Authorization of an action by written consent

I'm trying to understand Florida Statute 617.0701(4). Bellow is what I think it says, followed by the actual statute. Thanks to anyone who wants to read it over and give an opinion.

Authorization by written consent (for associations organized under FS617):

Unless an association’s articles of incorporation provide an alternative, any action that FS617 allows to be taken at a meeting of members can be taken without a meeting if these conditions are met:

•The action is approved by at least the same number of members as would be necessary if the decision had been made at a proper meeting.

•Each of those approving the action gives their written consent, signed and dated, to the official assigned to collect it.

•The minimum number of consents is received within 90 days.

The action is considered to be authorized as soon as the minimun number of consents has been received. An action authorized in this way is as effective as if it were approved of by vote at a proper meeting, though it must be described as a written consent.

There are a few further requirements:

•Within thirty days of an authorization by written consent, members who have not consented must be notified and given a fair summary of the action taken.

•Either the collected signed consents or a written report of the tally must be filed with the minutes of member proceedings.

Here's the actual statute:

617.0701 Meetings of members, generally; failure to hold annual meeting; special meeting; consent to corporate actions without meetings; waiver of notice of meetings.—
(4)Unless otherwise provided in the articles of incorporation, action required or permitted by this chapter to be taken at an annual or special meeting of members may be taken without a meeting, without prior notice, and without a vote if the action is taken by the members entitled to vote on such action and having not less than the minimum number of votes necessary to authorize such action at a meeting at which all members entitled to vote on such action were present and voted.
 (a)To be effective, the action must be evidenced by one or more written consents describing the action taken, dated and signed by approving members having the requisite number of votes and entitled to vote on such action, and delivered to the corporation to its principal office in this state, its principal place of business, the corporate secretary, or another officer or agent of the corporation having custody of the book in which proceedings of meetings of members are recorded. Written consent to take the corporate action referred to in the consent is not effective unless the consent is signed by members having the requisite number of votes necessary to authorize the action within 90 days after the date of the earliest dated consent and is delivered in the manner required by this section.
 (b)Any written consent may be revoked prior to the date that the corporation receives the required number of consents to authorize the proposed action. A revocation is not effective unless in writing and until received by the corporation at its principal office in this state or its principal place of business, or received by the corporate secretary or other officer or agent of the corporation having custody of the book in which proceedings of meetings of members are recorded.
 (c)Within 30 days after obtaining authorization by written consent, notice must be given to those members who are entitled to vote on the action but who have not consented in writing. The notice must fairly summarize the material features of the authorized action.
 (d)A consent signed under this section has the effect of a meeting vote and may be described as such in any document.
 (e)If the action to which the members consent is such as would have required the filing of articles or a certificate under any other section of this chapter if such action had been voted on by members at a meeting, the articles or certificate filed under such other section must state that written consent has been given in accordance with this section.
 (f)Whenever action is taken pursuant to this section, the written consent of the members consenting to such action or the written reports of inspectors appointed to tabulate such consents must be filed with the minutes of member proceedings.

Susan, this is related to the issue I wrote about previously, the revision of our association's governing documents outside of a member meeting. The board had mentioned proxys, and I know those must be used at a meeting. Likeways votes and ballots. Written consent, though, seems to apply. When I looked at the statute closely I wasn't sure I understood it correctly, so I spent a little while this afternoon trying to rephrase it in simple language. If I got it right, it does apply.

Thanks.

Thanks, Tim. It looks like we both have about the same interpretation. What situations do you think this statute was written to apply to? I have the same issues with this as I do with the board making decisions outside a board meeting. The laws (720, 617) go to such lengths to protect members' rights -- to meetings properly conducted and announced, votes properly taken and counted, records properly kept and available for review -- and then it provides these exceptions! It is as if it says, "Okay, you have to do this, this, and this, unless your documents provide otherwise" and "You have to do thus and such at a properly announced meeting, unless you'd rather not."

My problem is that when you allow an exception like decisions made outside of a meeting, then you must make take extra care to make sure members' rights are not compromised, because the usual controls are overridden. The onus now falls on the membership to verify that the action has been fairly taken.

Peter, thanks for your input. That FS617 applies to all corporations not for profit, not just HOAs, is a good point. In our case, most members are in residence and so would be able to attend a member's meeting, if one had been held to discuss the amending of our documents.

Two-thirds approval was needed for the amendments to pass, and the board managed to get that in their door-to-door campaign. Interestingly, the next time they want to amend the declarations they won't have to work quite so hard, because the section that stipulates this majority has been changed. It now reads "2/3 of the RESPONDING members" rather than "2/3 of the members." Those who don't respond won't be counted at all.

But a written consent is not a meeting. It offers no opportunity for member discussion. There are no specific notification or quorum requirements. Approval ought to be more difficult to attain so this method of decision-making will not be used in preference to a properly announced and conducted meeting of members.

Peter are you saying there are quorum requirements for a written consent? How can that be when there is no meeting?

Becky,

Some things can not be done by written consent due to the language stated in the governing documents.

Most documents have lines like:

At a meeting called for this purpose
or
This [document] may be amended at a regular or special meeting of the members

The other concern is FL 720.306 which may prohibit having an action without meeting as it states [emphasis added]:

"Unless otherwise provided in this chapter or in the articles of incorporation or bylaws, decisions that require a vote of the members must be made by the concurrence of at least a majority of the voting interests present, in person or by proxy, at a meeting at which a quorum has been attained."

Therefore, since 617.0701 uses the word "may", an action by written consent is optional unless something else says it's not (governing documents, laws, etc.). The language I cited in 720.306 uses the word "must" which prohibits the option of the "may" in 617.0701.

Bottom line is, based on FL 720 (and I expect FL 718) anything requiring a vote by the membership must be done at a meeting of the membership and a quorum must be present for business to be conducted.

As Peter said, 617 applied to all non-profit corporations. However, since there are HOA/Condo laws in addition to the corporate law, the Association must comply with both sets of laws. In this instance, the HOA laws control.

I know it's not what you wanted to hear, but that appears to be the way it is.

Tim

Tim, I think I understand you. The section of our CC&R that addresses amendments reads: "Covenants and restrictions of this Declaration may be amended by duly recording an instrument indicating acknowledgement by not less than two-thirds of the Owners."

As you see, a meeting is not mentioned.

When filed with the county clerk, the board signed this statement: "We hereby certify that the attached amendments were duly adopted by the membership per a written ballot."

The ONLY way I could think this had been properly done was by written consent per FS617.0701.

WOAH! Do others here have the same interpretation? Might it mean something specific in FL law?

I think you're right that the authors meant "approval" though they used the word "acknowledgment." The current board has interpreted it as approval, and I don't think they would do otherwise. So far, so good.

Thanks for the examples you gave from your asociation. They raise a question: I notice that covenant changes require approval (by vote, certainly) but the requirement for a meeting is not mentioned, as it is for bylaws changes. Does a vote necessarily imply a meeting? If approval is given by some means (written consent? Written ballot??)outside of a meeting, how is fairness (due process) assured?

I have come to the conclusion after our discussion here that the vote taken dooor-to-door (some mailed, some e-mailed) by "written ballot" in my association was probably not proper and could not be defended. I will ask our board to ask their lawyer for an opinion.

Thanks for all your input, Tim (and others). Much, much appreciated.

Susan, here are the sections that address amendments for each of our 3 governing documents:

Covenants, Conditions and Restrictions:
“Covenants and restrictions of this Declaration may be amended by duly recording an instrument indicating acknowledgment by not less than 2/3 of the owners.” (This was recently changed to add the word “responding” before “owners.”)

Bylaws:
“These bylaws may be amended at a general or special meeting of members by vote of a majority of a quorum present in person or by proxy.”

Articles of Incorporation:
No amendment procedure is given, so FS 720.306(1)(a) applies: “Unless otherwise provided in this chapter or in the articles of incorporation or bylaws, decisions that require a vote of the members must be made by the concurrence of at least a majority of the voting interests present, in person or by proxy, at a meeting at which a quorum has been attained.”

Shoot,

I looked at Bylaws and not the CC&Rs. My mistake (wish we could edit or delete posts).

Disregard my last. Per your posting, the bylaws must be amended by the membership.

I also think that the amendments to your CC&Rs were done properly based on the language contained in them. Especially since the Board did a mail-in vote on the changes.

Tim

It could be interpreted as just identifying the quorum requirement for any authorization that a meeting had to be called for.

Your documents indicate that the membership doesn't have to authorize any changes to the CC&Rs, they just have to acknowledge that the change happened.

You said it all.

Last year we received a bill for a 15 min. phone call from our attorney. This invoice led to 2 new policy resolutions, a search for missing records and revamping our disclosure package. Therefore, I've started to remember something I leaned in the Navy:

Only ask questions to those things you really want to know the answer to.