- There has been no AGM for 2 years;
- No one knows what’s going on with the Body Corporate’s finances; and
- The Trustees are doing exactly what they want!
Thankfully the Sectional Titles Act provides all the answers, but herein lies the rub: finding the answers and putting the provisions of the Act to work.
Let’s unpack Hannes’s problem:
1.
The Trustees are elected to perform a function, which they must perform properly in accordance with their fiduciary position. The Act lays down certain sub-minimum requirements that must be met by the Trustees, which include:
- collecting sufficient funds from members to attend to the repairs and maintenance of the common property;
- insuring the buildings to their full replacement value; and
- ensuring that the books of the Body Corporate are audited on an annual basis.
Just as Trustees are elected by members of a Body Corporate, so too can they be removed if in the members’ opinion they don’t perform their duties satisfactorily!
2.
The Management Rules say that the Trustees must convene an AGM within 4 months of the financial year end and ‘cause to be prepared’ and lay before the members audited financial statements for consideration by the members.
There are a number of other items of business that must also be discussed by members at an AGM. These include approving the budget for the ensuing year, assessing the insurance replacement schedule and of course the election of new Trustees.
3.
VERY IMPORTANTLY:
Management Rule 35 allows ANY owner access to all the Body Corporate’s books of account and records. But the Rule also says that an owner must specifically ask the Trustees to inspect the records.
So, we’ve established that Hannes, as well as each and every other unit-owner is entitled to go and see the books of account and records of the Body Corporate at any time on application to the Trustees.
What happens if the Trustees refuse to call an AGM and the owners want to remove the Trustees from office and elect new Trustees?
Management Rule 53 provides that owners who together form 25% of the total of the participation quotas of all the sections in the scheme must petition the Trustees in writing to convene a special general meeting, specifying the agenda. (In this case the agenda will be to declare a vote of no confidence in the current Trustees, remove them from office and elect new Trustees).
If the Trustees fail to call the meeting within fourteen days of the request, the petitioning owners can call the meeting themselves.
Good luck Hannes!
HAVE AN AWESOME WEEK!
