The way the Sectional Titles Act currently stands, if a trustee wants to swing a vote in his or her favour by collecting proxies to vote at a general meeting, it is possible to do so. “If that owner has a particular agenda, whether good or bad, they have the means to go ahead with their plan,” says Michael Bauer, GM of IHFM property management company. “In a recent case we encountered, one owner managed to canvass throughout the complex and collect 19 votes via proxies, and was able to control 60% of the participation quota, which basically gave the owner the majority either way. The minimum quorum required would have been 35% in this instance.”
While that scenario will change when the new Act is promulgated, owners can use this voting structure in their favour now. The new Act will control the voting block by limiting the numbers each person can hold.
Protection mechanisms exist for other aspects of sectional title scheme living. Changing the conduct rules, for example, requires a special resolution. Changing management rules requires a unanimous resolution. If resolutions are passed that are seen to affect the proprietary rights of other owners, these can be taken to the High Court for relief.
The rub? Many owners don’t want to attend general meetings and will often hand over a proxy if the person canvassing for votes is convincing. Says Bauer: “Owners should communicate with each other to ensure there is a quorum present at their AGMs by issuing proxies and be mindful that these are given for the right reasons so the motives for wanting them will not jeopardise the management of the scheme.”