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WHAT ARE THE QUORUM REQUIREMENTS FOR SECTIONAL TITLE SCHEMES AND HOME OWNERS ASSOCIATION MEETINGS?

Category Advice

Meetings held in a community scheme environment between members or trustees, are subject to a quorum requirement to ensure that sufficient votes can be cast to pass a proposed resolution. Satisfying such quorum requirements for meetings is essential to ensure that the meeting proceedings are duly constituted and that all resolutions taken are binding. We elaborate on the quorum requirements in both a Sectional Title and Home Owners Association (HOA) environment.

SECTIONAL TITLE SCHEMES

  • Annual general meeting (AGM) of members

For schemes with less than four primary sections or a body corporate with less than four members, at least two thirds of the members need to be present (66.66% of members measured by their participation quotas).

For any other scheme at least one third (33.33% of the members measured by their participation quotas) need to be present at the meeting.

In both instances at least two members also need to be present at the AGM. In calculating the quorum members entitled to vote, present in person or by proxy, are counted.

Per section 6(5) of the Sectional Titles Schemes Management Act of 2011 one person may not act as a proxy for more than two members of the body corporate.

In accordance with Part 4 of the Sectional Titles Schemes Management Act Regulations, a proxy need not be a member, but must not be the managing agent or an employee of the managing agent or the body corporate.

  • Reconvened AGM of members

If the quorum requirements have not been satisfied at an AGM, the meeting is automatically reconvened to the following week at the same date, time and venue where only two members have to be present to satisfy the quorum requirements.

  • Special General Meetings (SGM) of members

For schemes with less than four primary sections or a body corporate with less than four members, at least two thirds of the members need to be present (66.66% of members measured by their participation quotas).

For any other scheme at least one third (33.33% of the members measured by their participation quotas) need to be present at the meeting.

In both instances at least two members also need to be present at the SGM.

  • Trustee meetings

Per Regulation 13 of the Sectional Titles Schemes Management Act, at least 50% of the trustees by number need to be present at a trustees meeting but not less than two.

Trustees cannot appoint a proxy to represent their attendance at a trustees meeting.

HOME OWNERS ASSOCIATIONS

  • Annual General Meetings

One needs to be careful when assessing the quorum requirements for Home Owner's Associations (HOAs), which are normally incorporated in two ways:

  1. In terms of the Companies Act

Where a HOA is incorporated under the Companies Act 71 of 2008, it is normally incorporated as a Non-Profit Company (NPC) with members where its title will end with the expression "NPC". The quorum requirements will be per the Memorandum of Incorporation (MOI) of the company. The MOI is normally prepared by the incorporation of the NPC and they can establish the quorum requirements as they deem fit.

The MOI should therefore always be consulted to determine the quorum requirements for a HOA registered as a NPC under the Companies Act 71 of 2008.

  1. In terms of a Constitution

In the event of a HOA being incorporated by means of a constitution document, the said document will contain the quorum requirements.

  • Trustees meetings in a Home Owners Association

The Memorandum of Incorporation (if registered as a Non-Profit Company in terms of the Companies Act) or the constitution document of the scheme needs to be inspected to see what the quorum requirements are.

For any further insight into community schemes please don't hesitate to contact one of our portfolio managers via phone (021) 4261026 or email colin@steer.co.za

Author: Johann Lotter

Submitted 25 Jun 19 / Views 1008