Meeting Articles

Brave New World
"O brave new world that has such people in it!" These immortal words from Shakespeare’s The Tempest aptly describe homeowner associations. Conflicting interests can lead to disputes that erupt at meetings. To control such outlandish behavior, HOA meetings are well served by using a parliamentary procedure such as Robert's Rules of Order which allow a presiding officer to turn a long and confrontational meeting into a short and painless one.

Parliamentary procedure (or law) is the code of rules and ethics for working together in groups. Without rules, there would be injustice and confusion. Parliamentary procedure is the means by which organizations make decisions. It is not synonymous with Robert's Rules of Order. There are several major parliamentary books including Sturgis Standard Code of Parliamentary Procedure. However, Robert’s Rules of Order is by far the most widely used and is considered an authority. It includes sections on presiding, the duties of officers, running elections, making proper motions, and holding board and committee meetings.

The conduct of business in an assembly often varies by size. Annual meetings of homeowner associations are typically formal in procedure. Business conducted in a board of more than a dozen members follows the same formal procedure. Some characteristics of formal parliamentary procedure are as follows:

Members must be recognized by the presiding officer before speaking;
A motion to take action must precede any discussion of an issue;
Motions must be seconded;
Members may only speak to a specific issue twice;
The presiding officer does not participate in discussion; and
Formal votes are taken by voice or ballot.

Formal procedure in a meeting of fewer than a dozen may actually hinder business. Some recommendations from Roberts Rules for smaller groups include:

Members are not required to obtain the floor and can make motions or speak while seated;
Motions need not be seconded;
There is no limit to the number of times a member can speak to a question
Motions to close or limit debate generally should not be entertained (unless the group has adopted a rule to the contrary); and
Subject to rule or custom, the chair usually can make motions and usually votes on all questions.

While smaller boards can operate more informally, there are times that more formal procedure may be warranted. If a particular issue is hotly contested or likely to subject the board to publicity or a lawsuit, more formal procedure can ensure that procedural safeguards have been observed.

A basic rule is no meeting should be called to order until a "quorum" is established. A quorum is the number of the members that must be present in order to transact any business. This number or percentage is typically found in the HOA’s governing documents or state statute. In the absence of a provision regarding quorum, common law provides that a majority of members constitutes a quorum. Once a quorum is present, the meeting and business may proceed. Quorum refers to the number of members present, not to the number of members voting. If a quorum is present, a vote is valid even though fewer than the quorum vote (unless there is a rule to the contrary).

What is the standard Order of Business? The order of business is the blueprint for meetings and provides a systematic plan for the orderly conduct of business. If the rules of procedure do not include a standard order of business, parliamentary law has established the following pattern after the Call to Order by the chair:

I. Reading and Approval of Minutes. If copies of the minutes are made available, the actual reading may be waived. Following any corrections or additions, the minutes should be approved. Approval of the minutes is usually handled by unanimous consent.

II. Reports of Officers and Standing Committees. The chair usually calls on only those members who have reports. A motion arising out of one of these reports is taken up immediately, since the object of the order of business is to give priority to business in the order listed.

III. Reports of Special Committees. Special committees do not have continual existence, but exist solely for the purposes of a specific project.

IV. Unfinished Business. Unfinished business (sometimes incorrectly referred to as "old business") refers to questions that have carried over from the previous meeting as a result of that meeting having adjourned without completing its order of business. The following items are considered under unfinished business:

(a) The question that was pending when the previous meeting adjourned;
(b) Any questions not reached at the previous meeting before adjournment;
(c) Any questions postponed to the present meeting.

VI. New Business. Following any unfinished business, the chair asks, "Is there is any new business?" Members can introduce new items of business or move to take from the table any matter that is on the table.

Using basic parliamentary procedure provides a systematic way to get business done and allowing members to be heard. If your board has not adopted and use something like what has just been described, you live in a Brave New World. Brush up your Shakespeare because you’ll need it. Here’s one for your Pet Policy: "Out, damn’d Spot! Out I say!"

Excerpts from an article by attorney Jim Slaughter. BACK

Board Member Proxies
Owners in a homeowner association are allowed to give a proxy for an owners meeting to someone else to vote on their behalf. Members of a board of directors sometimes try to provide a proxy to another to appear and vote for them at a board meeting. The concept of a board member proxy raises a number of issues. First, may a board member give a proxy to someone to vote in his place? Second, if a board member does give a proxy, what are the possible ramifications and liabilities? Third, if a board member cannot give a proxy, may he give a power of attorney instead?

There is no specific homeowner association law precluding a board member from granting a proxy to a third party. However, it is basic corporate law that a board member cannot give his proxy to someone else due to increased liabilities and personal responsibility.

The protections afforded directors of volunteer corporations are based on those directors acting in good faith and relying on professional advice related to the issues concerned. If a director transferred this responsibility, he would be abrogating his fiduciary duties and be in breach of the spirit and the letter of the law.

Also importantly, many Directors and Officers insurance policies only cover the acts or omissions of board members acting in good faith and elected or appointed properly. One can only assume that the insurance companies would deny coverage for decisions made by a proxy holder and thereby expose the board member to substantial liability. And there are cases where members appointed to the board to fill vacancies are not covered under certain insurance policies which have language in them which limits the coverage to "properly elected" directors. Those insurance companies would likely decline coverage to members of the board and their proxy holders.

And there is no reason to believe that a power of attorney provides any more protection than a proxy. It is still likely a breach of fiduciary duty since the board member has not appeared and voted himself. Similarly, all of the issues regarding limited liability provided by the law and the insurance policies remain, even with the use of a power of attorney.

For these reasons, members of board should not provide proxies or powers of attorney to third parties to appear in their place at board meetings. Additionally, if a board member attempts to do so, the remaining directors should not accept the proxy holder. If there is not a quorum to proceed with the meeting without the proxy holder, the meeting should be adjourned until such time as a quorum can be present.

Excerpts from an article by Michael T. Schulman, Esq. BACK

HOA eVoting
As governmental entities, homeowner associations hold regular elections to populate their boards and periodic votes on governing document amendments. The traditional method includes holding annual meetings, special meetings or ballot-by-mail. These methods are cumbersome and often expensive to pull off. Moreover, establishing a legal quorum to transact business has proven to be problematic for many HOAs due to apathy.

Fortunately, the internet now provides the wonderful option of electronic voting. eVoting improves efficiency, effectiveness and reduces costs associated with traditional mailing and meetings. According to www.internetworldstats.com almost 75% of Americans use the internet and that percentage is much higher for HOA members who are generally higher income and bigger internet users. Those facts in place, establishing an internet platform for voting makes huge sense. So what are the options?

Do It Yourself. In its simplest form, electronic voting can be done easily as a DIY project using email. A ballot is attached in Word or fillable PDF form which can be emailed, completed and emailed back. The entity administrating the ballot collection merely keeps and updates a master list as ballots are received. The ballots can be stored electronically. As the deadline approaches, repeated requests can be emailed to those that have not yet responded. For the small percentage of members that don’t do email or would prefer paper, mailing a ballot with a return envelope should remain an option. The DIY option is easily pulled off by even the smallest HOAs.

Online Voting Services. A number of online options have come into being over recent years which provide automatic tallying, password protection and enhanced privacy. The system again works via email by sending a link to each member which leads to the ballot which is completed and submitted completely online. Since the process is automated, there is less chance for human error and it tracks each voter by email address and time they voted. As with most services, there is a base cost of this service which may be prohibitively expensive for small HOAs but the cost is very attractive for large ones.

Who Provides Online Voting Services? There are a number of websites that offer this service which include www.votenet.com, www.votingondemand.com, www.electionsonline.us and www.votehoanow.com. The setup process is usually very easy and is priced according to the number of voters.

The time has come to green the HOA voting process. But before you jump into e-voting with both feet, check your governing documents for voting requirements which sometimes require that ballots must be sent by mail. If so, the governing documents will need to be amended to allow electronic voting by an appropriate vote of the members. If there are no such restrictions in the governing documents, the board can enact a resolution which allows and describes the process of online voting. As with any resolution, it is highly advisable for the board to circulate a draft of the resolution to the members for a review and comment period of at least 30 days. Since there is little downside and much to gain like drastically reducing cost and being able to achieve a quorum more easily, this is an amendment worth putting in place as soon as possible. BACK

Musical Meetings
A well conducted meeting is like a music to your ears. Using a well thought out plan, the Chair cues, directs and closes the meeting much like a conductor. Conducting successful meetings doesn’t happen by chance. There is a combination of clear purpose coupled with ground rules. Here are some tips that can make your meetings like music to the ears.

Lay out the ground rules. Without ground rules, small issues become major time wasters and important matters do not receive the attention they deserve. Ground rules discourage an individual from monopolizing the meeting with personal concerns or issues previously discussed. Ground rules should be fair, easily understood and encourage a courteous and intelligent exchange.

One of the best known guidelines is Robert’s Rules of Order. The degree of detail and formality described by Robert’s Rules can be reduced to some basics:

1. One person may speak at a time.
2. The Chair decides who that person will be.
3. The speaker may speak only to the issue.
4. All are given an opportunity to speak.
5. Decisions require a motion, second and vote.
6. Once voted upon, no further discussion is permitted.

When everyone understands the ground rules, it is easier for the Chair to direct the discussion, to keep speakers on track, and to move the discussion toward an orderly decision. Remember that the board has been elected to make decisions, not merely to discuss issues.

Each meeting should have an agenda prepared by the Chair and distributed in advance to the board members. An agenda is the meeting map. Everyone knows where they are going and what the final destination will be. Without an agenda, any topic is fair game. While it is conceivable that every topic might be of interest, the ability to act on each is limited due to lack of preparation. An agenda is critical for staying on course.

Every agenda item that requires action needs a vote. The Chair asks for a motion. Once a motion is made, another person seconds the motion and discussion follows until the board is ready to vote. The vote is then recorded in the meeting minutes either as failed, passed unanimously or passed with dissenting or abstaining directors listed by name. (Recording votes by name is particularly critical if the issue is controversial). If someone is disgruntled about the vote outcome, that’s unfortunate. Votes do not have to be unanimous.

Set a time frame for the meeting as a whole and for specific topics on the agenda. A time limit focuses everyone’s attention and adds to the clarity of the discussion. It also helps the Chair in preventing an aimless discussion.

The purpose of the board meeting is to transact HOA business. Often this is not how it works. Some view it as an opportunity to discuss issues like the sales price of some unit. This information may be interesting to some, but it is immaterial to the HOA’s business. These topics should be culled from discussion.

The Chair plays an important role as "The Gatekeeper". The job of the gatekeeper is to "guard" the discussion by enforcing the ground rules, maintaining order, and calling a particular topic inappropriate. The Chair prods the discussion along or brings it to a close when all of the facts have been identified and it is time to make a decision.

The Chair must also control dissenters using "bully tactics". Bully tactics succeed by discrediting information or interruption. If the Chair makes it clear that bully tactics will not be tolerated, the behavior usually diminishes. Most meetings have a time when owners may speak, sometimes called an Open Forum. The Open Forum is an extremely important part of the meeting, even if participation is small. It will help diffuse rumors and gossip and demonstrate that the board wants to communicate and receive feedback.

The Open Forum happens just prior to the board meeting so each owner may speak and leave if they have no interest in the business portion of the meeting. Each person speaking should be limited to, say, five minutes so they get to the point and allow time for others.

Speaking of public relations, never hold closed or secret board meetings unless they qualify as a topic for "executive session". Executive sessions are closed meetings to discuss litigation, contracts, employee issues and other highly sensitive topics which should not be aired in public. Executive sessions should happen infrequently and be used judiciously. Otherwise, members have a right to be present at all board meetings as visitors and not participants. To shut them out invites challenge. With this in mind, all business meetings should be announced to all owners in advance and held in visitor friendly locations. Holding a meeting in someone’s living room where there is seating for board members only is the same as telling members they are not welcome. Even if members don’t generally attend, always leave that door open. It will make the board job much more pleasant. Conduct business transparently.

Additional success tips include:

1. Distribute minutes of the last meeting in advance so that they can be reviewed prior to the meeting.
2. Use a degree of formality in the meeting so the mood is "businesslike".
3. Principles of courtesy apply: Only one person speaks at a time. No interrupting, ridicule, sarcasm and innuendo.
4. Adjourn the meeting on time.

Now, do you hear the orchestra starting to warm up? The discord will soon turn into beautiful harmony. Hold on to that mental image and conduct your meetings like a symphony and sweet music will spread through out your community. BACK