Should Small Blocks of Flats Self-Manage: The Importance of Annual General Meetings


10/01/2024

Author : Mary-Anne Bowring


Should Small Blocks of Flats Self-Manage: The Importance of Annual General Meetings

When it comes to self-managing small blocks of flats, establishing effective communication channels and formalising the decision-making processes are crucial. The Annual General Meeting (AGM) serves as a vital platform for residents to come together, discuss important matters, and make collective decisions. Here in this blog we explore and highlight the significance of AGMs for small blocks of flats who choose to self-manage. We have also included an outline of a comprehensive agenda to guide the less experienced flat management company directors or newbies.

Do small blocks of flats need to hold Annual General Meetings:

1. Transparency and Accountability:
AGMs provide an opportunity for residents to stay informed about the management and financial aspects of the block of flats their property sits in. By discussing key matters openly, AGMs foster a sense of transparency and accountability among the residents, ensuring that everyone feels consulted and has a voice.

2. Decision-Making and Consensus Building:
AGMs are a forum where important decisions can either be made collectively or if made by a board of directors beforehand can be passed down, ratified, or explained. Such decisions might include financial planning and service charge budget approval or approval of maintenance projects such as re-roofing or external decorations; or policy changes such as adopting a set of rules or regulations that can take effect as lease regulations as if they were original covenants to the lease. At an AGM, residents can participate in discussions, express their opinions, and collectively determine the direction of the property.

3. Building Community and Engagement:
AGMs serve as a means to build a sense of community among the residents. At a well-chaired AGM, leaseholders can connect, share concerns, and work towards common goals. Engaging in constructive dialogue during AGMs can foster a strong community spirit and encourage collaboration among residents. That said, chairing an AGM is challenging, especially as whilst you can choose your friends, you cannot choose your neighbors. Owners will come from different backgrounds, with different financial means, some will be owner-occupiers and others buy to let investor landlords. Bringing about a common purpose takes some skill and is ultimately about focussing on protecting the asset value of the freehold and all the leasehold interests.

Flat Management Companies Agenda for an Annual General Meeting:

As a guide, we have set out below a framework AGM Agenda for a block of flats

Welcome and Introduction:
The meeting should begin with a warm welcome and introduction, setting a positive tone for the discussions ahead. Introduce the agenda and establish any necessary ground rules for conducting the meeting effectively.

Review and Approval of Previous Minutes:
Next, we suggest you present the minutes from the previous AGM and allow residents to review and provide feedback. Once any necessary amendments are made, seek approval from the attendees to finalise the minutes.

Financial Review and Budget Approval:
Someone with confidence in reading a set of accounts should talk the meeting through the company accounts, including income, expenses, and reserves. This is also an opportunity to discuss any significant changes or financial challenges, present the proposed budget for the upcoming period, and seek approval from the residents. The important thing to remember is that the AGM is for the company, so it is for presenting the company accounts not the service charge accounts. That said, the service charge accounts are often more useful or meaningful to the leaseholders so we recommend these are discussed after the formal AGM part of the meeting.

Appointment of Directors or Committee Members:

If applicable, discuss the appointment or reappointment of directors or committee members responsible for overseeing the management of the property. Encourage residents to volunteer or nominate suitable candidates.

Appointment of the Accountants to preside over the company for the coming year:

This is part of the statutory business of an AGM. Ordinarily, the accountant of the company presides until the next AGM.

To set the remuneration of the accountant

This too is part of the statutory business of an AGM. Albeit often the meeting will simply pass a resolution that setting the remuneration the accountant can be delegated to the board of directors.

Any Other Business:
It is good practice to allow owners to bring up any additional matters or concerns that are not already on the agenda. While this segment should be open, it is essential to manage the time and ensure that discussions remain relevant and focused. This segment encourages active participation and helps address individual residents' needs and queries. This could include:

Maintenance and Repairs:

Discussions on any ongoing or upcoming maintenance projects, repairs, or renovations. Share cost estimates, project timelines, and potential disruptions. Seek residents' input and approval for major maintenance decisions.

Policy Updates and Rule Amendments:
A presentation of any proposed updates or amendments to existing policies, rules, or bylaws. Explain the reasons behind the changes and allow residents to provide feedback or suggest modifications. Seek approval for policy updates or amendments through a vote.

Ending the meeting:
It is good to conclude the meeting by summarizing the key decisions made, expressing appreciation for residents' participation, and highlighting the next steps and follow-up actions.
So in conclusion, Annual General Meetings play a pivotal role in the effective management of blocks of flats both large and small blocks of flats. By facilitating transparency, decision-making, and community engagement, AGMs empower residents to actively participate in the management of their property, fostering a sense of ownership and collective responsibility. By following a comprehensive agenda that covers financial review, budget approval, maintenance, policy updates, resident input, and other relevant matters, AGMs ensure that important decisions are made collectively, promoting transparency, accountability, and community engagement in small blocks of flats.

ServiceChargeSorted.co.uk, as well as taking care of all the legal and financial admin for small blocks of flats and producing the service charge accounts, in the online property manager section, sets out all the resolutions you are likely to need to run a block of flats.

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