Electronic General Meeting for Management Corporations (MCSTs)

Electronic General Meeting for Management Corporations (MCSTs)

About the Writer: Teo Poh Siang is the founding managing director of Wisely 98 Pte Ltd. He is the author of A Practical Guide to Strata Management in Singapore, a book that has been positively reviewed by industry players. The 2nd Edition of A Practical Guide to Strata Management in Singapore will be launched in the 2nd half of 2020. For more information, visit www.wisely98.com

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Introduction

The amended Building Maintenance & Strata Management Act (BMSMA) that came into effect on 1st February 2019 has a provision for council meetings to be conducted electronically. However, there is no provision in this amended BMSMA to allow for a general meeting to be convened by electronic means.

The COVID-19 (Temporary Measures) (Alternative Arrangements for Meetings for Management Corporations, Subsidiary Management Corporations and Collective Sale Committees) Order 2020 (“the Order”) that was issued on 27th April 2020, has now allowed for general meetings of MCSTs to be convened by electronic means. But this Alternative Arrangement is permitted only for the period 27 March 2020 till 30 September 2020.

The digital movement for the strata community in Singapore has been lacking behind other sectors for many years, mainly due to cost of the technology and very few technological service providers serving this sector. Since the issuance of the Order, I have viewed live demonstrations by various parties professing to provide electronic online Voting System for the strata community. I found that most of the proposed systems are either new innovations or require contextualisation of an existing system to meet the unique requirements of the BMSMA. At the time of writing this article, many of the online Voting Systems are still carrying out beta tests.

Any online Voting System proposed for the strata community should in my view, meet the following three criteria:

1. Easy to use

2. Productivity

3. Compliance

1. Easy to use

Singapore has a vision to be a Smart Nation but we have not arrived yet. The access to the online Voting System should be user friendly, fast with easy steps, taking into consideration that we still have a sizeable portion of managing agents and subsidiary proprietors finding challenges in using smart tools. Most of the vendors use the Web-based applications that do not require any system to be installed. Some vendors require the users to download an App before the users could access the voting platform. The App for computers and mobile phones should pose little or no challenge brought along by wide and fast changing operating systems in computers and mobiles. Be it Web-based or App-based, the Voting System provided must be easy-to-use with a simple interface.

It is common for a person to be proxies for several lots. The Voting System should therefore allow for a single access when registrations have been made for any person to be proxies for more than one lot. The Voting System should provide easy-to-use voting view for any user that shows unit voting in share value or lot, and whether he is a subsidiary proprietor, proxy, mortgagee or a company nominee. Each lot is included in one view for easy voting. The lots which a person is representing should be presented in a single platform when voting take place.

2. Productivity

Since the inception of the first Land Titles (Strata) Act in 1967, the conduct of all past general meetings have been based on paper and pen. The paper and pen mode is costly because a large amount of paper document are needed. The larger the estate, the higher cost in printing and postage costs incurred for documents. Managing agents are required to spend advance hours before the commencement of meeting for setting up registration counters and to provide manpower to manage the registration of subsidiary proprietors and proxies attending the meetings.When a poll is required, voting slips in paper form are used and votes are counted manually. These efforts are laborious and time consuming.

At a physical meeting, subsidiary proprietors/proxies are required to show proof via photo IDs for verification before being allowed to sign onto the attendance list. How do the managing agent verify that a person signing into the electronic platform is a genuine subsidiary proprietor or the appointed proxy? PINs/Passwords and links can be easily passed from one person to another. The use of a one-time-password (OTP) as the response code for verification may make the system slightly more robust but not a sure proof and may reduce the user friendliness. Others asked for photo IDs be sent via the voting platform for verification purpose that may cause worries about whether the Personal Data Protection Act (PDPA) has been complied. The physical verification of photo IDs could slow down the registration process since verification of photo IDs can be laborious for a large turnout. The proposed Voting System should provide for productivity to eliminate existing physical manual work with one that comes with seamless operation that only enables the true subsidiary proprietors and proxies signing into the platform.

The Voting System should allow for the exclusion of subsidiary proprietors and proxies of lots from voting when there are outstanding dues owed to an MCST.

After voting is closed, the system should compute votes in favour of/against the resolution or abstain from voting. An abstain vote will not be counted in the calculation of votes (Paragraph 9(1) 1st Schedule). The final tallies of the votes by share value in accordance with the type of resolution be it Ordinary, Special, 90% or others could be computed automatically and to be explicitly shown.

The option for voting by lot for any Ordinary Resolution [Section 2(2)(b) BMSMA] and for Election of Council Members (Paragraph 8(4) 1st Schedule) should be provided in this system.

3. Compliance

The compliance requirements for the general meetings are largely embodied in the 1st Schedule of the BMSMA and in the Order.

Among others, the online Voting System should provide these:

3.1 Proxies

There are many concerns about proxies. The requirements on proxies at general meetings are listed in Paragraph 17 of the 1st Schedule. Among others, the system should provide the following features:

a. Limit to 2 lots or 2% of the number of lots whichever is higher when the threshold is reached.

b. Allow for the instrument of the proxy to be void, if a subsidiary proprietor decides to be present at the general meeting. The managing agent may need to specify the process how a subsidiary proprietor may notify his intention about joining the meeting before and after the commencement of the general meeting, the latter could be more complex to manage.

c. Some vendors allow for the votes submitted via the proxy forms for the motions to be treated as advance votes in the Voting System . A proxy at a general meeting is merely for exercising the right of the subsidiary proprietor provided under Paragraph 17 of the 1st Schedule. When advance votes are set up in the Voting System, a proxy will no longer have the free-will to take part in the voting. The voting decisions of that subsidiary proprietor as shown in a proxy form submitted, are therefore preserved. While this feature is commendable, it would be onerous on the managing agent to ensure that the decisions of any subsidiary proprietor are correctly set up in the Voting System. In the event that a proxy does not attend that meeting or leave the meeting mid-way, the Voting System must be able to “deduct” these advance votes from the final votes count.

3.2 Election of Council Members

The Voting System should be versatile and allow subsidiary proprietors to select the candidates standing for election to council and limit their choices to the number of council members decided for the term.

The Voting System should accept nominations received in writing (at least 48 hours before the commencement of meeting, Paragraph 18 1st Schedule) and oral nominations during the progress of the general meeting.

The nomination list should cater for extra-ordinary number of nominations to be received. Whether the figures will be 25 or 30 or even more is anyone’s guess! The nomination list could be long, should be allowed in one view for the subsidiary proprietors/proxies casting the votes. The votes received by every candidate are to be shown clearly on screen. The Voting System should also allow for the selection of the candidates with the highest votes which may then be declared as elected council members for the new term. When there is a tie for any two or more candidates, the Voting System should provide an alert for the managing agent to manage the candidates on tie according to the BMSMA.

3.3 “Open-Market” Feature

Proposals are likely to be received at a general meeting for matters such as the number of council members for the term, the restriction of the council, changes to the amount of levies and interest rates. These are amendments to the original motions but do not change the subject matter of the motions and are to be permitted (Paragraph 1(4) 1st Schedule ). There could also be a situation when there is a tie in the votes of subsidiary proprietors standing for election to council. The word “open-market” means that the function of the Voting System must be versatile and sufficient to cater for a wide and broad types of proposals from the floor. An edit function for making changes to any motion tabled must also be provided.

3.4 Computation of Quorum

As the subsidiary proprietors sign into the platform, the system should allow for computation from time-to-time and send an alert to the host when the quorum of 30% aggregate share value is reached (Paragraph 3(2)(a) 1st Schedule) at the appointed time and thereafter. While there is no explicit requirement in the BMSMA to declare the subsidiary proprietors present in term of lots, the presence of this feature would make the system an added advantage.

3.5 Attendance of Mortgagee and Co-Proprietors

Paragraph 2(2) 1st Schedule allows for the first mortgagees to attend the meeting and to cast votes. When a mortgagee exercises this right to vote at a general meeting, the right of the subsidiary proprietor for that lot shall be denied.

Paragraph 2(3) 1st Schedule also allows co-proprietors and co-mortgagees of any lot to attend a general meeting. If joint subsidiary proprietors or co-mortgagees are present at a meeting, the vote of the senior who casts a vote, whether in person or by a proxy, shall be accepted to the exclusion of the votes of the others; and for this purpose, seniority shall be determined by the order in which the names stand in the strata roll. So far all vendors adopted a first-come-first-served concept in addressing this voting right of the senior. They either allow the first person to register at the platform to have the voting right or restrict the Voting System to only accept the votes of the first person that cast the votes.

3.6 Audit and Security of Data

An audit trail is needed as required by the Order. This audit trail should be easy to interpret especially in identifying the subsidiary proprietors or proxies casting the votes. In any online system, security of the data can never be compromised. The vendor should build a scalable infrastructure so that it can scale to thousands of transactions per second and more.

3.7 Import & Export features

The import function is needed to allow the strata roll of an MCST from another system (usually kept in the accounting software) to be migrated into the Voting System. This would mitigate the laborious entries of data to serve as the Attendance List. An export function would allow the Attendance List be used for the minutes of the general meeting.

3.8 Multiple Administration and Multiplex functions

Hosting a general meeting for several hundreds and even more subsidiary proprietors require a co-ordinated effort behind the screen by a team of staff from the managing agent. Some vendors allow limited access (only 5) to the Voting System while others allow for more. The Voting System must allow for multiple simultaneous administration for multiplex functions.

3.9 Latecomers

Not everyone will be punctual for a meeting. The Voting System should allow for voting of the latecomers, be it subsidiary proprietors or proxies, to vote only the remaining motions after any latecomer has entered the platform.

3.10 Accidental Mistake

There should never be any error in voting. While this rule should always be maintained, genuine accidental mistake can occur such as opening the wrong motion for voting. The system should have features to prevent such accidental errors and if occur, allowing a reset for a complete re-voting provided declaration of the result is not made yet.

3.11 Single Integrated Platform

All voting systems which I have seen so far are independent systems. Another tech tool such as Skype, Zoom, MS Team etc is needed as the visual and audio platform. A managing agent conducting the general meeting will have to manage two electronic platforms. The users may either toggle in between two platforms in a single screen with one computer or operate from two systems: a computer and his mobile. There may be confusion for those who are less tech savvy. It is my wish that there will be an integrated platform providing all functions from hosting the visual/audio conference to registration, voting and other features which any typical general meeting requires.

3.12 Count Down for Voting

The visual effect of a timer for the count down (say 60 seconds) activated to remind subsidiary proprietors/proxies about the balance time left for voting during the voting process would assist the managing agent in closing the voting process for every motion.

Supporting Resources

As this is the first time since the strata scheme came into operation that electronic general meeting will be carried out, many stakeholders require resources on:

a. how to gain access to the audio/visual platform?

b. how to gain access to the Voting System?

c. how to register?

d. how to vote? and many others…

These resources should be sent to subsidiary proprietors together with the notices for the general meetings and before the commencement of the meetings. These would make access and the use of new tech-tools, at this instance the Voting System, easily accepted by the stakeholders. Vendors should provide these resources as readily as possible.

The Immediate Future

There are benefits likely to be derived from an electronic general meeting. Among others, the following benefits could be realised:

a. Cost saving especially from saving in papers, meeting venues etc

b. Shorter lead time in the preparation for sending out notices of general meetings

c. Possible shorter meeting time since votes are computed automatically by the system

While electronic general meeting via a video conference is new for the strata community in Singapore, it should be part of the provisions in this internet age. We should also adopt electronic voting at physical meetings for the various reasons cited above. For continued electronic general meeting and electronic online voting to be adopted at a physical meeting, the BMSMA requires amendments. The Voting System should be designed to meet the expectations of a physical meeting. I hope that the authority would lead the strata community towards this direction by making changes to the legislation to allow for continued electronic general meeting and for electronic voting be introduced at any physical general meeting.

 

Disclaimer: The article is not intended to be any form of legal advice. If legal advice or other expert assistance is required, the services of a competent professional or lawyer should be sought.

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