What exactly happens in an Annual General Meeting (AGM)?
Every building by law is required to hold an AGM every 15 months – this is usually done annually, hence the name.
Topics that are generally spoken about cover the financial statements for the year and the budget movement for it, i.e. what is expected to happen next year, what are all the expenses coming up.
The long-term maintenance plan looks at what is coming up in the next ten years. These should be discussed every Annual General Meeting. It has to be reviewed by law every three years, but it should be discussed.
A large part of the meeting will be around insurance as it is the biggest ticket item. Then all the other expenditures like your building management contracts, service contracts, cleaning and lift maintenance.
The building manger will have their review and then voting for the chairman will occur too. Voting who will be on the committee will happen too. This is very important because you have got to vote on who you want to represent you, especially if you’re in an apartment complex of 100 or 200 people. You are not going to have these meetings five, six, seven times a year, so you elect a committee to make decisions on your behalf on the day-to-day stuff.
What is an apartment AGM? Now an apartment AGM stands for Annual General Meeting. By law, an apartment complex has to have an Annual General Meeting every 15 months. Generally, it happens every year hence why it is called Annual General Meeting. Now this is really important and it will include AGM minutes or body corporate minutes. This is the written recording of these meetings, which is called the Annual General Meeting.
What happens in these meetings? What do they talk about? I will give you some of the topics that they generally speak about. They will talk about the financial statements for the year and the budget movement for it, i.e. what is expected to happen next year, what are all the expenses, that kind of thing. They will also be talking about the long-term maintenance plan. What will happen in the next ten years. Things like these should be discussed every Annual General Meeting. It has to be reviewed by law every three years, but it should be discussed.
You are often shuffling things around because unexpected things come up. This is like, the lift actually needs maintenance in five years because it is shaking a bit. Why don't we look at bringing it forward two years? Another one is insurance, which is always talked about because it is the biggest ticket item. You often, as a body corporate, go out and talk to the different insurers.
What your body corporate company does for you on your behalf and you come back with different quotes and find out which is the best for your building. As I said, it is probably the largest expense on the budget. You have got other expenditures like your building management contracts, service contracts, cleaning, lift maintenance. Depending on how big the complex is and how many service contracts you are going to have. Picking up the rubbish is just one of these things.
Another one is your building manager review. A building manager will come and give a review each year. What were the good things? What were the points that were difficult? What are the things that can be improved and what is your opinion? What is the ground view or the ground-floor perspective? What is happening in our complex?
These are really important when it comes to owners who do not live in the building, because the building manager is their eyes and their ears to a degree. The next one is obviously voting for the chairman and the owners' committee. This is very important because you have got to vote on who you want to represent you especially if you're in an apartment complex of 100 or 200 people. You are not going to have these meetings five, six, seven times a year, so you elect a committee to make decisions on your behalf on the day-to-day stuff.
For example, the rubbish collecting contract. If the garbage guy's been late, he's not been doing a good job. It is put on notice or find a new provider. Any major things have to be discussed at an AGM. If it's a building management, it has to be discussed at an EGM which is when you basically get all the owners back together. That's really important, in that the biggest thing is if there's any issues that come up. They're discussed at the AGM and that's why it's really important from a purchaser's point of view. The purchase need to go through the body corporate comments, because the AGM is the recording of this. AGM for a purchaser is like your health check.
What I am going to do is go over the body corporate minutes and how important they are. An example is the body corporate minutes and understand what to look for, what not to look for. I hope that helps.
Andrew Murray, Apartment Specialists. Talk soon.