14 Jun Agenda points to be covered at the AGM
Every owner in a scheme must be presented with the notice of the annual general meeting at least 14 days before the date of the meeting. The notice must include an agenda for the meeting. The agenda items are standard and are prescribed by the Sectional Title Act.
Key items to be discussed at the annual general meeting are as follows:
- The annual financial statements for the past year: The body corporate is obligated to have an annual general meeting within four months after the end of the financial year. It is critical that the financial statements are presented to the owners in the scheme so they are aware and informed about the financial position and performance of the scheme.
- The proposed budget for the coming year: Although the annual general meeting takes place well into the new financial year, a budget of income and expenditure must be presented for consideration by the owners. The budget must indicate the levy income for the upcoming year as well as itemised expenses for the year. Once the budget is approved, the new levy will be calculated which is then be payable by the owners in the scheme.
- The schedule of replacement values with updated values for each section for insurance purposes: The trustees are responsible to ensure that the complex is adequately insured for replacement purposes. Each owner is entitled to have their section insured for more than what the body corporate insured it for. To consider this, owners must be informed of what their current insured value of their section is therefore, a detailed schedule of each section and its insured value must therefore be presented to the owners at the annual general meeting.
- Election of the trustees: Trustees are elected at the annual general meeting and resign automatically every year when the general meeting is held; new trustees must be elected at the annual general meeting. Nominations for the appointment of trustees must be presented to the managing agent at least 48 hours before the commencement of the meeting. Nominations must be signed by the nominee as well as the nominator or they will not be valid and cannot be accepted as a nomination.
- The determination of any directions or restrictions to be imposed on the newly elected trustees: Although trustees are elected to run the affairs of the scheme, owners have the opportunity to imposed certain restrictions on and give directions to the newly appointed trustees. A restriction may take on the form of a limit on how funds may be spent on certain items and a direction may take on the form of a request to investigate the replacement of a lift, or the employment of a security guard.
*This is the sixth blog in our series: 6 Key Questions About Annual General Meetings.