When should my AGM be?
We have been asked for help lately by multiple corporations who have noted that their managers are holding their Annual General Meetings outside of the required time-frames.
For Strata Titled properties, Section 33 (4) of the Strata Titles Act 1988 states: The corporation must hold at least one such meeting (the annual general meeting) in every calendar year and no more than 15 months after the last such meeting
The idea is that the meetings need to be held when the financial statements of the corporation are still relevant and should levies need to be increased then this can be done promptly.
Given that most corporations raise funds through quarterly levies it is common that the first levy raised in the new financial year be at the rate set at the last meeting. By calling the meeting on time it stops the corporation from having two levies raised at the old rate in the event that an increase in contributions is required.
For a Community Titled property, Section 82 governs the calling of meetings (1) The annual general meeting of a primary community corporation must be held within three months after the commencement of each financial year. (2) The annual general meeting of a secondary or tertiary community corporation must be held within 6 months after the commencement of each financial year.
Some Community Corporations exist as complex schemes with corporations inside corporations. This is the case for many multi-storey buildings where the ground floor commercial and common carparking areas are a part of the primary corporation and the upper floor residential apartments are then a secondary corporation.
The reason for the extended timeframe here for the secondary corporation is that a large component to their expenditure are the contributions toward the primary corporation where the secondary is an owner. This runs just like any other meeting whereby the secondary corporation has the right to attend and cast a vote on matters including the budget and setting of contributions.
One of the smaller secondary corporations I assist has a $65,000 annual budget but $55,000 of their expenditure is the contribution to the primary corporation through their quarterly levies. In this case the primary pays for the lift, cleaning, insurance, fire protection, water and electricity and it would make no sense for the secondary meeting to be held until the primary corporation has determined what its budget is, as should the primary budget increase so to would the contributions required to be paid by the secondary.
If your corporation is just one body corporate as is the case for 90% of corporations including most townhouse developments and land divisions created under the Community Titles Act 1996, then the plan will say the word PRIMARY in the top right hand corner and section 82(1) applies where the meeting needs to be called within three months of the start of the new financial year.
Where managers are holding meetings outside of these time frames it shows a lack of knowledge of the legislation and possibly care or interest in their job which is disappointing.
In the case of one corporation which we are now assisting, their former managers closed their financials at the end of October 2017 and then proceeded to call the Annual General Meeting for April 2018, by which time 1/2 of the year had gone by and with the corporation needing to address under-budgeting by that manager the corporation was left with very little funds in their account.
If you have any questions or have noticed that your manager struggles to care enough about your corporation to call the meetings when they are relevant please feel free to give us a call on 8350 5699, we are here to help.
