10 Dec 5 Things you must know about voting at sectional title AGMs
The introduction of the Sectional Titles Schemes Management Act (STSMA) in 2016 changed the way we vote at annual general meetings (AGMs). Prior to this date, voting was mostly used to elect trustees as other agenda items were simply determined by a show of hands on the basis of a majority vote.
In some ways the changes in the new Act have simplified the voting process; in others, it has made it more cumbersome.
- Determining the voting result
Voting at an AGM requires a majority vote for the agenda item to be approved and in the STSMA, a majority vote is 50% plus 1 extra vote. If the majority vote is not obtained the item cannot be approved.
- What to vote on
All items on the agenda must be voted on – except the administrative items such as confirmation of the quorum. After each agenda item has been considered by the members, each member must complete their voting slip indicating if they approve the item or not. The chairperson is responsible for counting the votes and announcing the outcome of each agenda item.
- Applying PQ values
Each section in a scheme has a participation quota (PQ) value. PQ values only apply to sections and not exclusive use areas, irrespective of how they are allocated (scheme rules or Title Deed). An owner that has the use of an exclusive use area will therefore not have a bigger vote than the person with the same size section but no exclusive use area.
Sections that are registered to the body corporate will have a PQ value but when voting takes place those sections and PQ values are excluded from the process.
- When an agenda item is not approved
It is unusual for an agenda item to not get approved at the AGM, but when it happens the members need to debate the item until it is approved. This may take some convincing by the chairman and trustees. It is essential that all items on the agenda get approved, else the members will need to attend another AGM where the items are tabled again for approval.
- Voting for trustees
When there are more nominations for trustees than required, members will need to take a vote. Depending on the number of trustees required, the nominees who received the least votes in PQ value will fall away and the rest of the nominees will become the trustees.
The chairperson is not elected by the members of the scheme; this decision is left to the trustees and must be made at the first trustee meeting following the AGM. At this meeting, votes are not based on PQ values but by show of hand where each trustee has one vote regardless of the size of their section.
The amended voting requirements at an AGM has certainly made the work of the chairman, trustees and managing agent more complicated. Voting slips must be counted and a record must be kept of each vote casted at the meeting because the minutes of the meeting is required to reflect the percentage of votes in favour of each agenda item.
Well-prepared trustees and managing agents will keep their records updated and will ensure that it reflects the outcome of each vote taken at the meeting.