Condominium AGMs Part 2/2

As a previous committee member of several JMBs and MCs, I have sat through many Condo AGMs. So nothing surprises me anymore?

But even I was taken aback when I read the agenda for the AGM of a luxury seafront condominium I attended recently.

The Problem With “Too Many Cooks”

One of the items on the AGM agenda was a vote to ratify the appointment of the managing agent by the JMB committee. Now I have sat through enough meetings to pick a property management company - “beauty contest” is the colloquial term for vetting a bevy of senior managers trying to convince your committee to appoint them - to understand it takes at least 4-6 hours.

Say you have narrowed down to a shortlist of 4 companies for a RFP (request for proposal). Each proposal will probably comprise a one inch thick folder to read. Now assume you allocate 20 minutes for each presentation by a property manager plus 20 minutes for questions plus the 20 minutes to scan through each proposal.

So for 4 companies, you've spent 4 hours. Add one or two hours to discuss the merits of each individual proposal and to vote and that's a total of 5-6 hours. Having sat through 5-6 hours on a weekend, are you then going to ask all owners to vote to ratify your pick? (No need to answer my rhetorical question. ) If a majority of owners say Nay you are going to spend another 4-6 hours picking a replacement.

🤠's Dua Sen: if you have elected committee members who are going to sign the cheques for the MC or JMB, presumably you should trust them enough to also pick a managing agent. Unless of course if you think you can do a better job than the incumbents. If you decide to stand for election are you prepared to give up 3-4 hours of your free time on weekends to attend committee meetings. By the way, you will be lucky if some of your fellow owners thank you for your service.

Code of Ethics For Committees & Building Managers

Another agenda item was to set up a “code of ethics” for the JMB committee and property management team. Nothing specifically was mentioned. Years ago I had attempted and failed to get my fellow committee members to endorse a one page code of ethics I had personally drawn up. I didn't think the list had anything controversial. Just the usual stuff like remember to declare any conflicts of interest, not to accept or give bribes etc..

But you should have seen the looks of outrage I got from my fellow commitee members. Obviously I had made a major Faux Pas - it was a“ no go” area. It was left to the senior member of the MC committee to take me aside, and explain that 1. yours truly had spent too much time abroad and 2. things are done differently in Bolehland.

I had better luck though with the GM of the property management company. He happily agreed to sign my Code of Ethics. Or rather he actually said, “No problem signing if you want me to. But how are you going to monitor my compliance?” A good point.

🤠’s Dua Sen: It’s easy to draft a Code of Ethics, The hard part comes after the Code is finished. Who is going to police the committee members and property management team for compliance ? NB Committee members can use the MC or JMB’s funds to get lawyers to respond to unfounded allegations by owners.

Limits On Drawdowns of Sinking Funds For Capex

Another agenda item was a proposal to limit capex on big ticket items unless the spending is approved by a simple majority of owners. That is a good idea. But you need to put the requirement to get approval from owners for big ticket capex items at an EGM/AGM into the ByLaws.

Post Script

Never hold condo AGMs on weekends

I remember one AGM at a luxury condo more than 10 years ago. Back then the SMA Act said if there was no quorum, then the next AGM would be held one week later. There wasn't a quorum so the next AGM was held a week later. To encourage attendance at the AGM the following week, the MC committee had proposed a buffet dinner with live entertainment after the AGM.

A catering company was hired to serve canapes, with satay and pasta cooked to order. A case of Prosecco was ordered (a committee member actually wanted $$$ champagne but was persuaded cheaper Italian Prosecco would do). A string duo (cellist and violinist) provided live entertainment.

The problem was except for 5 enthusiastic MC committee members, the auditor, the building manager and his GM, about 5 owners/proxies, nobody else turned up for the AGM and buffet dinner. The owners of our condo had “prior dinner engagements”, were “out of town”, etc. You get the point: The owners of luxury KLCC condos are very busy people.

At the next AGM of course there was no canapes, satay or bubbly on offer. Just a selection of kuih and coffee or tea. Lesson learnt.

🤠’s Dua Sen: Hold condo AGMs on weekdays after dinner. If you start at 8 pm, there is a good chance everyone will want to get proceedings over quickly.