- The audited financial statements must be signed off by both the trustees and the auditor prior to circulating these to the owners. The time for trustees to debate and question items on the financial statements is prior to them being signed off. The AGM is the forum for owners to ask questions, not trustees. Too often we find trustees raising issues at the AGM, thereby creating doubt and uncertainty in the minds of owners, as to the correctness of the financial statements. The financial trustee should be able to present the financial statements to the meeting, knowing that he/she has the full support of the board.
- The budget is the responsibility of the trustees. Whitfields presents trustees with a basic budget which trustees must then modify to suit their specific requirements for the year ahead. The approved budget forms part of the annual report sent to owners. The financial trustee is responsible for presenting the budget to owners at the AGM. Any proposal to increase levies should be clear and unambiguous, and must be voted upon by the owners. Levies cannot be backdated as certain owners may have sold and clearance certificates may already have been issued.
- For sectional title complexes, the trustees should have a clear understanding of the insured value that they will be proposing at the AGM for the year ahead. A valuation should be done at least every 5 years, and in the interim years, the value should be increased in accordance with building price increases for that year. Your portfolio manager or insurance broker can assist you with appointing a registered valuer to value your complex.
- The chairperson of the board should run the AGM. Where the chairperson is unwilling or unable to do this, another trustee should perform this role. The role of Whitfields is to assist with the attendance register, apologies and proxies, advise on quorum requirements, and minute the proceedings. If you would like you portfolio manager to actively participate in the running of the meeting, please discuss this with them beforehand so that they are fully aware of your expectations.
- Don't allow discussions to go on for too long. It is not a requirement that everyone at the meeting must agree on every issue. Allow a reasonable time for discussion and then vote on a clearly worded proposal. Announce the result of the vote and move on to the next item. An AGM should generally be completed within one hour.
- Lastly, stick to the agenda. Don't allow individuals to hijack the meeting. When owners move off the topic, gently (or not so gently) bring the discussion back to the agenda item under discussion.
We are often asked how formal an AGM should be. Remember that an AGM is very often the only time that owners in a complex actually get together to talk about what is probably their biggest investment. We therefore favour a more informal type of meeting, simply because you are all neighbours seeking the same goal. Formality can often stifle discussion. You want owners to be able to speak freely and openly about the year gone by, as well as the year ahead, so that the incoming trustees can know what will be expected of them and where their focus should be. However, even in an informal environment, there needs to be proper control. The hardest part is finding the correct balance. GOOD LUCK!