Why is an AGM Necessary and Why Should You Attend?
In our previous article, we highlighted six key topics every owner should understand before attending an Annual General Meeting. Here, we take a deeper dive into the first and arguably most important point: why the AGM exists, and why your presence makes a real difference.
PPSP Team
Professional Property Solutions Provider
The Role of the Body Corporate
A body corporate functions as a legal entity responsible for managing the financial and administrative affairs of a sectional title scheme. It collects levies from owners and uses these funds to pay service providers and contractors who maintain and manage the property.
In accordance with the Sectional Titles Act, the body corporate is required to hold an AGM each year. During this meeting, it must present financial statements to its members, outlining how funds were managed over the previous financial year. This ensures transparency and accountability in how the scheme is operated.
Your Only Opportunity to Engage
For most owners, access to the day-to-day financial records of the body corporate is limited. Unless you serve as a trustee, you typically won't see monthly accounts or ongoing financial activity. This makes the AGM particularly important—it is the primary opportunity for owners to collectively review and discuss the financial affairs of the scheme.
Attending the AGM allows you to:
- Understand how your levies are being spent
- Evaluate how effectively the trustees are managing the scheme
- Learn about planned projects or expenses that could impact your financial contributions, such as special levies
Staying informed is essential, as these decisions directly affect both your costs and the value of your investment.
Budget Approval and Its Impact
Another critical aspect of the AGM is the presentation and approval of the proposed budget for the upcoming year. Owners are given the opportunity to review, comment on, and make suggestions regarding projected income and expenses.
Important: Once the budget is approved…
- It becomes final and binding
- Owners cannot later object to or challenge the levies
- Complaints about levies being too high or too low will not be entertained
This makes your participation in the AGM crucial—it is your chance to influence financial decisions before they are locked in.
Choosing the Right Trustees
The AGM also serves as the platform for electing trustees, who will manage the affairs of the body corporate until the next AGM. Trustees play a vital role in decision-making, financial oversight, and day-to-day management.
As an owner, being involved in this process is essential. The effectiveness of the trustees can significantly influence:
Appointing unsuitable or ineffective trustees can result in poor decision-making, mismanagement, and ultimately a decline in property value. On the other hand, competent trustees help protect and enhance your investment.
Your vote at the AGM is one of the most direct ways you can influence the quality of management in your scheme.
Questions Every Owner Should Ask at the AGM
If you are unsure where to contribute, start with targeted questions that improve accountability and clarity.
- What are the top three cost increases in the new budget, and what is driving them?
- How much is currently allocated to reserves versus reactive maintenance?
- Which large maintenance projects are planned for the next 12 months?
- How are arrears currently being managed and what is the recovery timeline?
- What service-level expectations apply to the managing agent and contractors?
These questions shift the discussion from opinion to measurable outcomes, helping owners make sound decisions.
If You Cannot Attend, Stay Involved
Missing the meeting does not have to mean losing your voice. Owners who cannot attend can still participate meaningfully.
Before the AGM
- Submit your proxy correctly and on time
- Provide written voting instructions where possible
- Send any questions to trustees in advance
After the AGM
- Request and review the approved minutes
- Confirm changes to levies and implementation dates
- Track progress on resolutions passed
Need Help Preparing for Your AGM?
PPSP ensures every AGM runs smoothly, transparently, and in full compliance with the law. Speak to us today.
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AGM Series Articles
Understanding Annual General Meetings in Sectional Title Schemes
A comprehensive overview of AGMs, quorum, voting, and post-AGM responsibilities.
Why is an AGM Necessary and Why Should You Attend?
Frequency and Notice Needed for an AGM
Timing rules, notice periods, and what happens when proper notice isn't given.
Parts 4–6 — Coming SoonMore AGM Topics
Stay tuned for upcoming articles in this series.