Virtual meetings — the way forward in strata management

The Covid-19 pandemic and the resulting lockdowns have changed the way we conduct our daily activities.

It was not until the country entered into the recovery movement control order (RMCO) on June 10, 2020 that the government relaxed the rules against group gatherings and allowed management bodies of stratified properties to organise annual general meetings (AGM), extraordinary general meetings (EGM) and management committee meetings, subject to the strict adherence to the standard operating procedures (SOP) prescribed by the Ministry of Housing and Local Government.

The SOP, amongst others, restricted the duration of meeting to not more than four hours. Secondly, if the venue of meeting could not accommodate all participants, then attendance is on first-come first-serve basis. Additionally, it stipulates that only important motions are to be discussed and decided upon and such decisions are to be recorded. Those proprietors above the age of 60 are not encouraged to attend as they are at high risk of the Covid-19 infection.

While the intention of the SOP is noble, to a certain extent, it curtails the rights of proprietors. For example, proprietors wishing to participate in a general meeting may find themselves being denied to do so as the venue has reached its full capacity even before the meeting starts.

As the Covid-19 statistics in the Klang Valley worsened in the middle of October, the government tightened the rules and implemented the conditional movement control order (CMCO) in the Klang Valley. Following this, all general meetings in strata schemes in the affected areas have been prohibited once again.

However, as if oblivious to the danger in the increasing number of Covid-19 cases, the Housing Ministry in its latest FAQ dated Oct 15, 2020 still allows physical meetings of management committees, joint management committees and subsidiary management committees in strata schemes as per item 16 as follows:

“Management committee meetings involving physical meetings are allowed on the conditions that it shall not exceed 10 persons in the meeting place, the committee members shall keep at least one meter distance apart from each other and they shall take preventive measures against Covid-19. Nevertheless, it is encouraged to hold management committee meetings by online meetings during the CMCO period.”

It is important to note that such a meeting is usually held in a room that does not have sufficient space for effective physical distancing. Furthermore, the duration of such meetings is normally long and, in the unfortunate event of the presence of Covid-19- infected persons or carriers, the built-up of aerosols of the virus over the long hours within the meeting room will definitely be deadly and will endanger the lives of the committee members, particularly those who are senior citizens.

During the CMCO period, many such committees have no choice but to conduct their meetings online with proper quorum and decision-making process by a simple majority vote where the chairman will have a casting vote if there is an equality of votes. It will be good if the Housing Ministry can confirm that, for the avoidance of doubt, all decisions made and resolutions passed by the committees at such online committee meetings are valid and do not need to be ratified later in a physical meeting.

Is virtual viable?

The Singapore government recognised that allowing general meetings of management corporations to be held via alternative arrangements other than physical attendance will go a long way in mitigating the impact of Covid-19 lockdown.

Section 27 of the Singapore Covid-19 (Temporary Measures) Act 2020 allows meetings to be held or conducted in a manner other than provided for in the written law or legal instrument to limit or prevent the spread Covid-19.

Under this provision, the Minister may by Order prescribe alternative arrangements, including provision for a meeting to be convened, held or conducted by electronic communication, video conferencing, teleconferencing or other electronic means.

Pursuant to this provision, the Singapore government prescribed the Covid-19 (Temporary Measures) (Alternative Arrangements for Meetings for Management Corporations, Subsidiary Management Corporations and Collective Sale Committee) Order 2020 (Singapore Order).

In order to facilitate the implementation of this Order, the Singapore government has devised guidance notes covering various aspects of virtual meetings – from the issuance of notice of general meeting, quorum of meeting and appointment of proxy to voting process.

Under this Order, the notice of meeting will still need to be issued in accordance with the strata management law. In addition, the notice shall contain such information on how to use and access the relevant electronic system and how proprietors can cast their votes in the course of the meeting.

The guidance note also provides that the management corporation should ensure that the electronic portal used will enable the secretary to identify and verify the identities of proprietors who “attend and participate” in the meeting conducted via the electronic portal.

Virtual or ‘hybrid’

Unlike the Companies Act 2016, the Strata Management Act 2013 does not contain any provisions which allow AGM, EGM or management committee meetings to be held electronically.

Section 59 of the Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (Covid-19) Act 2020 (Covid-19 Act) provides that a minister charged with the responsibility for any Act of Parliament, may by Order published in the gazette, provide for alternative arrangements for such statutory meetings which in his or her opinion is not possible to be convened, held or conducted in the manner provided in such Act due to the pandemic from March 18 to June 9, 2020.

However, the benefit of this provision has been severely watered down as the laws were only gazetted on Oct 23, 2020 and by then, the applicable period of time for this provision had lapsed. By way of comparison, the Singapore Order provides that alternative arrangements to conduct general meetings apply for the period from March 2020 until June 2021.

Nonetheless, the Prime Minister may exercise his power to extend the operation of Covid-19 Act vide Section 2 of the same Act. This power includes extending the period in which statutory meetings are not possible to be convened due to the pandemic.

In this regard, the Minister of Housing and Local Government ought to look into the possibility of prescribing an Order pursuant to Section 59 of the Covid-19 Act to allow management bodies to convene general meetings and committee meetings either through fully electronic method or “hybrid” method.

Hybrid meetings simply mean a mix of both physical and electronic. Hybrid methods may be suitable in situations where there are a number of proprietors who do not have the equipment or know-how to participate in virtual meetings, where they are allowed to attend the meetings at designated venues.

Minister’s prescribed Order

The proposed prescribed Order pursuant to the Covid-19 Act shall emphasise that the legal requirements to convene a general meeting pursuant to the Strata Management Act should still be complied with.

The Order shall stipulate that the Notice of General Meeting shall contain clear information on how proprietors can use and access the relevant electronic system/portal to attend the general meeting and how proprietors may cast their votes in the course of meeting, such as providing user ID and password for login.

The notice shall also inform proprietors of the areas to take note, including reminders to exercise all due care and diligence to ensure their login details are not disclosed to any other party, and to ensure that no other party is present at all times throughout the conduct of the meeting, and to abide by the rules set for discussion or deliberation of each motion in the course of the meeting.

Further, the notice shall provide an email address to which proprietors can submit their queries or questions in relation to the motions tabled in the agenda of the general meeting, which the chairperson shall address in the meeting.

Management bodies should ensure that the electronic portal used will enable the secretary to identify and verify the identities of those legitimate proprietors who “attend and participate” in the meetings. The chairperson of the meeting shall also acknowledge the presence or attendance of these proprietors.

The quorum of a meeting should include proprietors and proxies who “attend and participate” in the meeting via the electronic portal. Those licensed registered property management companies are trained to undertake such tasks and hence, management bodies should not brood.

The future

Virtual meetings bring a host of benefits and ideally shall remain an option even after the pandemic has been controlled. Virtual meetings could also encourage more people to take part in general meetings as they are just a few clicks away.

However, it is important for management bodies to identify a suitable electronic platform or software which will enable a seamless meeting.

Datuk Chang Kim Loong is the Hon. Secretary-General of the National House Buyers Association (HBA).
HBA can be contacted at: Email: [email protected]
Website: www.hba.org.my
Tel: +6012 334 5676

This story first appeared in the EdgeProp.my e-Pub on Nov 13, 2020. You can access back issues here.

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