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Subject: What issues should the membership vote on?
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Author Messages
TimB4
(Virginia)

Posts:8125


07/30/2013 3:02 AM  
All,

As there have been comments that power should belong to the membership and not the Board, it had me wonder what do people believe the membership should be voting on?
However, rather than a free for all lets keep in mind the following:

Costs: Lets take an average and say it costs $90 per 100 members ($46 postage, $30 printing of notice, agenda, ballot, $10 envelopes, $4 labels and ink) to hold a general meeting of the membership (so a vote may take place).

Timeliness: Most votes by the membership can take from 14-30 days depending on notice requirements.

Keeping those things in mind, please voice an opinion on the following:

1) What must your members vote on now.

2) If you were writing the initial set of documents, what issues would you require be taken to the membership for a vote?


TimB4
(Virginia)

Posts:8125


07/30/2013 3:13 AM  
1) Our Association requires membership votes on the following:

Election of new Director/s at when Director term ends.
Annual Increase in Assessments >5% (Board may raise assessments up to 5%)
Special Assessments
Amendments to the CC&Rs
Amendments to the Articles of Incorporation
Amendments to the Bylaws
Mergers
Abolishing the Corporation known as HOA, Inc.
Abolishing the CC&Rs (as a whole)

2) I personally believe that the membership should also vote on (i.e. Board or committee proposes and membership votes):

Architectural Guidelines
Major Additions to Capital Components
TimB4
(Virginia)

Posts:8125


07/30/2013 3:16 AM  
Dang lack of edit.

I want to add under #2:

Initiating legal action (does not include filing liens)
GlenL
(Ohio)

Posts:4883


07/30/2013 3:37 AM  
To elect a board of directors
To remove directors from the board
To call special meetings of the membership
To amend the CC&Rs and bylaws
To approve rules or in CA the power to veto rules
In some states and per different CC&R's they also have the power to approve budgets and Special Assessments. In OH for a COA they must fund the reserves or the H/O's must vote each year to allow for the possibility of S/A.

"Of all the things I've lost, I miss my mind the most." - Mark Twain
MatthewW4
(Arizona)

Posts:500


07/30/2013 7:29 AM  
Posted By TimB4 on 07/30/2013 3:02 AM

1) What must your members vote on now.



Annual vote for directors

Posted By TimB4 on 07/30/2013 3:02 AM

2) If you were writing the initial set of documents, what issues would you require be taken to the membership for a vote?



Except for electing directors, nothing should routinely require membership approval. Votes on any action by the board should be subject to being overturned by the members at any special or regular member meeting. Otherwise, the board should be free to conduct the business of the association without seeking member ratification on any issue.
MatthewW4
(Arizona)

Posts:500


07/30/2013 7:35 AM  
Tim,

I took "must" differently than you did. Our members "may" vote on many of the items you listed as some of them are required by law. Our only required vote is the election of directors.
SheliaH
(Indiana)

Posts:691


07/30/2013 7:43 AM  
1) Besides voting for members of the Board of Directors (simple majority), our CCRs call for homeowner approval of 75% or more for

Amendments to the CCRs or Bylaws
Increasing assessment over 5% from the current year
Special assessments

100% approval is needed for the Association to sell 2 acres of undeveloped land

2) Because of language in the Declaration, any vote on the undeveloped land requires 100% approval (regardless of whether a homeowner is delinquent or involved in a lawsuit with the Association as a plaintiff or defendant). I have no problem with that because everyone should weigh on what a buyer might do to it (after all, our community’s quality of life and property values could be helped or harmed)

As for CCR/Bylaw amendments, special assessments and fee increases exceeding 5%, I would still take these issues to the members, but would lower the approval rate to 51%. Sadly, there are people who just won’t participate in Association elections for whatever reason, and sometimes that can impede significant progress on an issue. For example, our swimming pool vote is in its second year and we recently had to spend more money to send another letter to the 64 remaining owners urging them to vote on whether it should be closed permanently or repaired and reopened (it’s been closed for 4 years now due to finances).

I’d also limit voting rights to owners in good standing, defining “good standing” as someone who’s current in all assessments and not involved in any litigation against the association (. Most votes involve money, directly or indirectly, so if someone’s delinquent, why should he or she have any say on things like special assessments (if they don’t want to lose their right to vote, they should pay the damned regular assessments in full and on time!) As for litigation, the issue prompting an amendment to the CCRs may be the heart of a lawsuit and therefore the member suing or being sued may have a conflict of interest.

As for proxies, I would limit them to Board elections only. I would also add provisions for electronic voting
MatthewW4
(Arizona)

Posts:500


07/30/2013 7:46 AM  
Posted By TimB4 on 07/30/2013 3:16 AM

I want to add under #2:

Initiating legal action (does not include filing liens)



Taking legal action usually involves confidential discussions with attorneys and many states permit these discussions to be held in executive or closed board meetings. My association has 1600 members scattered all over the world. Nothing would remain confidential very long. Bad idea.
MatthewW4
(Arizona)

Posts:500


07/30/2013 9:02 AM  
Posted By TimB4 on 07/30/2013 3:13 AM
1) Our Association requires membership votes on the following:

Amendments to the CC&Rs
Mergers
Abolishing the Corporation known as HOA, Inc.
Abolishing the CC&Rs (as a whole)




I am curious.

Most of the handful of declarations that I have read have provisions for amendment, which would also include amending to abolish the HOA and/or amending to abolish the entire declaration, or amending to merge with another association. I have not seen any that permit a vote. Rather, the ones I have read all have some requirement for a specified minimum percentage of owners "executing an instrument" (which I take to mean signing a document approving the amendment) and then recording the "instrument."

What is the wording in your declaration that provides for voting, as opposed to executing and recording a document?

TimB4
(Virginia)

Posts:8125


07/30/2013 7:20 PM  
Posted By MatthewW4 on 07/30/2013 9:02 AM

What is the wording in your declaration that provides for voting, as opposed to executing and recording a document?




require the affirmative vote of


The Association may be dissolved at an Annual or Special Meeting by vote of seventy-five percent (75%) of the Members of each Class
JohnC46
(South Carolina)

Posts:3560


07/31/2013 4:59 AM  
As Matt said:

Except for electing directors, nothing should routinely require membership approval. Votes on any action by the board should be subject to being overturned by the members at any special or regular member meeting. Otherwise, the board should be free to conduct the business of the association without seeking member ratification on any issue.

I agree. We do not need a BOD being micro managed.
GlenL
(Ohio)

Posts:4883


07/31/2013 5:15 AM  
John there was someone who posted here five or six years ago who came up with a complex scheme to examine every vote of his BOD. Every action whether yes or no would be run by the membership to see if there was enough interest to hold a Special Meeting to vote to counteract the Board's vote. Talk about micromanaging but he had a real nice PowerPoint presentation for it. I tryed to attach it and if it works just click on read-only.

Attachment: 173115512071.ppt


"Of all the things I've lost, I miss my mind the most." - Mark Twain
EricH8
(Oregon)

Posts:60


07/31/2013 3:41 PM  
Posted By MatthewW4
Votes on any action by the board should be subject to being overturned by the members at any special or regular member meeting.
That is the answer I was hoping for to resolve some issues at my HOA. The board's attorney claims it takes a 75% majority of the members (to amend the Bylaws) in order to overturn a resolution created by the board.
Posted By SheliaH
I’d also limit voting rights to owners in good standing, defining “good standing” as someone who’s current in all assessments and not involved in any litigation against the association (. Most votes involve money, directly or indirectly, so if someone’s delinquent, why should he or she have any say on things like special assessments
Anyone who is behind on their assessments will ultimately pay extra in late fees and legal fees. Unless they abandon their property, in which case they probably won't benefit from their votes anyway.
Posted By SheliaH
As for proxies, I would limit them to Board elections only.
What gives you the right to prevent other members from voting by proxy?
JohnC46
(South Carolina)

Posts:3560


07/31/2013 4:47 PM  
Eric

DO not confuse BOD Rules and Regulations (Resolutions) with Covenants/Bylaws. I would question the attorney about the amount of owners required to overturn BOD Rules and Regulation (Resolutions) versus the amount required to amend Covenants/Bylaws.

If the same 75% required then it might just be easier to recall the BOD and void their Resolutions.


EricH8
(Oregon)

Posts:60


07/31/2013 7:35 PM  
I'm not confused about BOD rules verses Bylaws. I am confused about whether the homeowners and the board could create contradictory rules. Our Bylaws say
"decisions and resolutions of the Association shall require approval by a majority of voting owners present at any legal meeting."
That says the owners can create resolutions(?) But our Bylaws also say the BOD may create rules or regulations of the Association. Oregon law also says the board may create resolutions. Our previous board created a Resolution to Create Resolutions that says
"the Board of Directors shall draw up a Final Draft of the Resolution that gives consideration to the will of the majority of the membership of the Association."
Our board has not asked the owners to vote to approve the board's resolutions, so it is not clear what "gives consideration to the will of the majority of the membership of the Association."

When the board passed a controversial resolution, their attorney defended the board's resolution by writing:
Owners who disagree have three options:
(1) Elect directors who agree with you. A new Board could rescind the resolution as easily as the current Board enacted it.
(2) Amend your Bylaws. If a majority of owners agree, they could pass an amendment to your Bylaws which would trump the Board’s resolution.
(3) File a lawsuit against the Association. Or violate the rule, refuse to pay the fine, and wait for the Association to sue you.
SheliaH
(Indiana)

Posts:691


08/02/2013 7:33 AM  
Posted By EricH8 on 07/31/2013 3:41 PM
Posted By MatthewW4
Votes on any action by the board should be subject to being overturned by the members at any special or regular member meeting.
That is the answer I was hoping for to resolve some issues at my HOA. The board's attorney claims it takes a 75% majority of the members (to amend the Bylaws) in order to overturn a resolution created by the board.
Posted By SheliaH
I’d also limit voting rights to owners in good standing, defining “good standing” as someone who’s current in all assessments and not involved in any litigation against the association (. Most votes involve money, directly or indirectly, so if someone’s delinquent, why should he or she have any say on things like special assessments
Anyone who is behind on their assessments will ultimately pay extra in late fees and legal fees. Unless they abandon their property, in which case they probably won't benefit from their votes anyway.
Posted By SheliaH
As for proxies, I would limit them to Board elections only.
What gives you the right to prevent other members from voting by proxy?




In our community we have staggered Board elections every year, whereas CCR amendments may come about every two or three years. It's much easier to get rid of a rouge board member as opposed to amending governing documents which have long lasting implications for the community - and that's why I want actual homeowners to cast an actual vote instead of issuing a proxy.

Although our community has been very fortunate in that we haven't had any issues on proxy voting for board members, I'm sure if you look elsewhere on this site you'll find people who've complained about the wording of the proxy, who completed the proxy, how long can it be considered valid and so on. We prefer to avoid that problem with every election by limiting proxy use to Board elections. Homeowners can also use it to establish quorum so our annual meeting can be held.

Oh, and the current CCRs require that homeowners sign off on amendments and their signatures on the form be notarized, so that eliminates proxy use (unless of course we amend our CCRs yet again - which is a long, sad story around here).
SheliaH
(Indiana)

Posts:691


08/02/2013 7:33 AM  
Posted By EricH8 on 07/31/2013 3:41 PM
Posted By MatthewW4
Votes on any action by the board should be subject to being overturned by the members at any special or regular member meeting.
That is the answer I was hoping for to resolve some issues at my HOA. The board's attorney claims it takes a 75% majority of the members (to amend the Bylaws) in order to overturn a resolution created by the board.
Posted By SheliaH
I’d also limit voting rights to owners in good standing, defining “good standing” as someone who’s current in all assessments and not involved in any litigation against the association (. Most votes involve money, directly or indirectly, so if someone’s delinquent, why should he or she have any say on things like special assessments
Anyone who is behind on their assessments will ultimately pay extra in late fees and legal fees. Unless they abandon their property, in which case they probably won't benefit from their votes anyway.
Posted By SheliaH
As for proxies, I would limit them to Board elections only.
What gives you the right to prevent other members from voting by proxy?




In our community we have staggered Board elections every year, whereas CCR amendments may come about every two or three years. It's much easier to get rid of a rouge board member as opposed to amending governing documents which have long lasting implications for the community - and that's why I want actual homeowners to cast an actual vote instead of issuing a proxy.

Although our community has been very fortunate in that we haven't had any issues on proxy voting for board members, I'm sure if you look elsewhere on this site you'll find people who've complained about the wording of the proxy, who completed the proxy, how long can it be considered valid and so on. We prefer to avoid that problem with every election by limiting proxy use to Board elections. Homeowners can also use it to establish quorum so our annual meeting can be held.

Oh, and the current CCRs require that homeowners sign off on amendments and their signatures on the form be notarized, so that eliminates proxy use (unless of course we amend our CCRs yet again - which is a long, sad story around here).
RichardP13
(California)

Posts:1339


08/02/2013 9:33 AM  
Board of Directors-we eliminated the need for quorum for all meetings. Out of a membership of 317, if 10% vote, those votes should be opened and counted. If communities can't reach quorum, then problems will arise as only friends will be appointed. Recalls become very nasty and distasteful, after-all, they are your neighbors. All other actions require an affirmative vote from a majority of one-third to a maximum of 66 2/3 (CCRs)

Board Resolutions or Rule and Regulation changes can be overturned by a majority of votes from attendees at a specially called meeting.

Architectural Guidelines changes and Capital Additions would require a 66 2/3 affirmative approval.

Initiating legal action (possibly with an amount over a specific limit) MUST be approved by the membership. I saw a non Board approved lawsuit costing over $200K buried in the financials with the explanation that it was for "liens and foreclosures".
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