Disqualifications

Owner meetings
The right to vote is one of the normal consequences of membership of an association. An owner of a unit in a sectional title scheme is automatically a member of the body corporate and will usually have the right to vote at all of its general meetings either personally, by proxy or through another legally recognized representative.

However an owner's right to vote at general meetings may be limited by prescribed management ("PMR") 64 in certain circumstances. It provides that an owner may not vote for ordinary resolutions at general meetings if:

any contributions payable by him in respect of his unit have not been paid, and/or
he has persisted in breach of any of the conduct rules applicable to the scheme despite having received written warning from the trustees or the managing agent to refrain from such breach.

Therefore an owner hit by the provisions summarised in 1 or 2 may not personally cast a vote for ordinary resolutions at general meetings. However it is important to note the following:

such an owner can still vote for any special or unanimous resolution; and
that owner's bondholder is still entitled to vote as his proxy in respect of ordinary resolutions while he is disqualified.

PMR 64 is the only provision in the Sectional Titles Act, 1986, ("the Act") and prescribed rules that in any way limits an owner's right to vote at general meetings. There is a common misconception that owners should recuse themselves from voting when they have a personal interest in the outcome of a body corporate vote. This is not the case. There are many situations in the sectional title context where the outcome of votes does directly affect the proprietary and other interests of the owners concerned and in these instances there is no expectation in the Act or the prescribed rules that owners should recuse themselves from the voting simply because they will be affected by the outcome.

Trustee meetings
In the context of trustee meetings, PMR 15(5) provides that owners are entitled to attend and speak but are not, in their capacity as owners, entitled to vote at these meetings.

The prescribed rules also contain a provision that can operate to disqualify trustees from voting at trustee meetings. PMR 23 provides that if a trustee has any interest in a contract or proposed contract, or in any litigation or proposed litigation, with the body corporate, he may not vote in respect of a decision relevant to that contract or litigation.

If you would like to learn more about the legalities of sectional title meetings, Paddocks now presents the 5-week part-time Law of Sectional Title Meetings Course. This course is presented nationally and is well suited to attorneys, managing agents as well as unit owners and trustees. Please contact Deborah on 021 674 7818 or deborah@paddocks.co.za.

Leave a comment:

Search Articles