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What is so special about a Special General Meeting for a sectional title scheme?
12 September 2016
 

“I have been appointed as a trustee for our new sectional title scheme. I understand the requirements for calling an annual general meeting, but I am a bit worried about when we should hold special general meetings in the scheme. I just don’t what to make a mistake.”

There are two types of meetings that can be held in a sectional title scheme, namely an annual general meeting (“AGM”) and a special general meeting (“SGM”), with the AGM probably the most important of the two.

The SGM comprises of all other general meetings held in the scheme that is not an AGM. A SGM may be called by the trustees whenever they think fit, and must be called upon a written request made by owners entitled to 25 percent of the total of the participation quotas of all sections, or by any mortgagee holding mortgage bonds over at least 25 percent in number of the units in the scheme. Should the trustees fail to call such a meeting within 14 days of being so requested, the owners or mortgagee concerned shall be entitled to call the meeting themselves.

The standard period for giving notice for a general meeting is 14 days, but should there be a unanimous or special resolution that must be taken at a general meeting, the notice period is increased to 30 days. The notice must specify the place, the date and the time of the meeting and must be given to all the owners, all holders of registered mortgage bonds over the units and the managing agent. The 30 day notice period for the passing of a unanimous or special resolution at a SGM may however be reduced if, in the opinion of the trustees, it is necessary due to the urgency of a matter or due to the specific nature of a matter. 

The most common reason for the SGM is to adopt a unanimous or special resolution in writing.

A unanimous resolution is passed by at least 80 percent of all the members of a body corporate reckoned in number (by putting up of hands) and all the members reckoned in value (by looking at an owners participation quota) of all owners present at the meeting or represented by proxy or a representative of such member at the meeting. It usually involves a decision needed for among others, luxurious improvements, changes to the management rules, alienation or lease of part of the common property, etc.

A special resolution is passed by at least 75 percent of all the members of a body corporate reckoned in number (by putting up of hands) and all members reckoned in value (by looking at an owners participation quota) of owners present at the meeting or represented by proxy or by a representative of such member at the meeting. It usually involves among other a decision needed for non-luxurious improvements, claims against the developer, changing or cancelling of exclusive use areas, changes to the conduct rules, termination of the managing agents contract, extending of a unit, contributions to the levy fund etc.

A SGM may not proceed if a quorum is not present within half an hour from the time set for the meeting. In the instance where the quorum is not met the meeting will stand over to the same day in the next week at the same place and time. Should a quorum not be present within half an hour of the second meeting then the owners present in person or represented by proxy and entitled to vote shall form a quorum.

A quorum at a SGM shall be: 

Schemes with up to 10 units or less = owners or representatives holding at least 50 percent of the votes. 
Schemes with less than 50 but more than 10 units = owners or representatives holding at least 35 percent of the votes. 
Schemes with 50 or more units = owners or representatives holding at least 20 percent of the votes.

Importantly, always make sure that you comply with the notice period and the quorum before any resolutions are taken at the SGM. If you are not sure about the compliance requirements, make sure you obtain the assistance of a property specialist to make sure that all your SGM meeting procedures are met and valid decisions are taken.

 
 
 
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