Voting disqualifications in sectional title schemes
Understanding Voting Disqualifications in Sectional Title Schemes
As owners of units in sectional title schemes become more knowledgeable about the Prescribed Management Rules (PMRs) under the Sectional Titles Schemes Management Act, scheme managers need to stay ahead to ensure compliance and avoid disputes. Solver Property Services, specialising in community scheme management for Body Corporates and Homeowners Associations, is here to help you navigate these regulations. This article explores voting disqualifications in sectional title schemes and their impact on quorum requirements.
Voting Disqualifications for Owners
PMR 20(2) outlines specific situations where an owner's right to vote on ordinary resolutions is revoked:
Non-Payment Despite an Order:
If an owner fails to pay amounts due to the body corporate despite a court or adjudicator's order, they are disqualified from voting on ordinary resolutions. This disqualification only applies if there is an outstanding order, and the owner continues to refuse payment. Owners in arrears without a formal order can still vote on all resolutions.
Continued Breach of Conduct Rules Despite an Order:
If an owner continues to violate conduct rules despite a court or CSOS adjudicator’s order to cease, they are barred from voting on ordinary resolutions. This applies only if there is a formal order, and the owner persists in breaching the rules.
It's important to note that these disqualifications do not affect an owner’s right to vote on special and unanimous resolutions.
Voting Disqualifications for Trustees
PMR 14(3) specifies circumstances where trustees cannot vote:
Direct Involvement in a Contract or Dispute:
Trustees are disqualified from voting on any contract or dispute involving the body corporate if they are directly involved.
Personal Interest:
Trustees cannot vote on matters where they have a direct or indirect personal interest, to prevent conflicts of interest and ensure unbiased decision-making.
Voting Disqualifications for Developers
PMR 16(3) restricts developers from voting on certain motions at the first general meeting of a new sectional title scheme:
Financial Approvals:
Developers cannot vote on motions to approve evidence of income and expenditure, financial statements, and ratification of contracts entered into on behalf of the body corporate.
Document Handover Confirmation:
Developers are barred from voting on motions confirming they have provided all required documents to the body corporate.
Votes of Sections Owned by the Body Corporate
PMR 20(3) states that votes associated with sections registered in the body corporate’s name are considered abstentions and do not count. This ensures decisions reflect the will of the individual members, not the body corporate itself.
Impact on Quorum Requirements
Voting disqualifications impact quorum calculations:
Quorum Calculation:
PMR 19(2) specifies that only members entitled to vote are counted for quorum purposes. Disqualified members are excluded from this count.
Exclusion of Developer and Body Corporate Votes:
PMR 19(2) and (3) also exclude votes associated with sections registered in the name of the body corporate or the developer when establishing a quorum.
Conclusion
Understanding voting disqualifications is crucial for ensuring that general meetings are properly constituted and that body corporate resolutions are legally binding. At Solver Property Services, we are committed to helping you navigate these complexities, ensuring compliance, and fostering effective management within your community scheme.
Disclaimer: Kindly note that the above article is merely for information and is not intended to be comprehensive nor to provide legal advice. Solver Property Services, its employees and agents can in no way be held liable for the accuracy or otherwise of the contents of this article, or for the consequences of any action taken or not taken by any person or organisation based on the contents herein.
For more information, please contact 010 822 2882. Solver Property Services has a team of experienced Property Managers / Managing Agents that can assist you. We have 200 complexes that we manage across Gauteng (Alberton, Bedfordview, Greenstone, Boksburg, Benoni, Bryanston, Midrand, Sandton, Lonehill, Roodepoot, Pretoria, Kempton Park, Riviera, Edenvale, Fourways Vaal Triangle etc are just a few areas that are covered). Solver Property Services are considered Gauteng’s preferred managing agents.
