No Quorum No Problem – Interim Resolutions
By Jennifer Paddock
Getting a quorum for an AGM or SGM can be as hard as finding a sectional title scheme without a VIP (Very Impossible Person! – Ok, I admit I stole that term from a colleague, but it’s too good not to share!!).
Our legislation tries to address this widespread owner apathy by providing an automatic adjournment provision in Prescribed Management Rule 58. It states that:
- if a quorum is not present within half-an-hour of the appointed meeting time
- the meeting is automatically adjourned to the same day in the next week at the same place and time,
- and if at the adjourned meeting a quorum is not present within half-an-hour of the time appointed for the meeting, the owners present in person or by proxy and entitled to vote form a quorum.
Other jurisdictions address this issue differently and having worked in strata title in Victoria, Australia and having worked in sectional title here in South Africa I can tell you that…
I think the Aussies have a Better Idea…
Interim Resolutions!
The Owners Corporations Act 2006 provides that should a quorum not be present for an AGM, the meeting can proceed but all resolutions passed at the meeting are ‘interim resolutions’.
It requires that notice of the interim resolutions passed at the meeting as well as the minutes of the meeting must be forwarded to all owners within 14 days of the meeting and the minutes must be accompanied by a statement notifying all owners that:
- Interim resolutions become resolutions of the body corporate 29 days from the date they were taken and can then be acted upon, unless
- notice of a SGM is given within that 29 day period in which case the interim resolutions need to be confirmed at the SGM if held within 28 days from the date notice of the SGM was given,
- and if the SGM is not held within 28 days from the date of notice of the SGM, the interim resolutions automatically become resolutions of the body corporate at the end of that 28 day period.
It sounds complicated but the effect is beautifully simple – interim resolutions become resolutions of the body corporate and can be acted upon 29 days after they are made should no SGM be called. The interim resolutions are effectively suspended for the 29 day period to give owners a chance to be notified of them and, if necessary, object through requisitioning a SGM.
The Owners Corporations Act also makes provision for interim special resolutions that allow special resolutions to be taken in a similar manner, but with higher levels of consensus required.
So the question on my lips is could a body corporate in South Africa amend PMR 58 to remove the provision for automatic adjournment when a quorum is not present and insert a provision, similar to the one set out above, allowing for interim resolutions to be taken?
After having discussed this issue with the other sectional title experts at Paddocks we think it can be done fairly easily for ordinary resolutions, but it would be trickier, although not impossible for special resolutions. It would all come done to the wording of the rule – which of course we’d recommend you have drafted by a specialist sectional title attorney 🙂
What do you think about this concept of interim resolutions? Would it beneficial for schemes in SA? Share with us by commenting below.
Image source: http://www.toxicards.com
Thinking Inside the Box 
What is your opinion on the silence of PMR 58 regarding the reissue of the notice for those who did not make it for the initial meeting which did not form a quorum.
Dear Mr George,
Thank you for your comment. We are more than happy to help, however we do not give free opinions / advice. Please email us on consulting@paddocks.co.za with regards to your matter, and we can provide you with a no-obligation quote, so that we can assist you.
Kind regards,
Paddocks
I feel there’s 2 main reasons for owner apathy.. the first being real apathy where owners really aren’t interested / or aware of what owning property means to them or their loved ones presents, and futures. The second is more destructive where such apathy, laziness etc. occurs within the trusteeship itself – where the trustees can and do sideline, and cut off certain owners from communications, services etc.
This may be construed as ‘apathy’ by some owners, or even by trustees, saying “ag they won’t come to the meeting” etc. They somehow fail to see what their own attitudes, or poor management styles have (or have not) achieved for the complex, and the owners concerned. On the surface It may seem that some owners are apathetic, or it may appear that such trustees are in it for themselves, and don’t particularly like proactive types – especially those that challenge the ‘status-quo’. In such cases these owners may feel that since their ideas are unappreciated or that certain personalities will be present that there’s no point attending such an AGM.
I love this idea i just hope the Regulation Board members are reading your Blog! They tend to be very quick adding in bad amendments and very slow to rectify their mistakes or add in decents amendments.
We have an attendance prize of R250 which is budgeted and this goes to an owner whose number is pulled out of the hat.
This increased attendance from just the trustees attending the AGM (6) to 15 attending the meeting. There is more than one way to ………………
Hi Jenn,
I think it’s a great way of dealing with AGM apathy. Would be nice to have the proposed rule ! We will pay !
Haha Sean! We can definitely assist you with that if you are really interested? We’ll chat tomorrow in any event!
I think the amendment of PMR 58 would be a Godsend! Yes, personally I would in favour of this for normal AGM. I agree that Special and Unanimous Resolutions may be a bit trickier especially as the practice may be open to abuse especially for decisions which could seriously prejudice some owners, and of course it should not be forgotten, in the case of UR, the written consent of owners is required if there occupational rights are prejudiced.
Sounds a good idea in principle. But would it work in this country . . .? I feel it might be open to manipulation by unscrupulous trustees and/or MAs (and reading all the questions on sto/co/za one realises that there are some of them around). The process of circulating the interim resolutions, and ensuring that a follow-up SGM is held if necessary, would require a lot of policing.
Hi Ian, the graphic is meant to be a bit of fun – no offense intended I can assure you!
Jennifer, I vehemently object to the SEXIST graphic.