Every owners corporation must hold an Annual General Meeting if it receives or pays out money in a financial year.
The Owners Corporations Act explicitly states the matters that must be dealt with at each and every Annual General Meeting (AGM). These matters are:
The election of a committee, if the owners corporation is to have a committee (if an owners corporation consists of 12 lots or less, it may elect a committee; if an owners corporation consists of 13 lots or more, it must elect a committee).
The appointment of a manager, if it is applicable. (Note that an owners corporation committee may terminate a manager's contract, or appoint a new manager, however, this decision must be ratified by a general resolution at the AGM).
The provision of details of the insurance held by the owners corporation.
The provision of details of fees fixed by the owners corporation during the year.
The consideration of the financial statements of the owners corporation for the previous year.
The consideration of the proposed annual budget of the owners corporation.
The making of any delegations.
The consideration of any reports such as the owners corporation manager's report, or building manager's report, or any dispute resolution reports.
The tabling and consideration of the minutes of the previous annual general meeting.
If any of the above items are not resolved at the AGM, the owners corporation must hold another general meeting that same year to consider those items. For example, if a budget is not passed, a new budget must be put to the general membership at another general meeting that year.
Note: a budget may be amended at an AGM before being voted on - a budget may even be voted down, then amended, and then approved. However, if members refuse to pass even an amended budget, a new meeting must be held.
Engage your OC Manager to convene all meetings to ensure that they are not deemed 'invalid' by a court.
There is always a question of the ideal timing of an AGM.
Part 6 above notes approving a budget for the upcoming financial year. If there is an owners corporation which has a financial year end 30/6/20 for example, it may be considered that the best time to hold the AGM is 15/5/20, so that the new budget (with new fees) may be set in time for the new financial year beginning 1/7/20.
However, Part 5 above notes that the statements of the previous financial year must be voted on at an AGM. Such documents are impossible prepare until a few weeks into the new financial year - for example, if we take the same owners corporation above with the financial year end of 30/6/20, the financial statements cannot be presented until 1/7/20 at a minimum. However, when it is considered that an ASX listed company may not have financial statements available for several months, it is not unreasonable to suggest that an owners corporation manager may need at least one month to prepare the statements for an owners corporation. Given the statements then must be part of the AGM agenda, sent out to all owners at least 14 days before the meeting (see 'AGM Notice' below), it would be impossible to hold the AGM before 15/8/20 - longer if the financial statements are being audited, or if the owners corporation manager manages a number of precincts with the same financial year end - this could suggest 1/9/20 as the earliest practical date for the AGM.
Best practice is holding an AGM is within 3 months of the end of each financial year.
This means in the case of the owners corporation above, before 30/9/20. (The legal requirement is to hold the AGM within 15 months of the last one). The quarterly fees for the year, based on the budget passed at the AGM, can be adjusted in the third and fourth quarters of the year so that the annual fee raised is correct.
Notice of the AGM
Like all owners corporation meetings, there are laws pertaining to the notice of AGM.
The person convening an annual general meeting (this can be an office bearer, or a manager, depending on previous delegation of powers resolved by the owners corporation) must give notice in writing of the meeting to each lot owner at least 14 days before the meeting.
The notice must contain the date and time, the agenda, attachments relating to the agenda, and a statement that the lot owner has the right to appoint a proxy.
If the notice is not sent out in accordance with the legislation, the meeting is at risk of later being deemed invalid.
A quorum for a general meeting is at least 50% of the total votes, or if 50% of the total votes is not available, then the quorum is at least 50% of the total lot entitlement. If there is not a quorum present at the meeting, the general meeting may proceed but all resolutions are interim resolutions.
Notice of the interim resolutions and the minutes of the meeting must be forwarded to all lot owners within 14 days of the meeting, along with a statement regarding the interim resolutions - the OC manager will be able to do this. Interim resolutions then become resolutions of the owners corporation within 28 days unless more than 25% of the membership object - please see the Owners Corporations Act for more details.
Ask Melb OC how to make your AGMs more effective, efficient, and stand up to scrutiny.