Consent levels in sectional title schemes

01 August 2014

The majority of people who buy into sectional title schemes are completely unaware of their rights as members of the body corporate, and an offer to purchase should never be signed until they have full knowledge of what the scheme’s rules are, how well it is run and who is managing the scheme, says Lanice Steward, managing director of Knight Frank Residential SA.

Prospective buyers should insist that the agent selling a sectional title unit provide them with copies of the scheme’s conduct rules, the financial reports for the last year, the last AGM minutes and the name of the managing agent if there is one, said Steward.

The cost of running a large sectional title block is becoming increasingly expensive, and in order to allow the trustees to carry out the necessary maintenance or non-luxurious improvements to the common property, as opposed to the luxurious and less necessary improvements, there are different levels of consent needed.

For luxurious improvements, the unanimous resolution of the body corporate is required and for non-luxurious improvements, the trustees must give the owners 30 days’ notice of what improvement is necessary, the cost and the why it is they want to ahead with the job.
If a member of the body corporate does not agree, they can ask for a special general meeting where the matter will be discussed and put to vote. If the trustees want to go ahead with a non-luxurious improvement, a special resolution will have to be passed at the meeting and 75% of the owners must vote for the same resolution.

It must also be remembered that at all meetings, whether the AGM or a SGM, a quorum (a minimum number) is necessary for the meeting to commence and they must be there for the whole meeting. If an owner is not able to attend he can appoint a proxy but he cannot appoint a managing agent, an employee of the MA or an employee of the body corporate as his proxy.

The quorum percentages differ according to the size of the scheme and are as follows:
• Schemes with up to 10 units - 50% of owners;
• Schemes with 11 - 49 units - 35% of owners;
• Schemes with over 50 units - 20%; and
• At meetings where a unanimous resolution will be taken - the quorum increases to 80%.

If after 30 minutes a quorum is not present, the meeting stands adjourned until the same time and at the same place the following week. All the owners of the complex must be notified of the adjournment and of the rescheduled meeting. If at the rescheduled meeting a week later a quorum is not present within half an hour, the people present constitute a quorum, regardless of how few people are present, as long as there are at least two people.

It should also be remembered, said Steward, that at AGMs or SGMs, no matter how many people are present, minutes must be documented by the secretary.