SA Legal Opinion - How many proxies can one person have?
How many proxies can one person have?
There seems to be some confusion of late as to whether a person can hold more than two proxies or not. The simple answer is yes: a person can currently hold more than two proxies – there is no limit at the moment.
“At the moment” is key here, and this seems to be where the confusion comes in. Contrary to information being circulated, the proxy limitation has not come into effect yet. In terms of the Sectional Titles Schemes Management Act No. 8 of 2011 (STSM Act), which is not in operation yet, there will be a limit of two proxies for any person. Section 6(5) of the STSM Act states the following: “(5) A member may be represented in person or by proxy at such meeting: Provided that a person must not act as a proxy for more than two members.”
Currently, under the Sectional Titles Act No. 95 of 1986 (the Act), there is no proxy limitation. It is also important to point out that rule 67 prescribed under the Act has not been changed. So unless a scheme has changed this rule, any person can hold any number of proxy appointments.
What is a proxy?
A proxy is a person who has been appointed by an owner to attend, speak and vote on their behalf at a general meeting. Prescribed management rule 67 says that owners may cast a vote at a general meeting personally or by proxy and a proxy need not be an owner of that scheme. The proxy must be appointed in writing and a “proxy form” must be signed by the owner or by his or her authorised agent, who has also been appointed in writing. The signed proxy form must be handed to the chairperson before the meeting starts unless it is contained in a registered mortgage bond and the bond is produced at the meeting. A proxy form may include specific instructions on how the proxy should vote – if this is done then the proxy is bound to follow these instructions.
Currently, one person could lobby other owners to authorise them to appoint the one person as their proxy, allowing the one person to vote for or against a motion in a manner that best suits their needs. When the two-proxy limitation comes into effect, this type of “concentration of voting power” in one owner will not be legal and owners will either have to attend meetings or appoint different proxies to have their votes exercised at meetings they cannot attend.
Paddocks, sectional title specialists, runs Paddocks Club – a learning community for people involved in sectional title. To keep up to date with what is really going on in sectional title, visit www.PaddocksClub.co.za.
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Courtesy: The EAAB - Estate Agency Affairs Board
“Redressing the Past, Building the Future and Guiding the Real Estate Business towards Professionalism”
It is apparent, therefore, that the CPA could conceivably have severe implications not only for landlords, property developers and business owners but also estate agents and commercial- and business brokers.