Prox­ies at sec­tional ti­tle AGMs can be used to swing votes

Weekend Argus (Saturday Edition) - - PROPERTY -

THE WAY the Sec­tional Ti­tles Act stands now, if a trustee in a sec­tional ti­tle scheme wants to swing a vote in his favour by col­lect­ing prox­ies to vote at a gen­eral meet­ing, it is still pos­si­ble to do so as there is nothing lim­it­ing the num­ber of prox­ies given to one per­son.

“If that trustee has a par­tic­u­lar agenda, whether good or bad, he has the means to go ahead with his plan,” says Michael Bauer, gen­eral man­ager of IHFM prop­erty man­age­ment com­pany.

In a re­cent case en­coun­tered by IHFM, one owner man­aged to can­vass through­out the com­plex and col­lect 19 votes through prox­ies, and was able to con­trol 60 per­cent of the par­tic­i­pa­tion quota, which gave him the ma­jor­ity ei­ther way. The min­i­mum quo­rum re­quired would have been 35 per­cent in this in­stance, said Bauer.

“There are pros and cons to own­ers be­ing al­lowed to do this, and while this will change in the fu­ture when the new act is pro­mul­gated, in the mean­time own­ers can use this vot­ing struc­ture in their favour. The new act will con­trol the vot­ing in lim­it­ing the num­bers each per­son can hold.

“There are, how­ever, pro­tec­tion mech­a­nisms for other as­pects of liv­ing in a sec­tional ti­tle scheme. Chang­ing the con­duct rules, for ex­am­ple, would need a spe­cial res­o­lu­tion and chang­ing man­age­ment rules would re­quire a unan­i­mous res­o­lu­tion. If res­o­lu­tions are passed that are seen to af­fect the pro­pri­etary rights of other own­ers, this can be taken to the High Court for re­lief,” says Bauer.

“Most own­ers don’t want to at­tend their gen­eral meet­ings, and will of­ten hand over a proxy if the per­son can­vass­ing for votes is con­vinc­ing.

“While it is good that own­ers com­mu­ni­cate with each other and are will­ing to en­sure that there is a quo­rum present at their AGMs by is­su­ing prox­ies, they must be mind­ful that the mo­tives for want­ing them will not jeop­ar­dise the man­age­ment of the scheme,” he says.

Michael Bauer is a con­trib­u­tor to www.sec­tion­alti­tlesa. co.za visit www.ihfm.co.za, call 083 255 4442 or email michael@ihfm.co.za

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