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In the realm of sectional title living, annual general meetings (AGMs) serve a pivotal role in the decision-making process, offering a platform for residents to voice their opinions and influence the community’s direction.
However, when you can’t be present in person, proxies step in as your trusted representatives but their roles and responsibilities have often been clouded in ambiguity.
We spoke to legal experts about the intricacies of proxies for AGMs, shedding light on their role, rules, and the power they wield.
Understanding the Basics
Henno Bothma, a seasoned litigation and dispute resolution attorney at Abrahams & Gross in Cape Town, lays out the groundwork, emphasizing that when it comes to selecting a proxy, the choices are wide open.
‘Anyone, except for the managing agent or employees of the body corporate or managing agent, can be appointed as a proxy. This means you have the freedom to choose someone you trust to represent your interests,’ he says.
However, there is a crucial twist. In some cases, your mortgage bond document may specify a proxy of the bondholder’s choosing, so it is essential to review your mortgage bond document to understand any such obligations.
The proxy appointment process
Botha goes on to explain that the rules governing proxies are designed to provide flexibility while ensuring fair representation. The nitty-gritty process of appointing a proxy is governed by Form C of Annexure 3 of the Regulations to the Act. To ensure a smooth proxy appointment, this form must be delivered to the body corporate more than 48 hours before the meeting or handed to the chairperson before the AGM commences. This timeline ensures that the body corporate has adequate notice of your proxy’s representation.
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Form C also offers flexibility. You can specify conditions and instructions for your proxy to follow during the meeting. For instance, you can instruct your proxy to vote in favour of certain agenda like approving Conduct Rules, while voting against others, such as alterations to specific sections. Without such instructions, the appointment is unconditional, giving your proxy full discretion to act on your behalf.
The power of your proxy
One significant aspect to consider is that a proxy can represent a maximum of two members at a time. However, the impact of this representation can be substantial, especially when members own multiple units or properties within the scheme. For instance, if a member holds two proxies on behalf of two other members, they are entitled to exercise three votes. This dynamic underscores the importance of selecting a trusted proxy that can wield voting power effectively.
‘Additionally, it’s worth noting that even if you own multiple units or properties within the scheme, you are only entitled to appoint one proxy. This proxy then exercises your voting rights on your behalf for all your units, simplifying the process,’ explains Karien Coetzee, a sectional title expert at Trafalgar.
Coetzee also points out that Section 6 of the Sectional Title Schemes Management Act (STSMA) stipulates that a person cannot act as a proxy for more than two members of the body corporate. Importantly, this rule applies to members, not sections. So, whether you own one or ten sections, you can only give one proxy.
‘This limitation can impact the voting process at AGMs. If you don’t attend the meeting and don’t appoint a proxy, your vote is effectively lost, making it more challenging to pass resolutions,’ she adds.
The duration
The prescribed proxy form of the Act allows you to specify the proxy’s duration, but there are generally two options. You can either give a proxy for one specific meeting (including any adjournments) or for all meetings up to a specified date. This flexibility ensures that you can tailor the proxy’s role to your preferences.
So, the next time you find yourself unable to attend an AGM, remember the power of the proxy.
Choose wisely, communicate your preferences clearly, and rest assured that your voice will still be heard in shaping the future of your sectional title community.
