunity
to make sure that the amounts approved are
reasonable but realistic enough to avoid raising
the spectre of a special levy.
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March 2013 SA Real Estate Investor

A very common cause of dissatisfaction
among owners is the behaviour of trustees
and the chairperson. Every owner is entitled
to nominate one or more persons – including
him or herself – to serve as a trustee and then,
at the AGM, to vote for their election. There
is no need to suffer because of incompetent
or overzealous trustees. The AGM is the
opportunity for owners to vote in people of their
choice for this very important function.
Once suitable trustees have been voted into
office, there is opportunity at the AGM to
direct or restrict their activities. Any owner
may make such a proposal. Examples could be
a limit on spending on a single item without
informing the owners beforehand; a direction
that a different managing agent be appointed;
or any one of the trustees’ tasks. But bear in
mind that the owners can’t take away any
function or power that is given to the trustees in
the Act or rules, such as the raising of a special
levy: the owners may only make restrictions on
how the trustees go about that function.

And if you can’t make it?
What many owners do not realise is that, if
they are not capable of attending, they are
allowed to appoint a proxy – and this should

be done, because it is a right each owner has
and he should use it to ensure a fair outcome.
If a sectional title scheme has problems the unit
owners should know about them.
The Prescribed Management Rules, says
Bauer, say that the proxy’s appointment must be
in writing and must be handed to the chairman
before the meeting (a late posting excuse is not
acceptable).
Anyone except the managing agent and/or
his/her employees can be a proxy.
There are two types of proxies and it has to
be specified which votes he or she can make.
An ‘open’ proxy allows the proxy to vote on
anything on the agenda at his or her sole
discretion. The ‘directive’ proxy limits the proxy
to the directions given by the owner.
In South Africa, says Bauer, the Sectional
Title Act defines no limit to the number of
proxies an owner can hold when attending an
Annual General Meeting. It can, he repeats,
make a big difference to the wellbeing of a
sectional title scheme, if owners attend the
Annual General Meeting in person or by
proxy.

RESOURCES

Paddocks
IHFM
www.reimag.co.za