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Virtual AGMs – the good, the bad and the crazy

Can virtual AGMs work in real life?

, |

Virtual AGMs – the good, the bad and the crazy

Can virtual AGMs work in real life?

, |

2 min read

Even though lockdown restrictions seem to be easing, the real risk of COVID-19 still hovers over us like an evil spectre, so estate managers, HOAs and boards need to be creative when it comes to holding the AGM – especially when it comes to ensuring you have a quorum.

In the old days – you know, about a year ago – you would count the people in the room and know whether you had a quorum. For most estates, that would have to be more than 50, so face-to-face AGMs are not an option.

The implications of postponing the AGM

Postponing the AGM could have some very serious implications. Without an AGM, you can’t appoint new board members, or vote out old ones; you can’t raise levies, and you may not be able to substantively change contracts or enter into new ones. And, of course, you can’t change the constitution.

So postponing the AGM, while possible, is definitely not desirable.

Virtual AGMs – the good

From Zoom Pilates classes to virtual doctor’s consultations, we are becoming more and more comfortable with virtually conducting aspect of our lives that we would not have considered possible a year ago. So virtual AGMs are just one more aspect of life that has moved from the physical to the virtual, and there are so many advantages. No travelling, traffic and parking, no tepid tea and curly sandwiches, and no sitting for hours on those hard, uncomfortable ‘conference room’ chairs that were designed for the non-existent ‘average’ human with very short thighs and very long calves. Many estates are relishing the convenience and cost-effectiveness of virtual AGMs.

Virtual AGMs – the bad

Virtual AGMs are a great idea, and in principle they should work fine. But there are some communities that are not comfortable with the idea because they believe virtual AGMs may not give all members an equal say. What if there’s a glitch with e.g. Vodacom or MTN, and 20 people lose connection for a quarter of an hour? If even one of them finds out afterwards that they missed a vital piece of information that could have changed how they would have voted, then it’s possible they may declare the meeting non-quorate.

And, of course, there is always the risk that, while members may be logged in, they may be in the next room cooking supper, or even on the golf course. But I guess that’s not really that different to someone who is physically present, but busy on Facebook, or even just daydreaming.

Virtual AGMs – the crazy

There are some HOAs whose MOI specifically states that all members must be physically present at the AGM. Well, that shouldn’t be a problem, because you can just vote to change that at the next AGM, but you can’t hold the AGM because you need more than 50 people to be quorate, and you can’t hold a virtual AGM because your MOI says you can’t. This is a tricky one because, as Marina Constas of BBM Law says, ‘most MOI documentation needs amendment to equip an estate for virtual meetings. Without the enabling legal amendment setting out the structure as in the Sectional Titles Act, there will almost always be a way for a recalcitrant owner to object.’

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