Developer voting at Inaugural meeting

We are a newly developed Body Corporate and heard that the Developer is not allowed to vote at our Inaugural meeting? Is this true?

The short answer is yes and no.

Referring to the STSM Act we find the following:

Prescribed Management Rule (PMR) 16

(3) For the purposes of voting on the items of business referred to in sub-rule (2)(c), (d) and (e), any vote held or controlled by the developer is suspended.

So basically then we have to look at PMR 16(2)(c),(d) and (e) to see what that refers to:

(2) The agenda for the first general meeting of members must include at least the following — (a) a motion to confirm or vary the terms of the policies of insurance effected by the developer or the body corporate; (b) a motion to confirm or vary an itemised estimate of the body corporate’s anticipated income and expenses for its first financial year; (c) a motion to approve, with or without amendment, the developer’s —

(i)  evidence of revenue and expenditure concerning the management of the scheme from the date of the first occupation of any unit until the date of the establishment of the body corporate, as required in terms of section 2(8)(c)(iii) of the Act; and

(ii) financial statements relating to the management and administration of the scheme from the date of establishment of the body corporate to the date of notice of the first general meeting referred to in sub-rule (1);

(d)   subject to section 15(2) of the Act, a motion to ratify or not to ratify the terms of any contract entered into by the developer on behalf of the body corporate; (e)   a motion confirming that the developer has —
  • furnished the meeting with copies of the documents referred to in section 2(8) of the Act and in this rule; and
  • paid over any residue referred to in section 2(9) of the Act;
(f)      a motion appointing an auditor to audit the evidence and financial statements referred to in sub-rule (2)(c); (g)   motions determining the number of trustees and electing trustees; (h)   a motion detailing any restrictions to be imposed or directions to be given in terms of section 7(1) of the Act or confirming that there are no such restrictions or directions.

So the STSM Act stipulates that there are only certain items at the first general meeting (Inaugural meeting) of the Body Corporate where the Developer cannot vote.  He/she can vote on all the other items.