What’s On The Agenda At The Annual General Meeting

red chairsEvery body corporate must hold an Annual General Meeting (AGM) within three (3) months of the end of financial year.

But what if you don’t actually have any business going on at present?

There are plenty of body corporate’s out there which are well managed and maintained and have few issues requiring works or owners input. Do they still need to hold an AGM?

Absolutely.

An AGM must be held every year and there is always going to be at least two items of business that require lot owners to vote:

  • issuing of levies for the next financial year
  • election of the committee

Statutory Motions At Annual General Meeting

Every body corporate must have an AGM and every AGM must include statutory motions to:

  • approve minutes of the last annual or extraordinary general meeting
  • present the previous year financial accounts (and auditors report if audited)
  • appoint an auditor for the next financial year, or alternatively, resolve not to audit accounts
  • adopt the administrative and sinking fund budgets for the financial year; and
  • fix contributions to be paid by owners for the next financial year
  • review insurance policies held by the body corporate for the year
  • elect a committee

ADOPT BUDGETS AND FIX CONTRIBUTIONS

A budget, a copy of which should be included in the Notice of Meeting, must be agreed at the AGM. The budget is basically a list of categories with estimations of how much the body corporate intends to spend. It’s all summed up in a figure at the end and that’s the total amount of outgoings to be considered.

The current account balances are then added, or subtracted, and the left over amount is how much is to be collected.

Converting the whole budget figure to levies is called fixing contributions. The full amounts are expressed as an amount per contribution lot entitlement per period.

The levies for each lot are then calculated by multiplying the lot entitlement by the contribution.

An example of how levies are expressed and calculated can be seen here.

What if you think the budget is too much?

If you, as a lot owner, think the budget is too much, or too little for that matter, you can propose a motion to change the budget at the AGM. However it can only be changed, either up or down, by 10%. The motion to change is voted on, and if everyone agrees, the budget is changed and then the meeting will vote on the changed amount.

If the majority lot owners decide the budget is unacceptable they can simply vote NO to the motion.

If a budget motion does not pass at an Annual General Meeting then an Extraordinary General Meeting will need to be called to set budgets. Budgets, and levies must always be set, even if the budget amount turns out to be zero.

TO AUDIT OR NOT TO AUDIT

There are always two motions at every AGM regarding audits:

  • to audit or not; and
  • if auditing, appointing an auditor.

These motions can cause a lot of confusion. The problems lie in the negative way the motion is presented. So rather than simply voting yes or no to an audit you’re actually voting yes or no to not audit.

The motion is posed negatively because of the way the legislation is interpreted. Legislation states every body corporate must be audited. But, the legislation also acknowledges that the owners may not wish to pay for said audit. They then have the opportunity to over-rule the legislation by voting YES to not audit.

A resolution not to audit must be a special resolution. Choosing not to audit the accounts is a big step; financial mismanagement or even dishonesty happens, so more than a simple 50/50 majority  of those voting is required.

Other Motions

It is possible that an AGM will only have statutory motions on the agenda. Other motions can and usually do get added. Most of those motions will be proposed by the committee to facilitate the issues currently in progress with the body corporate.

However any lot owner can submit a motion.

Motions submitted by lot owners will be included in the AGM agenda and voting paper exactly as they are submitted by the owner. That means any spelling mistakes, gramatical errors and more importantly issues with the legislation or enforceability will be included.

For instance, a motion to “repair the front gate” would be ruled out of order unless accompanied by at least two quotes to undertake the work. A motion to “keep an eye on tenants” would be ruled out of order because it is unenforceable.

Wording of motions needs to be very particular. A motion to “look at reducing costs” might pass however it’s very unclear how that would be implemented. A motion to “reduce the cost of garden maintenance by half in the next financial year by changing gardener” is much clearer and easy to both understand and carry out.

If you have an important motion that you would like the body corporate to consider it might be worth discussing with a solicitor to draft the motion.

Election of Committee

Once the vote is complete the current committee is deemed dismissed and voting for the new committee is counted and new committee elected.

The meeting is then closed. Minutes of the meeting are then sent to all lot owners within 14 days.

Comments

  1. Steve Was says:

    Can a Strata member include a report in an AGM Minutes when it was never discussed at a previous meeting? He claims that it is a Dissenting Report. Thank you. Steve

    • Hi Steve

      That’s an excellent question and I’m not sure of the answer.

      I have two thoughts on this subject. The first as to whether it’s technically correct, which is questionable. An owner wouldn’t be able to go “here, include this”. There’s specific rules about the submission and wording of motions. The committee could certainly add additional documentation. Either way I think it could be open to challenge if its relied on in passing or not passing motions.

      My second though is, legalities aside, what harm it will do to circulate additional information. Surely it’s in the schemes interest to see as much information as possible?

      Those are my thoughts. I hope its helpful.

  2. Warren Bray says:

    If the complex has a lot of works proposed to be done, and requiring large expenditure, is it voted on at a Body Corporate Committee Meeting, or should a General Meeting be called to allow the opportunity for owners to vote?

    • Hi Warren

      The committee may approve expenditure up to the committee spending limit. After that it must go to a general meeting.

      Works can’t be split up either. So if a project has several components all the components must be voted on together. The committee can’t split it up to vote on each individually within committee limit.

  3. Phillip House says:

    At our last meeting a unit owner voted and also gained proxy vote from a owner that lives in another country, her daughter had a proxy from another unit owner, so three votes in total. Is this allowed, remembering the one vote per unit (owners corp act, 91) and 89 Person not to require a lot owner to give power of proxy, for the purpose of voting.
    Also, Interim special resolutions or Special resolutions, if the vote in favour is less than 50% and the vote against is less than 25% will it pass after 29 days?
    thanks Phil

    • Hi Phillip

      Your question is a technical question regarding NSW strata legislation. My expertise is QLD so i am not the best person to answer.

      Try making your query on the Flat Chat Forum or Lookupstrata.com.au.

  4. Lyn Mattingley says:

    I recall reading somewhere that the motion for the appointment of a Body Corporate Manager must be the last motion on the agenda before the election of the Committee. Is that correct?

    • Hi Lyn

      No, I have not heard of that. The order for motions is 1) statutory motions 2) motions submitted by committee 3) motions submitted by owners 4) election of committee.

  5. If a body corporate chooses to audit, does there need to be an EGM to appoint an auditor, given that it is an ordinary resolution vote ? Or can the committee alone vote the best ( independent and qualified) auditor in, and avoid the expense and involvement of the strata management company ??

    • Hi Brent

      This is a restricted issue for committee, meaning the owners must vote on the appointment. They owners can however authorise the committee to appoint.

      There should be two motions on the agenda at the AGM … the first is whether owners wish to opt out of having an audit, and the second is appointment of the auditor. If there was not a motion to appoint auditor then you need to discuss with your strata manager. If there was a motion and owners voted NO, then yes, they will need to call an EGM.

      • Does the Body Corporate Manager have the right to delete owners from the follow up information emails on genaral business if they did not attend AGM.

        • Hi Pat

          I’m not sure what follow up email you’re talking about. There is no requirement for any email update about AGM follow up. Sounds like something that might be circulated to the committee.

          Generally speaking the body corporate will circulate AGM minutes to owners. That will be it until the next meeting is held, be it vote outside committee, committee meeting or next general meeting.

  6. Pat papaleo says:

    Does the Body Corporate Manager have the right to delete owners from the follow up information emails on genaral business if they did not attend AGM.

Trackbacks

  1. […] NEXT: What motions should be included at Annual General Meeting? […]

  2. […] year are proposed. The lot owners as a whole vote on whether or not to issue those levies at the Annual General Meeting […]

  3. […] of the subject body corporate, and until the next levies are issued, which will be at the next Annual General Meeting (AGM), which must be within three months of the end of […]

  4. […] Some body corporates struggle to form a committee whilst others have hotly contested ballots each Annual General Meeting. […]

  5. […] the committee has been elected at the Annual General Meeting they then are solely responsible for making decisions on behalf of the body […]

  6. […] meeting must follow the rules for notice and a Form 19 must be included (in most cases, refer to the Form 19 for […]

  7. […] once every year lot owners are called to vote on certain matters. Annual General Meetings include statutory motions that every scheme must consider plus anything else that any of the owners, or the Committee, feel […]

Speak Your Mind

*

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Facebook
RSS
Follow by Email