Annual General Meeting (AGM)

General Meeting principles

What is the general meeting

The General Meeting (GM) of co-owners is the decision-making body of the co-owners’ association. It enables co-owners to express their views and make decisions, through their votes, on all matters of common interest. It is therefore essential and in the interest of every co-owner to participate.

There are two types:

• The Ordinary General Meeting is held once a year. It appoints and dismisses the managing agent, modifies the by-laws, approves the accounts, votes on certain works, creates, modifies or abolishes a condominium council, modifies the destination of the building or part of it, etc.
• Extraordinary general meetings are called by the managing agent when a decision needs to be taken urgently, or at the request of one or more co-owners owning at least 1/5th of the thousandths of the property. The general meeting is sovereign, meaning that decisions taken at the general meeting prevail. They cannot, however, override the law or the building’s bylaws (basic deed and co-ownership regulations).

The invitation

The condominium by-laws set out the rules for convening and running the AGM. The Civil Code sets out a minimum number of rules to be respected:

• at least 3 weeks before the period during which the AGM is due to take place, each co-owner may notify the managing agent of the specific items he wishes to be included on the agenda. The AGM can only deliberate on these items;
• the notice of meeting must be sent by registered post by the managing agent at least 15 days (except in emergencies) before the date of the meeting. The notice is sent to the last address notified by each co-owner to the managing agent;
• Each co-owner is therefore obliged to notify the syndic of any change of address or modification in the nature of the real rights;
• the notice of meeting indicates the place, day and time of the meeting, the agenda and the provisional budget.

Attendance sheet and proxies

Each co-owner has the right to attend and vote at the general meeting, and has a number of votes corresponding to his share (his thousandths*) in the common areas. Co-owners may be represented at the meeting by a proxy of their choice, who may or may not be a co-owner:

• The proxy must be named in the power of attorney;
• The mandatary cannot be the managing agent or any other person mandated or employed by the condominium association;
• He may only take part in the vote with a maximum of the same number of votes as the sum of the votes of the other co-owners present or represented;
• The proxy may accept no more than 3 proxies, unless the total number of votes held by the proxy (as co-owner and as proxy) is less than 10% of the total number of votes held by the co-ownership as a whole.

An attendance list showing the names of each co-owner and their respective shares is signed by the co-owners present and by any proxies of absent co-owners. This attendance sheet is used to count the votes cast at each meeting and to check that the required majorities have been reached.

Attendance quorum

In order for the meeting to deliberate validly, certain quorums must be reached. There are two possible attendance quorums:

1. More than 50% of co-owners are present or represented AND they represent at least 50% of the thousandths.
2. Less than 50% of co-owners are present or represented, BUT they represent more than 75% of thousandths.

If neither of these quorums is reached at the start of a General Meeting, a second General Meeting will be called after 15 days. This second meeting may validly deliberate regardless of the number of co-owners present or the quotas represented.

Appointment of chairman, secretary and scrutineers

Thegeneral meeting begins by electing a chairman, who must be a co-owner and cannot be the managing agent, as well as the secretary and, if possible, two scrutineers. Generally, the managing agent acts as secretary. The chairman directs the debates, calls for votes and ensures that the agenda is respected. The secretary and/or scrutineers ensure that the meeting runs smoothly, and record the votes cast.

The votes

• All decisions are taken by the general meeting in accordance with the various majority rules laid down by law. The Legal Obligations of the Syndic in Belgium include the responsibility to ensure that these rules are respected to guarantee the legitimacy of the decisions taken by the meeting. Abstentions are not considered as votes cast. Abstentions are therefore not calculated in the total number of votes.

Example: a vote with 4 votes for, 3 votes against and 3 abstentions will be considered as a vote with an absolute majority of 4 out of 7 (and not 4 out of 10).

• A co-owner who has more votes than all the other co-owners present or represented will have his voting rights restricted: his thousandths* will be reduced to the sum of the votes of the other co-owners present. On the other hand, he always has half the votes, which makes it possible to block any decision requiring an absolute majority (50% plus one), so that no decision can be taken without his support.

Majorities

Absolute majority (50% + 1) :

• approval of accounts
• adoption of the budget
• appointment and discharge of the trustee
• appointment and discharge of the condominium council
• appointment and discharge of the statutory auditor
• approval of service, maintenance and energy supply contracts
• hiring or firing condominium staff
• approval of any work required by law (such as bringing electrical installations up to standard)
• approval of all work relating to conservatory acts
• modification of internal regulations with the exception of the competitive bidding threshold amount
• creation of an internal condominium council for condominiums with fewer than 20 lots

Decisions that risk infringing on the rights of co-owners or significantly increasing financial charges require a different type of majority. These are defined by law (art. 577-7 of the French Civil Code). This law applies even if the condominium by-laws provide for stricter rules. These are qualified majorities.

Two-thirds qualified majority (⅔)

• carrying out work on common areas, except that which may be decided by the syndic
• definition of contract amounts for which competitive bidding is mandatory
• execution of work in certain private areas by the CPA, with special justification
• mandate to the condominium council to carry out specific actions for a maximum period of one year
• any amendment to the bylaws that concerns only the enjoyment, use or administration of common areas

As of January 1, 2019, each co-owner’s share of the costs (defined in advance between co-owners) must be taken into account to determine his or her voting power. This is the “who pays, who votes” principle. For example, if a co-owner has a lot representing 30/100 of the common areas, but is only involved in one-fifth of the cost of restoring the stairwell, he will have 1/5 of the power when voting on the painting of the common areas.

Four-fifths qualified majority (80%)

• amendments to the bylaws concerning matters other than the enjoyment, use or administration of common areas
• change of use (residential, commercial, etc.) of the condominium or part of it
• demolition or total reconstruction of the building, for health or safety reasons, or because the cost of bringing the building into compliance with legal provisions is excessive in relation to the value of the existing building
• purchase of real estate to be jointly owned
• sale of jointly-owned real estate
• division of a lot or partial or total joining of two or more lots

Unanimous (100%)

• modification of the distribution of quotas between co-owners, unless this modification is the consequence of works, the joining or division of 2 lots, acts of disposal or the creation of partial associations. In this case, it is adopted by the same majority as the decision in principle. any decision taken in writing outside a GM meeting.

The minutes

The law (art. 577-6, §10) designates the trustee as the recorder of the minutes. The latter is required to draw up the minutes at the meeting and to record all decisions taken, noting majorities and identifying opponents and abstainers. At the end of the meeting, the minutes are read and signed by the Chairman, the Secretary, any scrutineers and all co-owners present or represented. They are then recorded in a register and kept at the association’s head office. The minutes must be distributed to all co-owners within 30 days of the AGM, and then by the owners to the tenants.

Dispute

Co-owners wishing to appeal against a decision of the AGM must do so within 4 months of the date on which the AGM was held. Decisions likely to be overturned are :

• decisions where there have been errors of form or substance;
• fraudulent decisions, i.e. decisions that have been manipulated;
• abusive decisions: there is abuse when the decision has been taken in violation of the common interest, or when there is a disproportion between the benefits sought and the inconvenience caused. The common interest is not necessarily infringed when a decision causes inconvenience to certain co-owners.

The accounts

Expenses to conserve and maintain the property, as well as other common charges, are paid by each co-owner, in proportion to their thousandths* or to the specific charge allocation key.

What type of accounting is used?

For small condominiums, accounting can be simplified.

For larger condominiums, the law requires a chart of accounts established by royal decree. It must make it possible to accurately establish the state of the condominium association’s finances at a given date, and must be able to determine the assets and liabilities of the balance sheet:

• ASSETS :

what the co-ownership has in its bank accounts at the balance sheet date the total amount still to be received on the association’s account, including charges owed by co-owners.

• LIABILITIES :

• the total sums called by the managing agent ;
• amounts due to suppliers ;
• the book value of working capital and reserves (amount voted by the AGM).

Who keeps the accounts?

The syndic keeps the accounts, and the auditor verifies them. The law (art. 577-8, § 4, 5°) stipulates that the syndic is responsible for administering the funds of the condominium association.

How are funds managed?

Each condominium will have different funds, at least a working capital fund and a reserve fund, all of which must be placed in separate accounts opened in the name of the ACP. In the event of the sale of an apartment, the co-owner who sells recovers his share of the working capital in proportion to the number of days he did not benefit from the use of the common areas. The statement is drawn up by the syndic. His share of the reserve fund remains the property of the ACP. As of January 1, 2019, it is mandatory to set up a reserve fund of at least 5% of the last annual budget for current charges. This requirement may be waived by a quorum of 4/5 of the votes.