Management Corporation - Preparing for an Annual General Meeting (AGM)
you thought you only have to attend meetings at work, think again, if
you are a strata development owner. One important aspect of strata
ownership is that by law, annual meetings that have to be convened. An
annual general meeting (AGM) is a yearly opportunity for owners to be
active in their strata development community. From time to time, the
elected Council or Owners may want to have other special meetings to
conduct business between the AGMs.
meetings are called the extra-ordinary meetings. This article refers to
the Strata Titles Act, 1985 (STA), where strata titles have been issued
to the development. For strata developments which are pending issuance
of titles, there is another set of legislation – Building and Common
Property (Maintenance and Management) Act, 2007 which has almost the
same set up for formation of a body to control and govern the strata
First AGM - Get your strata titles first
there are some purchasers who mistakenly withhold transferring of their
strata titles for the wrong reasons. We have come across many committee
members of Pro Tem Committees or Residents’ Association who have
inside knowledge of the ‘mismanagement’ of the developer and are
dissatisfied with the conditions, whether financial or technical, and
believe that by withholding the transfer, the developer/original
proprietor would not be able to call for the First Annual General
Meeting to end the initial period of the Management Corporation (MC).
This belief is wrong for the following reasons:
- Any existing grouses do not negate the fact that the transfer of strata titles completes the sale and purchase agreement.
have to be handled collectively, and the MC or Joint Management Body
(if strata titles are not issued yet) is the legal body to oversee the
common complaints of their bodies.
- Now that
the required sum of the aggregate share units have been reduced to
one-quarter (1/4) from one third (1/3) following the recent amendments
to the STA, other owners will not agree with the committee but will go
ahead and do what is legally necessary to transfer their own titles to
themselves and effectively be qualified to attend the first annual
general meeting called by the original proprietor or developer.
an example, of a strata development with 200 units with equal sizes,
lets say one parcel‘s share units is 130, the total share units would
be 26000 share units. If the original proprietor owns 30 units (unsold
units), its share units would be 3900 share units. The required quota
to end the initial period would be only be 5525 or roughly 43 parcels
(1/4 X 22100 (26000-3900)). This quota excludes parcels registered
under the original proprietor.
you can see, it only takes around one quarter (1/4) of the total
parcels to end the initial period to form the owners’ MC. There are
some purchasers, who argued that, since they have paid in full for the
purchase and have been contributing towards the common fund, they
should be allowed to attend the general meetings.
Unfortunately, the law requires that only registered parcel proprietors
be allowed to attend these meetings and have a say in how their strata
development is run. Some meeting organizers may allow non-registered
owners to attend the meetings but without voting or speaking abilities.
STA S.4. - Interpretation.
refers to a parcel proprietor, that is to say, a person or body for the
time being registered as the proprietor of a parcel, as well as to the
proprietor of a provisional block, that is to say, a person or body for
the time being registered as the proprietor of a provisional block
unless expressly provided otherwise;
How important is the First Annual General Meeting?
Strata Titles Act, 1985 (Act) provides that it is the duty of the
original proprietor/developer to convene the First Annual General
Meeting within a month of achieving the quota of transferred strata
STA S.4. Interpretation.
period", in relation to a management corporation, means the period
commencing on the day on which the management corporation is formed and
ending on the day on which there are proprietors, excluding the
proprietor of the lot who is registered as the proprietor of a parcel
or parcels or a provisional block or blocks the sum of whose share
units is at least one-quarter of the aggregate share units;
the original proprietor fails to do so, he shall be guilty of an
offence and liable on conviction to a fine not exceeding twenty-five
thousand ringgit (RM25,000) and to a further fine not exceeding two
thousand ringgit (RM2,000) for each day the offence continues to be
committed. The developer is therefore bound by law to convene a
meeting whether or not the owners are ready to takeover management and
maintenance of the strata development so long as the pre-requisite
requirements have been achieved..
The agenda for the First Annual General Meeting is spelled out in the Act as well. The agenda for the first annual general meeting shall include the following matters:
- to decide whether to confirm, vary or extend insurances effected by the management corporation;
- to decide whether to confirm or vary any amounts determined as contributions to the management fund;
determine the portion of contribution to the management fund to be paid
into the special account to be maintained under section 46;
- to determine the number of members of the council and to elect the council where there are more than three proprietors; and
- to decide whether to amend, add to or repeal the bylaws in force immediately before the holding of the meeting.
are serious matters which will affect the unit owners and every effort
should be taken by the unit owners to attend this meeting. In this
meeting, the number of council members will be determined and can only
be changed at the next general meeting. These are your fellow owners
who would be representing you for the next year or so. Efforts should
be made to get to know them.
first meeting would also decide on whether or not the contributions to
the management fund should be varied. Varying, normally would mean an
increase as the council members would have to take into consideration,
fees or salaries to pay to a management company or for staff employed,
replacements or repair works to the common property now that the
building has aged or due to neglect, etc.
is at this meeting where special resolutions are passed to add or amend
the By-Law of the strata development. By-laws are for regulating the
control, management, administration, use and enjoyment of the strata
development. The Act provides a model By-Law, however this is
insufficient for most strata developments which have been operating
under other governing documents like the Deed of Mutual Covenants,
House Rules etc. The MC may by special resolution make additional
by-laws, or make amendments to such additional by-laws, not
inconsistent with the by-laws set out in the Third Schedule.
of the governing documents are tools for the Corporation to run
smoothly and for the owners to live peacefully within the community.
However, it is also not practical for the strata development to create
a working By-Law in one day. The By-Law has to be carefully developed /
adopted from other documents. In reality, strata property buyers have
to prepare in advance before the first annual general meeting is
The National House
Buyers Association (HBA) has disseminated information and guided /
provided general advice to several strata development owners to prepare
for transition from developer MC to owners’ MC. Interested parties can
approach HBA by appointment on the days the Association’s Advice Centre
is opened to the public. Check out www.hba.org.my for more information or write to firstname.lastname@example.org for prior appointments which are normally held on Saturdays when our volunteers are available to do public service.
Business at General Meetings
For meetings other than the first annual general meeting, the agenda is
normally set out in the by-laws. If not, the Council will normally
follow a fairly standard agenda which includes:
- call the meeting to order
- elect or appoint a chairperson
- proof of notice of meeting
- call the roll and establish the quorum
- amend and adopt the agenda
- read and dispose of minutes of the previous meeting
- officers report
- committee reports
- financial report (annual audited financial statements, budget, appointment of auditors)
- old business
- new business (often includes owners' questions and comments)
- election of Council members
Act and the Corporation` By-laws will determine a parcel proprietor`s
voting rights. First, if title to the unit is mortgaged, the
end-financier may want to attend the meeting and vote, the owner cannot
vote. This rarely happens but the Act requires that the end-financier
be informed of this meeting and borrower should get permission to be
appointed as proxy to attend the meeting. Second, if a registered
proprietor owes money to the Corporation before the meeting, neither
the owner nor any mortgagee on that unit can vote. Owners need to
understand that they must be current with their contributions and other
financial obligations to the Corporation to enable them to vote. They
must pay any outstanding amounts the day before the meeting.
Preparation for parcel owners
Just as the Council prepares, so must owners prepare for the AGM. Consider the following steps:
- watch out for notices on upcoming meeting (usually sent out well before the actual notice of the meeting).
- think about any items you may want to discuss at the AGM. Write the items in a letter and send it to the Board.
the by-laws, meeting notice, agenda and any information sent with the
meeting notice. Prepare your comments and questions. Get ready to
discuss motion and vote on motions.
- think about ways you can contribute to the strata development by volunteering.
- pay your service charges and any other money owed to the Corporation by the day before the meeting.
to attend the meeting or complete, sign and give your proxy to someone
on your behalf. If you choose a proxy, inform that person of your
questions or comments to pass on.
- if you
choose to attend the meeting, plan to arrive half (1/2) an hour early
for registration and take all your documents with you (by-laws, meeting
notice, documents sent with the meeting notice, budget, financial
success of a strata MC can only come from active participation from its
members. Whether one participates in the meetings or volunteers to be a
council member, strata owners should know that major decisions are made
at these meetings and should strive to attend each and every meeting
called. The spirit of caring for others in the community can only
improve one’s life and not make it worse.