Your Annual General Meeting is more than a meeting on the calendar. It is one of the most important opportunities you have as an apartment owner to understand what is happening in your building and have a say in its future.
For many apartment owners, the Annual General Meeting – or AGM – can seem a little intimidating.
There may be a lengthy agenda, financial statements to consider, motions to vote on, committee positions to fill and plenty of terminology that isn’t always easy to understand.
But an AGM doesn’t need to be complicated.
At its heart, an AGM is an opportunity for the owners of an apartment building to come together, review the year that has passed, consider the financial and operational position of the corporation, make decisions about important matters and determine who will help manage the corporation going forward.
For apartment owners in South Australia, understanding how AGMs work is an important part of being an informed and involved owner.
What Is an AGM?
An Annual General Meeting is a formal meeting of the members of a strata corporation.
South Australian strata corporations must hold at least one general meeting – the AGM – in every calendar year and no more than 15 months after the previous AGM.
The AGM gives owners the opportunity to consider important matters affecting their building and participate in decisions that require the corporation’s approval.
It is also an important opportunity to ask questions.
If you own an apartment, the AGM is your opportunity to have your voice heard.
Why Should Apartment Owners Attend?
It can be tempting to think:
“I’ll leave that to the committee.”
Or:
“The strata manager knows what they’re doing.”
But your building belongs to its owners.
The management committee and any professional manager are there to assist with the administration and management of the corporation – they do not replace the owners.
Decisions made by the corporation can affect your finances, your building, your lifestyle and potentially the long-term value of your property.
That makes participation important.
Even if you don’t want to serve on the committee, attending the AGM can help you understand:
- How your building is being managed
- How your money is being spent
- What maintenance is planned
- What major issues are being considered
- What contracts and services are in place
- What decisions owners are being asked to make
- Who is responsible for managing the corporation
What Happens at an AGM?
Every strata corporation is different, and the exact agenda will depend on the circumstances of the building.
However, the AGM will generally involve consideration of matters such as the corporation’s financial position, insurance, expenditure, appointments and other business requiring owner decisions.
South Australian requirements also provide for specific matters to be included on an AGM agenda, including appointments, insurance and certain expenditure and reporting matters.
The meeting will generally begin by confirming the minutes of the previous general meeting.
If this is your first AGM, don’t worry if the terminology seems unfamiliar.
You will quickly become accustomed to the way your particular building conducts its meetings.
What Should You Receive Before the AGM?
An AGM cannot simply be called without notice.
For a South Australian strata corporation, at least 14 days’ written notice must generally be given to all unit holders. The notice should include the date, time and place of the meeting and the agenda.
The agenda is particularly important.
It tells owners what matters are going to be discussed and, importantly, what matters may require a vote.
If a special or unanimous resolution is proposed, the relevant resolution must be included in the meeting agenda.
Read the agenda before the meeting.
If there are documents attached, read those too.
The more informed you are before you arrive, the easier it will be to participate.
What Is a Quorum?
A quorum is the minimum number of owners who need to be represented before the meeting can formally conduct business.
For a South Australian strata corporation, the initial quorum is generally owners representing at least half of the voting power of the units. Owners may be represented in person, by valid proxy and, where applicable, through remote communication.
If a quorum is not present within 30 minutes, the meeting must generally be adjourned and reconvened between seven and fourteen days later.
If a quorum is still not present at the adjourned meeting, those who are present and entitled to vote can constitute the quorum.
This is one reason it is important for owners to respond to AGM notices and either attend or properly appoint a proxy if they cannot attend.
Can Someone Attend and Vote for Me?
Yes.
A unit holder can appoint another person as their proxy, subject to the requirements applying to proxy appointments.
A proxy is someone who is authorised to attend the meeting and exercise voting rights on behalf of the owner.
If you cannot attend your AGM, don’t simply ignore the meeting.
Find out whether you can appoint a proxy and make sure the necessary paperwork is provided correctly and within the required timeframe.
What Is the Financial Information About?
The financial side of an AGM is extremely important.
Your strata corporation needs money to operate and maintain the building.
Owners’ contributions may be used for matters such as:
- Building insurance
- Cleaning
- Gardening
- Electricity and other services
- Repairs
- Maintenance
- Professional fees
- Management costs
- Major building works
- Other corporation expenses
An expenditure statement must be presented at each AGM. It includes estimated recurrent and non-recurrent expenditure for the current financial year, as well as estimated future expenditure for which funds should be raised and held in reserve.
For larger strata corporations, forward budgeting can be particularly important.
For example, a strata corporation with more than 20 units and common-property improvements insured for $100,000 or more must generally present a forward budget covering proposed non-recurrent expenditure over a five-year period.
This is important because major building expenses rarely arrive at convenient times.
Good financial planning allows owners to anticipate future expenditure rather than continually reacting to emergencies.
Why Should You Look Carefully at the Budget?
When considering your building’s budget, don’t only look at whether your levies are going up or down.
Ask why.
Are maintenance costs increasing?
Is major work planned?
Are insurance premiums increasing?
Are there ageing lifts, roofing, waterproofing, fire systems or other infrastructure that may require attention?
Are sufficient funds being set aside for future expenditure?
A low levy may look attractive today, but underfunding the building can simply move the financial burden into the future.
Good strata management isn’t necessarily about keeping levies as low as possible. It’s about managing owners’ money responsibly.
What About Insurance?
Insurance is an important AGM consideration.
A strata corporation has obligations regarding insurance, and the appropriate policies should be considered as part of the corporation’s ongoing management.
Owners should understand what the corporation’s insurance covers and, just as importantly, what it does not cover.
Your individual contents, improvements or other personal interests may require separate insurance.
If you are uncertain about your insurance position, obtain advice from an appropriately qualified insurance professional.
Electing the Management Committee
The AGM can also be an opportunity to appoint or elect members of the management committee.
The management committee can play an important role in the ongoing administration of the corporation.
Committee members may become involved in matters such as:
- Building maintenance
- Financial decisions
- Contracts
- Repairs
- Insurance
- Owner communications
- Strata management
- Planning for future expenditure
- Addressing issues within the building
Being on a committee can be rewarding, but it also comes with responsibility.
If you are considering volunteering, make sure you understand what is involved and have sufficient time to participate properly.
Don’t Be Afraid to Ask Questions
One of the most valuable things an owner can bring to an AGM is a willingness to ask sensible questions.
If you don’t understand something, ask.
For example:
“Why has this expense increased?”
“When was this maintenance last carried out?”
“Is this work common property or the responsibility of an individual owner?”
“Do we have enough money set aside for the anticipated work?”
“What does this contract cover?”
“How long does this contract run?”
These are reasonable questions.
You don’t need to be an accountant, lawyer, builder or strata expert to take an interest in your building.
Read the Minutes
The minutes of previous meetings are an extremely useful source of information.
They can tell you what issues have previously been raised, what decisions have been made and what matters may still be outstanding.
If you are a new owner, reading previous minutes can be one of the quickest ways to understand the history of your building.
It can reveal recurring issues that might otherwise not be immediately obvious.
What If You Disagree With a Decision?
Apartment owners will not always agree.
That’s part of living in a community of people with different priorities, circumstances and opinions.
A healthy strata community should allow owners to express different views respectfully.
The fact that a motion doesn’t go the way you wanted does not necessarily mean the meeting was unsuccessful.
The important thing is that the appropriate process was followed, owners had an opportunity to participate and the decision was properly made.
South Australian strata law provides different voting requirements depending on the nature of the decision, including ordinary, special and unanimous resolutions.
If a particular motion has significant legal or financial consequences, owners should obtain appropriate professional advice where necessary.
Don’t Leave Everything to the Strata Manager
A professional strata manager can be an extremely valuable resource.
However, apartment owners should not assume that the strata manager is responsible for making every decision.
The corporation remains the owners’ collective organisation.
Owners should understand what has been delegated to their manager and what remains the responsibility of the corporation or management committee.
An informed owner is in a much stronger position to work effectively with a strata manager.
Make the Most of Your AGM
Before attending your AGM, consider making a short list of questions.
Your AGM checklist
- Read the meeting notice and agenda.
- Read any financial information provided.
- Review previous meeting minutes.
- Consider any proposed motions.
- Write down questions you want answered.
- Check whether you need to appoint a proxy.
- Consider whether you would like to nominate for the management committee.
- Attend the meeting prepared to listen as well as speak.
- Keep discussions respectful and focused on the interests of the corporation.
Most importantly, participate.
Your AGM Is Your Opportunity to Have a Say
Apartment ownership comes with rights – but it also comes with responsibilities.
One of those responsibilities is taking an interest in the way your building is governed.
The AGM is one of the most important opportunities each year for owners to do exactly that.
It is where owners can review the past year, consider the future, ask questions, vote on important matters and help determine how their building will be managed.
You don’t have to be an expert.
You don’t have to agree with everyone.
You don’t even have to join the committee.
But if you own an apartment, your voice matters.
A Stronger Voice for Adelaide Apartment Owners
The Adelaide Apartment Owners Association was established because apartment owners deserve a collective voice on the issues that affect apartment living.
AAOA is committed to encouraging informed apartment ownership, sharing knowledge and advocating for the interests of apartment owners across the City of Adelaide.
As our Association grows, we want to hear from apartment owners about the issues that matter to them.
Your experience matters. Your questions matter. And your voice matters.
If you are an apartment owner in Adelaide, we invite you to become part of the Adelaide Apartment Owners Association and help shape the future of apartment living in our city.
Attend your AGM. Ask questions. Get involved. And have your say.
This article provides general information only and is not intended to constitute legal advice. Strata arrangements and individual circumstances can vary. Owners should refer to the legislation, their corporation’s rules and meeting documentation and obtain independent professional advice where appropriate.