Many of the rules that apply to the passing of a special resolution for a sectional title scheme are often not fully understood by the trustees of the scheme, and this can lead to problems.

"Again and again, we have to point out that for a special resolution to be passed it is necessary that a quorum is present at a special general meeting and that the majority of no less than three-quarters of the owners reckoned by number and value must vote in favour of the proposed resolution," says Michael Bauer, GM of IHFM, a property management company.

"What is more, in most cases this has to be at a special general meeting for which the owners have received 30 days' notice in which the gist of the forthcoming resolution is explained."

Where the calling of a special resolution may not be possible or agreeable to owners, says Bauer, it is acceptable to get the resolution passed by means of a round robin letter. In these cases, again 75% of the owners (calculated by value and by number) have to have given signed approval of the resolution. However, even here the Prescribed Management Rules state that owners or others standing in for them can call for a special meeting within 30 days of the meeting at which the resolution was debated.

All postal communications for the canvassing of opinion have to be either hand delivered or sent by prepaid registered post to the owners of the units.

The question then, of course, arises, what happens if too few people attend the special meeting to obtain a quorum?

In these cases, the meeting has to be adjourned for one week and has to take place in the same place and at the same time. If once again at this subsequent meeting a quorum is not achieved, those present have the power to pass the special resolution.

For what matters are special resolutions required? Again, says Bauer, there are frequent misunderstandings on this matter, certain trustees apparently believing that a special resolution is needed for any change of the rules and conditions - but this is not so.

"Special resolutions are necessary where non-luxurious improvements are proposed. This is where changes in the contract rules are mooted, extensions of any section (i.e. the space within an individual's unit) are proposed, an exclusive use area is to be cancelled or added, a servitude is to be created, the value of an owner's vote or his levy contribution is to be changed, additional insurance risks are taken on, the developer is to be sued for claims, the managing agent's contract is to be terminated or if payment for services is to be made to trustees who are already owners.

For more information contact Michael Bauer on 083 255 4442 or click here to visit the website.

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