After a gap of almost two years, the body corporate of a residential property scheme have called an annual meeting that, a reader feels, could have negative financial consequences for the owners.
The trustees recently announced that a meeting in respect of the previous financial year was to be held.
The reader questions whether this is good practice as no reasons were proffered for the unusual delay.
See the reader’s question here.
He suspects that levies will be raised significantly as there has been no increase as a result of the skipped meeting, as well as the fact that another financial year has passed.
The Sectional Titles Schemes Management Act, which came into effect on October 7, 2016, states that body corporate meetings must take place at a time to be determined by the organisation.
The skipped meeting should have taken place in the months soon after the act became effective, but it is not inconceivable that a misconception was created upon the reading of the applicable section.
It states that trustees can decide when and how to hold meetings and therefore creates a strong impression of autocracy.
The regulations to the act set out certain management rules.
Rule 17(1) states that, subject to certain exceptions, the body corporate must hold an annual general meeting within four months of the end of each financial year.
Skipping the meeting would have been possible under the provisions of rule 17(2).
This allows for the business of an annual general meeting to be approved by all members in writing, provided this takes place prior to or within one month of the financial year end.
The budgets for the administrative and reserve funds are approval items for the agenda of the meeting, so the levies payable should have been considered.
It is possible that everyone merely remained quiet about the fact that no meeting was called or held due to the “benefit” of there being no increases.
Items up for resolution at a general meeting typically require a majority vote ‒ in value, not number ‒ and delayed items on the agenda may not be approved if the required thresholds are not met.
Perhaps of greater concern than any possible unpleasant hikes in levies is that the scheme was administered for a year without the approval of the body corporate in respect of the items that were to be approved for that period.
Reports on the activities of trustees, consideration of insurance replacement values and cover as well as other business that may have been necessary to deal with were ignored or dealt with without approval.
It is not clear what steps our reader would like to take in respect of the ostensibly delinquent trustees.
It may be better to merely ensure that a board of trustees who are interested in the proper administration of the scheme, or a managing agent, is appointed.
All owners have an interest in ensuring that the scheme is properly administered as this will ultimately affect the value of their properties.
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