Your Voice Matters: Key Questions to Ask at your Body Corporate AGM

For homeowners in sectional title schemes, the Annual General Meeting (AGM) of the Body Corporate is a crucial event. It's your primary chance to understand how your complex is managed, voice concerns, and participate in decisions affecting your investment and lifestyle. 

Harcourts South Africa stresses the importance of active participation and being prepared with the right questions.

Attending your AGM isn't just a formality; it's about exercising your rights as a sectional title owner. Understanding your scheme's financial health, maintenance plans, governance, and compliance is vital for protecting your property's value and ensuring a well-run community.

Richard Gray, CEO of Harcourts South Africa, highlights these meetings' significance. "The AGM is key to good governance in sectional title living. Transparency should be paramount, and owners can hold trustees accountable and contribute to the scheme's success," says Gray. "Thoughtful questions can significantly improve management quality and the complex's long-term health."

So, what should you ask? Harcourts South Africa suggests focusing on these areas.

Financial Health & Budgeting:
Understanding scheme finances is vital. Don't just skim financial statements; delve in.

"Explain significant variances between budgeted and actual spending last year?" This identifies over/under-spending and reasons.

"How are levy arrears managed? What's the current arrears percentage?" High arrears impact cash flow.

"Is the proposed budget realistic and sufficient for operational costs and reserve fund contributions?"

"What's the reserve fund balance? Is it adequate for the 10-year maintenance, repair, and replacement plan (MRRP)? When was the MRRP last updated?" The reserve fund is critical for major projects, preventing large special levies.

"Financial scrutiny is non-negotiable," Gray advises. "Owners need confidence that levies are managed prudently and the scheme is financially sound. A well-funded reserve fund, aligned with an updated MRRP, marks a well-managed scheme."

Maintenance & Upkeep:
The complex's condition impacts property values and quality of life. Ask questions such as the following.

"What major maintenance was completed last year, and was it within budget?"

"What major maintenance is planned for next year per the MRRP? How will it be funded?"

"How are routine maintenance issues addressed and monitored?" This will give insight into things like gardening, cleaning, minor repairs.

Governance, Compliance & Management:
Effective governance ensures smooth, legal operation.

"Are trustees fulfilling their fiduciary duties under the Sectional Titles Schemes Management Act (STSMA)?"

"When was the last building valuation for insurance? Is our cover adequate, including fidelity insurance?"

"How are disputes handled? Any ongoing legal matters involving the Body Corporate?"

If a managing agent is employed: "What are their key performance indicators? How is their performance monitored?"

Rules & Regulations:
Scheme rules ensure harmonious living.

"Any proposed changes to conduct or management rules? What's the rationale?"

"How are rule breaches addressed by trustees?"

"Active AGM participation empowers owners," Gray emphasises. "It's your chance to protect your investment and ensure a well-maintained, harmonious living environment. Don't fear asking tough questions; responsible trustees and managing agents welcome engagement, fostering transparency and collective ownership."

Attending your AGM prepared with these questions provides valuable insights and contributes to a more transparent, accountable, and well-managed scheme. Your voice matters in shaping your community's future.