The Purpose of Annual General Meetings
- Trevor Morley
- Jul 3
- 8 min read
Updated: Jul 26
WHAT IS AN ANNUAL GENERAL MEETING?
The Strata Property Act requires every Strata to hold an annual general meeting no later than two (2) months after the Strata’s fiscal year end. The Strata Property Act has several references to what must or can occur at an annual general meeting, but there is no statement regarding the purpose of an annual general meeting.
Our experience, working with an uncounted number of Stratas is that the most effective annual general meetings involve both the efficient resolution of routine business with respectful and productive discussions of situations where there was no pre-existing consensus.
At the extreme, we are aware of a Strata (based on legal advice) that had only a single resolution at a general meeting. That one resolution purported to approve the budget, amend the bylaws and elect the council with a single resolution passed by a ¾ vote. We suspect it was done as a way for the Council to push through an unpopular bylaw by linking it with all the other essential business. We do not encourage or support that approach!
WHAT ARE THE MAIN PURPOSES FOR AN ANNUAL GENERAL MEETING?
We believe that there are five primary purposes for an annual general meeting:
To enable collective decision-making.
To decide certain routine matters on an ongoing basis, such as budgets and insurance coverage.
To decide whether to take certain special measures or steps.
To permit the consideration of proposals from owners.
To decide who is most appropriate to exercise the powers and obligations of the Strata as a member of the council.
WHO DETERMINES THE AGENDA FOR AN ANNUAL GENERAL MEETING?
We frequently get questions from Council and from Owners about whether the Council gets to decide what happens at an annual general meeting or if the Owners get to decide. There is no simple answer.
The Council gets to decide what is on the agenda that is included with the notice package for the annual general meeting. This is usually done at the council meeting preceding the distribution of the notice package.
However, during the meeting when the Owners are resolving to accept the agenda, there can be a motion to add additional proposals. In this way, neither the Council nor the Owners get to decide what happens at an annual general meeting.
WHAT IS AN EFFECTIVE AGENDA FOR AN ANNUAL GENERAL MEETING?
Our experience has convinced us that an effective meeting starts with effective preparation and a thoughtful agenda. There is always a limit on the time available for a meeting and it is important that priorities are established and the more routine aspects of a meeting can be moved through expeditiously.
Here is what we recommend as the agenda (order of business) for an Annual General Meeting:
Register eligible voters, certify proxies, and issue voting cards.
Call the meeting to order.
Elect a person to chair the meeting, if necessary.
Determine that there is a quorum.
Present proof of notice of meeting,
Approve the order of the agenda,
Approve the minutes of the most recent general meeting or waiver of notice of meeting,
Deal with any unfinished business,
Receive reports of council activities and decisions since the previous annual general meeting,
Ratify any new rules made by the Strata Corporation since the previous annual general meeting,
Report on insurance coverage, including the certificate of insurance and the most recent appraisal,
Approve the budget for the coming fiscal year,
Deal with other matters,
Elect a council,
Terminate the meeting.
HOW DOES A STRATA ENABLE COLLECTIVE DECISION MAKING?
Collective decision making is not a specific activity but should be in involved in every aspect of the annual general meeting. There is a clear ‘flow’ to the administration of a Strata:
At the annual general meeting the Owners decide on the business of the Strata.
The Council operates the business of the Strata and keeps owners informed through minutes.
If the Council is uncertain about its authorization or the preference of the Owners it calls another general meeting to get authority or instructions from the Owners.
At the next annual general meeting the Owners evaluate the conduct and effectiveness of the Council and decide whether other people should have an opportunity to be on Council.
It is important for Owners to appreciate and act responsibly regarding the fact that a Strata is a community that operates on democratic principles.
HOW DOES A STRATA DECIDE ON THE BUDGET?
A proposed budget will be provided in the notice package for the annual general meeting. The budget will be explained by category of expenditure. We have written about categories of expenses in another article and what the options if there is a budget surplus or deficit.
It is important to take the time to review the budget and to understand what is being proposed. There should be information regarding the proposed budget to the prior budget so you can identify areas where it is expected that expenses will increase and areas where they are expected to decrease.
It is also very useful to consider the Contingency Reserve Fund. When considering the proposed amount to be contributed to the Contingency Reserve Fund compare it with the information in the Depreciation Report. We have discussed the usual funding models in a Depreciation Report in another article. You should understand how the proposed contributions to the Contingency Reserve Fund may affect the likelihood that the Strata will be required to raise money by enacting a Special Levy.
You are not required to fully understand the nuance of the proposed budget, but you should be familiar with how it communicates how the Council expects the next fiscal year to progress.
It is important to remember that approving a budget is simultaneously the authorization for the Council to choose service providers based on the approved expenditure.
A budget is approved by a majority vote, and this means it can be amended during discussion by motions from the Owners. The budget is not a ‘take it or leave it’ proposition and Owners must recognize that it is crucial, as part of supporting a robust and resilient strata community, that everyone understands and has some ownership over the budgetary decisions.
HOW DOES A STRATA DECIDE ON INSURANCE COVERAGE?
Strictly speaking, the Strata Property Act requires the Council to report on insurance coverage at each annual general meeting and to inform Owners of any material change to insurance coverage including changes in an insurance deductible.
However, the Council does not have complete discretion regarding selection of the terms on the insurance coverage. The payment of the insurance premium is an expense that is included in the budget that requires owners to approve.
In general, there is an inverse relationship between the cost of the premium for the policy and the amount of the deductible. As the deductible increases, the cost of the premium decreases. The appropriate balance between the cost of the premium and the amount of the deductible is a critical decision for Owners to make and should not be unilaterally left to the Council to decide.
It is important for Owners to recognize that in most instances, the deductible will be paid as a common expense and the money will come from the operating fund, the contingency reserve fund or be raised by special levy. Owners must be comfortable with this responsibility and have input into how much risk exposure they are prepared to accept with a deductible.
Depending on the size of the Strata and its loss history, it may be reasonable to identify in the operating budget the payment of the deductible one or more times during the year. It may also be reasonable, for a Strata that does not expect that losses occur annually, to essentially ear-mark the payment of a deductible from the money in the Contingency Reserve Fund. We have worked with Stratas where the Contingency Reserve Fund is based on significant necessary expenses for repairs (roof and building envelope repairs) and does not include any funds for the payment of an insurance deductible.
HOW DOES A STRATA DECIDE ON SPECIAL MEASURES OR STEPS?
The annual general meeting usually involves two general forms of special measures – the Owners directing the Council by majority vote and the amendment of Bylaws.
The Strata Property Act permits Owners, at a general meeting, to pass a resolution by a majority vote to direct Council regarding the exercise of its authority. This form of resolution is most commonly done at an annual general meeting and can take several forms. An example would be to direct Council to retain a specific service provider. We have an article regarding the direction of Council that describes this process in greater detail.
The second common special measure at an annual general meeting is the changing, repealing, replacement or amendment of Bylaws. This is done by a resolution passed by a ¾ vote. Owners must be provided with the wording of the proposed Bylaw with the notice for the annual general meeting and during the discussion of the Bylaws there is no ability to make any substantive change to the resolution. The amendment to the Bylaws is not enforceable until it has been filed with the Land Title and Survey Authority of British Columbia (LTSA).
WHEN DOES A STRATA CONSIDER PROPOSALS FROM OWNERS?
We do not recommend that Owners raise proposals at the annual general meeting that have not been shared with other Owners before the meeting. Instead, what we recommend is that Owners are provided with an opportunity to propose resolutions prior to the distribution of the notice for the annual general meeting and that the interested Owner can speak first during discussion of the resolution.
We have repeatedly experienced Stratas where there has been a fragmentation of the community and a conflict between the Council and a group of Owners regarding what is appropriate to be considered at a general meeting. Our recommendation is that everything be included in the agenda and then by resolution the Owners who attend the meeting can determine what resolutions are actually discussed. It is important to appreciate that democratic principles control a general meeting – no resolution is discussed unless there is a motioner or a seconder and calling a vote on a resolution when discussion is perceived as no longer necessary or efficient is done by a majority vote. No individual or group of individuals that constitute less than a majority of the people present can dictate or control the conduct of the meeting.
WHEN IS A STRATA COUNCIL ELECTED?
At each annual general meeting the members of Council are elected. Each person that stands for election must receive a majority vote of the votes cast to have them elected.
This is the opportunity for Owners to directly affect how the Strata will be operated.
One question that we frequently receive is a variation of: Our Bylaws say that Council should be between 3 and 5 people and only 5 people volunteered to be on Council. Does that mean that all of them are on Council without needing to be approved by a resolution?
The answer to this question is that every person needs to be approved by a resolution regarding being elected to be a member of Council. It is not hard to imagine a situation where someone that the majority of Owners do not want to be a member of Council becoming a member of Council because there are not enough other people willing to stand for election.
For the same reason, the election of the members of Council should not be based on a ‘slate’ where an Owner is compelled to vote for multiple people when they believe that not all of those people should be a member of Council.
ROBUST AND RESILIENT STRATA COMMUNITIES ENGAGE FULLY WITH THE ANNUAL GENERAL MEETING PROCEDURES
The proper conduct of Annual General Meetings is critical to supporting a robust and resilient strata community. The Annual General Meeting is the opportunity for collective decision making and community building. It is important that all participants understand the purpose of the meeting, have reviewed the notice package, and are prepared to fully participate. For most Owners, it is the key opportunity for them to participate directly in the governance of the Strata. That opportunity should not be squandered because of a restrictive agenda, a too controlling chairperson, or the failure to provide relevant information far enough in advance that Owners can thoughtfully engage with that information.
