Bylaws changed, board action outside of meeting

Our Florida HOA just voted to accept extensive changes to our governing documents. One of these pertains to action taken by the board of directors without a meeting. Originally it read: "The Directors shall have the right to take any action in the absence of a Board meeting, which they could take at a meeting by obtaining the written approval of all of the Directors. Any action so approved shall have the same effect as though taken at a scheduled meeting of the Board of Directors."

It is now revised to: "The Directors shall have the right to take any action in the absence of a Board meeting. Any action approved shall have the same effect as though approved at a regularly scheduled Board meeting. Decisions shall be put in writing, signed, dated and added to the minutes of the next meeting."

Florida's corporate law permits the board of directors to take action without a meeting if all of the board members consent to the action in writing, unless the articles of incorporation or bylaws provide otherwise.

Removal of the requirement for unanimous consent concerns me because now the board can make any decision outside of a properly announced meeting.

Does this seem like a reasonable change? Can anyone suggest any good reasons for it?

Thanks. I appreciate having the opportunity to post here.

If the Florida corporate law applies to your association, then the bylaw change is null and void.

I agree The revised language is probably defective and unenforceable.

Having said that, I really don't see the concern here.

ANY decision or action by the BoD is subject to membership critique.

So if a decision or action by the BoD, say "XYZ", were to be enacted "in writing" and a majority of the membership disagrees with it, the BoD would likely have to defend their decision to do XYZ at the next meeting.

Additionally the BoD would need to demonstrate why the decision to enact XYZ "in writing" could NOT wait until the next BoD meeting.

Now if a MAJORITY of the members disagree with the [any] decision [and/or the means in which it was enacted] you would likely have enough membership support to easily recall members (or threaten a recall) to reverse XYZ and/or to prevent this in the future.
(Florida BoD recall is easy and, well, does NOT require a meeting!)

So you see the members do sort of have the last 'vote' on the BoDs actions and HOA operational protocol.

Conversely, if you do not have enough membership support against 'XYZ' then its sort of "no harm, no foul" situation as the membership is not sufficiently concerned by the decision or behaviour.

Thank you all for your comments. There's a lot of food for thought here.

Melissa, I am also a past president (briefly) of my association and served on the board for a year. I understand you. My concern, though, is not about decisions made as you describe, that really need to be done right then. This has always been allowed. Rather, I am concerned about the lack of restraint and oversight when a majority of board members can take significant actions without even the knowledge (until after the fact) of the other board members, and with no opportunity for association members to be present. The actions will have been taken long before the membership knows about them.

David, we are incorporated under Chapter 617 of the Florida Statutes,Corporations Not for Profit.

Susan, I doubt there is any special format. The action will be reported in the next meeting’s minutes, probably naming the directors who made the decision. Since there is also an amendment requiring board members to be on the Design Advisory Board (DAB), now any DAB meeting is also a board meeting and subject to notice requirements. I expect that this omission was intended to make it easier for the board to take action between board meetings, since they have taken on so much.

Our board members are all good people, genuinely well-intentioned, who do a lot for the community. There is no question of their honesty. But there are really just a few who do everything. And there has been a trend for the association to become more powerful and the membership to become complacent, involved socially but not politically. Information is not easy to come by, and questions are given summary, pat answers. It is not a terrible state of affairs. But when our documents were recently updated to be current with Florida law, it seemed to me that the changes went far beyond that. I’m still trying to understand them.

Peter, you’re absolutely right. The members do have ultimate power. And as I mentioned, most are satisfied.

Thank you all for the comments you posted. As I said, they have given me food for thought.

Even if the board has done something improper, the majority of the members would not want to criticize people who do so much for them. The best I can do as an individual, I think, is to write a letter stating my concerns.

Other changes to the Bylaws include less stringent meeting notification requirements and the right of a board majority to remove their elected fellows. Oddly, the section requiring that Bylaws amendments be made at a meeting of members was not changed, even though there had been no meetings either to discuss or to vote on the many changes in these restated documents. When I pointed this out, I was told that the board may change the bylaws any time, as they wish.

We'll see how it all pans out. Thanks again.

I would check with your state, I believe someone said earlier bylaws in Florida are filed somewhere...As to the change, I think it is a bad change and hope you obtained the opinion of your lawyer before doing so. Decisions outside of a meeting should be reserved for emergencies and should take unamious approval in my opinion.

Melissa, thanks for clarifying the distinction between the bylaws and CC&R. Our CC&R includes the bylaws and articles of incorporation as exhibits, so they are all contained in the same document and thus recorded together. Our bylaws describe how they may be amended: "These Bylaws may be amended, at a regular or special meeting of members, by vote of a majority of a quorum of members present in person or by proxy."

It seems to me that the board really can do whatever it wants until somebody takes it to task. That isn't likely to happen, considering the time and expense involved, unless a situation develops where the potential loss to a party is significant enough to make such expense worthwhile.

I am not saying you don't need By-laws. By-laws just aren't required to be filed. That doesn't mean they aren't necessary. They are the documents that help guide the operation of the HOA like elections, budget creating, and defining positions etc...

CC&R's are like the outline of a book. The By-laws is the book. The book keeps changing while the CC&R's keeps everything in the lines.

Thanks BradP...After I posted, my statement about different state rules on the matter was accidently deleted by me. Mia culpa...

To wrap my thoughts up on this I look at any proposed change not as how it would affect the current board but how would it impact the most corrupt individuals on the earth. I think giving them more reign to circumvent open meeting laws is not good. While jumping through hoops is a pain, the hoops are there for a reason. I can forsee with this change some political postering and decisions made not in the best interest of the community but in the best interest of some individuals. Hopefully it isn't that case but lessening restrictions is not always a good idea.

Becky,

As others said, and I agree, the new bylaw most likely won't stand up to a legal challenge.

THE PROBLEM IS, that unless someone actually challenges it (causing expense for both sides) or a Board acknowledges the error and takes steps to correct it, the wording will stand and people will make decisions based on the wording.

I would advise that you have the Board run the documents past an attorney for a legal opinion.

Tim

Becky:

without seeing the rest of your bylaws, CC&R's I am not sure but i highly doubt this was a legal vote. for example, my documents say that changing the bylaws has to be done at a meeting called for that purpose, notice must be sent of the date, time, place and must be sent no sooner than 60 days out and no later than 10 days prior. We are only allowed to vote in person or by proxy.

It is possible some other forms of voting are allowed in yours but not voting at a meeting sound fishy at best.

Tim, according to the Board, the proposal was run by a lawyer, who approved the changes. This was stated on the cover letter when the revisions were distributed to members. I questioned the board about it, because I wanted to make sure it really happened. I felt sure that some owners would regard such approval as justification for not reading the proposal thoroughly themselves. Most are probably not very familiar with the governing docs, and this long proposal was so marked up (contained both versions, interlarded) that was not easy to make sense of. For me, anyway. I was told that the proposal was e-mailed to the lawyer who e-mailed it back with notations for 1)changes to be in compliance with law; and 2) suggested changes. The committee made all the necessary changes and as many of the suggested ones as they agreed with. So, in short: yes, a lawyer looked it over.

Becky:
I agree with Brad. In addition, I would do an analysis of the proposed bylaw changes and make sure there is nothing homeowner-unfriendly in them. The fact that an attorney saw them means nothing. Your board has acted rather badly in trying to fly this revision by you. You have to wonder when things are not carefully explained to the homeowners.
Jeanne

Thanks for your comment, Jeanne. I agree that only an informed membership can make good decisions!