Sectional title corner – How do we out-vote the developer?
Please can you clarify the new sectional title rules which apply to commercial units. We have 100 units in our light industrial complex in Mossel Bay. Some 30 of the units are owned by the original developer and he is represented by an estate agent at our regular AGM meetings. This estate agent is also our chairman.
For years now the other owners (myself included) have never been able to change anything as the estate agent has 30 proxies and whatever he says goes. We need to fix and maintain so many things in the complex but they never get done and as such we would like to change the management.
My question is that with the new rules, does the estate agent still have 30 votes or is this now reduced to a maximum of TWO votes?
Most of the owners don’t even bother to attend the AGM meetings anymore as they are always out-voted, but we want to change this. – Errol
Hi Errol, sectional title is sectional title no matter what the zoning is of the complex – it can be residential, commercial, industrial or even a combination of these.
With regards to your question, with the new act it is stipulated that a person cannot hold more than two proxies from members. No matter how many sections you own you are just one member so if you own four sections and give me your proxy and Andrew owns two sections and gives me his proxy, it is still just two proxies that I can keep.
What you need to do is check who is the registered owner of these 30 sections. If it is all in the name of ABC Pty Ltd (the developer) then there is not much you can do. But if it is registered to several different entities then the two proxy rule will apply.
Unfortunately there is a way around this: If the developer gives his agent Power of Attorney then it does not count as proxies.
All votes per the act (except for special resolutions) are counted by value participation quota (PQ); it is only special resolutions and the quorum determination for unanimous resolutions that are taken in value and in number. In number means one member one vote and in value means the PQs (then all the PQs of all my sections count).
For a special or unanimous resolution the act states that any owner unable to obtain this can go to the Ombud for relief, but this unfortunately does not apply to ordinary resolutions.
You must just lobby for votes and motivate the other 70 owners to attend meetings as they have the majority then.
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Who is Karien Coetzee?
Karien Coetzee is the national property management consultant at property management company, Trafalgar. She holds qualifications in sectional title schemes management and homeowners association management.