We've received a couple of queries on whether a body corporate is entitled to waive the requirement to have an AGM for the current year, in view of the current Covid19 pandemic as well as the prohibitions on gatherings.
In some circumstances, it is possible, although it needs to be waived by all owners within one month prior to the end of the financial year. In most cases, this has already passed.
In terms of the Prescribed Management Rules, the body corporate must hold an AGM within four months of the end of each financial year (PMR 17(1)). Further, in terms of PMR 17(2), the body corporate may decide to not hold an AGM but only if before or within one month of the end of the financial year, all members of the body corporate in writing waive the right to the meeting and consent to the motions that deal with all items that must be dealt with in an AGM. Accordingly, as this time period may have already passed for most body corporates, it will not, in our view and in those cases, be possible for the body corporate to decide to not hold an AGM for the year. Where a body corporate is approaching the end of their financial year end, then all owners would have to agree in writing by round robin resolution to waive the requirement to have an AGM.
In terms of delaying the AGM, the CSOS has recently issued a practice directive (stating that AGM’s and CSOS returns which are delayed due to lockdown will not be penalised (but delayed in this regard does not mean waived). At meetings of trustees, trustees may approve a levy increase of up to 10% as well as a special levy where it is absolutely necessary. However, in the interim, in terms of PMR 17(9) in respect of a budget and levy increase, a notice may be sent to all owners in terms whereof a special general meeting is waived (by all owners – NB!). The budget and levy schedule can be sent round by way of round robin resolution and it has to be approved by all owners. In respect of hosting meetings via Zoom or Skype, provided adequate notice is given, and provided that there is a quorum then an ordinary resolution is needed to approve the budget. In terms of Prescribed Management Rule 10, the meeting can be held by telephone or electronically but it must be accessible to all members and others entitled to attend, each person should be able to participate and communicate, and the chair must be able to identify those participating in the meetings. Furthermore, if the body corporate or homeowners association has a constitution, it will also need to ensure compliance with those provisions.
Contact our offices should you require any assistance or advice in connection with body corporate governance, or any aspect of sectional title scheme management. You can contact Natalie Macdonald-Spence at natalie@spencelaw.co.za or Wendy Mvinjelwa at wendy@spencelaw.co.za to obtain advice in this regard.
This article is for information purposes only, and should not be regarded as legal advice. Contact your attorney or our offices should you need legal advice. Spence Attorneys will not be held liable for any act or omission or you acting upon anything mentioned in this article, and by use of this website you indemnify the writer against any claim howsoever arising.