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AlbertC
(New Jersey)

Posts:10

07/25/2008 10:50 PM
I would appreciate some opinions on this question because of conflicting answers that have been presented by our attorney. My question is: who is the ultimate authority in a membership nonprofit corporation, like our HOA. Is the BOD or the membership? Information that I have researched from “non profit corp. law” states that in a corporation with members that the Board is subordinate to the membership, that the membership can overturn any action of the board (except contracts that are already completed) but the board cannot overturn an action taken by the membership. Also, I interpret, from Robert’s Rules, basically the same meaning pertaining to a deliberative body of the society. The bylaws say that the BOD is a governing body elected by the membership to administer the policies and will act for the association. Our President and attorney say that if any motions are passed at a legally convened meeting of the members the BOD is not bound to act to those motions. My question would then be, what is the purpose of having a membership meeting? (We have four quarterly membership meetings a year, and twelve open Board meetings a year)
Attachment: 172550392771.doc

RobertR1
(South Carolina)

Posts:2074

07/26/2008 2:30 AM
Albert, Are you saying at a Open meeting a motion is made, seconded and carried out by the membership and the Board will not or is not mandated to act on the motion? The Board cannot override the membership, if, the membership votes in abidence with the By-laws. First consider the membership can recall all the Board with a super majority as called for by your documents. If this is true, then the membership can overide anything the Board does, and I am sure there are constraints, but it is true basically. Can a majority of members walk into a Board Meeting and overturn a board action? I doubt it, a specific majority will be needed and that is almost impossible to get normally. Can a group of members turn up at a meeting and by any vote overturn a board decision.......no way Jose, even if you are talking a majority of the members present. I think your assumption that the Highest authority in an association is the membership is right, but that majority number of the membership to override may be different for specific isues. How do you allow your association to come to this crossroads? The Board, the members must be willing to reach compromise or nothing will work. The membership has authority to recall any person on the Board. The Board has the authority to run the business. Both parties have the responsibility to ressolve all issues for the good (not detriment) of the association. That's pretty much the framework, so pick your side and have at it, if you may, but, in the end, the right thing to do is what benefits the association. And that is why we have discussion and compromise, to achieve those aims. But, all the above is to no avail at times, but, it is not becaused the premise is flawed, it is because we are flawed.

RogerB
(Colorado)

Posts:3694

07/26/2008 5:19 AM
Albert, the Board has the powers and duties vested by your Bylaws. If your Bylaws do not provide the authority for the members to make decisions which must be carried out by the Board then an easy solution to your problem is to amend the Bylaws to make that clear. Having said that I think the Board should listen to and follow directives made by motions passed by the members. If certain Board members don't then the members can remove them from the Board. Those are two of the purposes for having members meetings.

Roger Borcherding Official HOATalk.com Sponsor DARCO Property Management (Colorado) (303) 925-0150 *See legal notice below (end of page) or go to www.hoatalk.com/legal

JohnM3
(Florida)

Posts:208

07/26/2008 11:39 AM
Roger you got that slightly wrong The members elect the BOD to make decisions and the BOD is the final authority. The members have the authority to vote the bod out of office they do not make desicions that is the BOD job............If the members dont like what there BOD does they impeach or vote them out. At npo time are the members above the BOD. The board serves because it is elected to there position??????????

SusanW1
(Michigan)

Posts:2117

07/26/2008 12:33 PM
The Board is responsible to implement any motion passed by the membership at the Annual Meeting IF it is not in conflict with the Articles, CCRs, any other bylaws,or state or local laws and is not illegal. AND if it is within the Members "power" - and not a conflicting power of the Board. Also, the motion MAY have required notice to members, and that would also be a consideration. At our last Annual Meeting, there was discussion on canal dredging. There was a motion from a member to establish a committee and hire a consultant to conduct a feasibility study of the project. That was a directive to the Board to do that. Go thru your bylaws and see what the powers of the Board are. The membership cannot have the same power. Can you share with us the motions that were passed by the membership at your meeting?

RogerB
(Colorado)

Posts:3694

07/26/2008 12:39 PM
Posted By JohnM3 on 07/26/2008 11:39 AM Roger you got that slightly wrong The members elect the BOD to make decisions and the BOD is the final authority. The members have the authority to vote the bod out of office they do not make desicions that is the BOD job............If the members dont like what there BOD does they impeach or vote them out. At npo time are the members above the BOD. The board serves because it is elected to there position?????????? Seems like you are agreeing with me John. What part is slightly wrong? Did I not present it with sufficient clarity to be understood?

Roger Borcherding Official HOATalk.com Sponsor DARCO Property Management (Colorado) (303) 925-0150 *See legal notice below (end of page) or go to www.hoatalk.com/legal

RobertR1
(South Carolina)

Posts:2074

07/26/2008 4:28 PM
Roger and John. I agree with both of you and disagree with neither.

AlbertC
(New Jersey)

Posts:10

07/26/2008 6:37 PM
Thanks for your thoughts but this is the reason I asked the question. The BOD and the ass’n attorney joined in disallowing the motions, which I don’t feel they have the authority to do and really the motions are permissible as advised by a registered parliamentarian. One motion was to have the four Membership meetings at night to accommodate more members to attend because many are still working. The next was to form a committee from the floor to review and make recommendations back to the membership on provisions of our governing documents that are coming up for revision. (This is to allow input back to the bylaws committee from the membership) and third was to adopt as a standing rule, RRNR, as our parliamentary authority. I didn’t receive any comment to the attachment that I gave pertaining to Nonprofit Corporation Law. Were you able to receive this attachment? As far as the Board and the membership willing to compromise is a noble thought but in the real world this is not the case.

RobertR1
(South Carolina)

Posts:2074

07/26/2008 7:24 PM
Albert, I personally don't see any problem with your motions. I would strongly tend to believe that the Board would have to explain in writing why they would not entertain the motion. Did you say this was a regular meeting or an Annual meeting? Annual meeting have to have a quorum and then they can vote the membership. Board meetings do not require a membership Quorum and I suppose a motion of the kind you made would require a full membership vote at an annual meeting. Check with your Parlimentarian. The motion to form a committe, to me is a Presidents authority, certainly without a quroum vote by membdership. And Albert, this is the real world, and if you would consider it, you will find that most government issues and disagreements are usually settled by discusion and compromises. Something I have learned and I don't profess to be a mover or shaker; take baby steps and gnaw at your disagreements a little piece at a time.

MaryA1
(Arizona)

Posts:2157

07/27/2008 12:58 AM
Posted By AlbertC on 07/25/2008 10:50 PM Our President and attorney say that if any motions are passed at a legally convened meeting of the members the BOD is not bound to act to those motions. My question would then be, what is the purpose of having a membership meeting? (We have four quarterly membership meetings a year, and twelve open Board meetings a year) I can imagine the board saying this, but I'm surprised an attorney would agree. IMO, any motion made and passed by the membership at a meeting of the members, where a quorum was present, would be legally enforceable, unless it was a direct violation of the gov. docs of the assn or applicable state law. Although the board is charged with managing the assn, the members make up the assn. W/o members there would be no assn!

GeorgerwilliamsW
(Indiana)

Posts:705

07/27/2008 3:18 AM
While discussion on this issue may be interesting, please keep in mind that opinions (except those of a court) don't count. The law in each state is different, and, indeed, in some cases and in some states, the board of directors is not obligated to act by direction of a majority vote of the members. In forming a corporation under state law, rather than operating as an unincorporated association that chooses to be governed by "Robert's Rules of Order," members delegate without recourse certain powers to an elected board--and they obligate themselves to operate under state statues and case law. Further complicating the issue is the "grayness" and expansiveness of not for profit corporate statues. Some not for profits are organized to serve community, charitable interests beyond simply membership, while others are organized to benefit only their members. How laws apply in each case can be different. Just as some states enable voters to enact laws by referendum and others do not, some states enable members to overturn action by the board of directors and some do not. In addition to researching the statutes, one also needs to look at case law to determine how courts may have interpreted those statutes, particularly in situations where laws conflict. There is one informal legal opinion on the table that the board in New Jersey is not bound by a membership vote. It may be intentionally designed to deflect your efforts to enact a change, or it may be an accurate statement of the law. It may be an example in which the board of directors is acting correctly under law, but not acting in the best interests of owners. Aside from engaging an attorney to represent you and potentially file suit, that may not be much you can do until the current board membership changes. Whether this is an abuse of power is something only members can decide.

RobertR1
(South Carolina)

Posts:2074

07/27/2008 4:55 AM
GeorgeWiliamsW, A very astute observation and certainly more right than wrong. You do realize that the discrepancies you point out is part of the reason for sites like this. We just can't be accuarate in all we post. We give opinions and hope for the best........bottom line. And this particular post, if you follow it's maturity, will end up like many others. Rational discussion tempers emotions and knowledge breds caution and finding different ways to skin the same cat. It would be nice to say, never contact another attorney and fight all your problems out in the ring set up at the community building. But it won't work. Nor will relience on a Lawyer for all your operating needs. So you stumble along, just like this thread until some one, on some post rings a bell with the one seeking help and he takes a little or lot from our posts and goes off to do the best he can. Al least, that is what I do, and after being through the drill so many times those things that I swear I was not going to stand for become smaller, and I compromise more, get no complete victories and settle for a little piece here and there. This post is certainly not the post to end all posts and lots of questions are not answered, but I know, just around the cornor is another incident waiting to happen that will push all this in the background. Look at the files in the search feature on this site...............

SusanW1
(Michigan)

Posts:2117

07/27/2008 6:03 AM
They would have had to give a reason for "disallowing" the motions. That whole procedure should have been documented in the minutes, for example: "Joe Smith moved that XXX. The chair disallowed the motion, stating that the motion conflicted with the CCRS. Motion was withdrawn." You said: "One motion was to have the four Membership meetings at night to accommodate more members to attend because many are still working." IF the bylaws say that the Board sets the meetings, then this could be disallowed. (out of order) You said: "The next was to form a committee from the floor to review and make recommendations back to the membership on provisions of our governing documents that are coming up for revision. (This is to allow input back to the bylaws committee from the membership)" What is your procedure for amending the bylaws? Usually there is a Standing Bylaws Committee that is constantly reviewing the bylaws. The membership of this committee involves many residents and a liaison from the Board who may or may not chair the committee. The committee reports to the Board. You need to go over the procedure for how amendments are done to your documents. You said: "third was to adopt as a standing rule, RRNR, as our parliamentary authority." You may be able to do this for the Annual Meeting, but you can't choose a parlimentary procedure for ALL meetings. What is the Board using at the momment? Why was the motion needed?

RobertR1
(South Carolina)

Posts:2074

07/27/2008 6:22 AM
To all, I suppose someone has touched on this. If the exercise is to get changes made and new ideas considered, I wonder if any of these "motions" are proper. I can't imagine a Board just turning down the substance of these "motions." Maybe they should have been made as suggestions to the Board, request that they be made part of the minutes, with a time restraint for the Board to respond at the next meeting. If after consideration the board publically rejects the substance, then take the whole thing to the annual meeting with some strong support for their adoption and have the guns at the meeting that will assure a vote (support).

BruceF1
(Connecticut)

Posts:529

07/27/2008 8:41 AM
This is an interesting discussion. At first, I would be inclined to agree that the members of the association have the final say over the board. In many societies, that's exactly how it works; the board is subordinate to the membership. However, after carefully reading some of the comments posted here, our own state laws, our governing documents, and Robert's Rules, I'm now inclined to agree with what RogerB stated. Whether it is the members, or the board, that has the final say, really depends on how the laws and the governing documents are worded. It could be different for everybody. There is no one universal answer saying it's always this way. In reviewing our state laws on homeowners associations and on corporations, the laws are silent on the issue of who (members vs board) has the final say. Instead, CT law leaves those issues up to the certificate of incorporation, the declaration (CCRs), and the bylaws. Recalling what Robert's Rules has to say about bylaws, and from having seen the bylaws of many different organizations that I have been a member of, many bylaws include articles such as "Membership", "Executive Board", "Officers", and so forth. These articles generally define the qualifications, the duties, and obligations of each, and most importantly for this discussion, the powers or authority of each. Thus, it would seem to me that the bylaws should clearly state that the final authority rests with the members. Instead, the bylaws may confer final authority on the executive board. If that is the case, then it would appear to me that the board would not be obligated to follow any motions passed by the general membership at any meeting, whether ot not such motions conflict with the governing documents or state law. Reviewing our own documents, both our CCRs and our bylaws contain the same wording, stating that the executive board may "in all instances" act on behalf of the association. There are a few, enumerated, exceptions, and those rights and powers are conferred upon the membership. No others are identified, nor is the right to overrule the board granted. The only right granted to the membership (clearly stated) is the right to "review and comment" on certain actions of the board. There is no obligation for the board to adhere to any of the comments. Even the right to amend the bylaws is conferred "only" on the board (so stated, which is why "only" appears in quotes). The authority to amend the CCRs, however, rests with the membership (so stated). The members have the "final say" over the board only in that they can recall the members of the board if they don't agree with the actions of the board. There is no right granted to the members to override the actions of the board nor to require specific actions of the board. Everyone's documents and bylaws may say something different, so the rights of the membership vs the board may be different. In the final analysis, I believe what Roger has said is correct: who has the final authority will be determined by the wording in the bylaws (or CCRs). I would say, read them carefully to make sure they say what you think they say.

JohnK3
(Pennsylvania)

Posts:438

07/27/2008 9:05 AM
Bruce writes: >>>The members have the "final say" over the board only in that they can recall the members of the board if they don't agree with the actions of the board. There is no right granted to the members to override the actions of the board nor to require specific actions of the board. Everyone's documents and bylaws may say something different, so the rights of the membership vs the board may be different. In the final analysis, I believe what Roger has said is correct: who has the final authority will be determined by the wording in the bylaws (or CCRs). I would say, read them carefully to make sure they say what you think they say.<<< I agree. Membership elects Boards to act on their behalf, and their veto power consists (unless otherwise stated in ByLaws) of the option of replacing/recalling the Board. Take budgets and spending. If the Board decides to spend $1K to install a happy-face widget atop the subdivision sign, should Membership be allowed by vote, motion or otherwise nullify this decision? Absolutely not. That is not their job; that's the Board's. If Membership doesn't like the name of the landscaping company, should they be allowed to block an upcoming contract extension? Absolutely not. That's a recipe for chaos. If Membership gets ticked off enough, they can recall the Board and put in a new one more atuned to their predilictions. Should Membership be allowed to voice their opinons to the Board? Absolutely. The more the better. But in the end, the Board has the responsiblity to follow the powers granted in the docs, even if unpopular.

RobertR1
(South Carolina)

Posts:2074

07/27/2008 9:17 AM
Bruce, A little scenario music if you please. How do you evaluate the clause in the CC&R's regarding dissolving or liquidating the entire assessts of the associations. Ours seem to say noting can be done until 100% of the membership is in agreement and votes to vilodate the Boards Recomendations. Does this mean final authority rests with the membership? Did you reply to my BBQ question? I am gaithering opinions.

JohnM3
(Florida)

Posts:208

07/27/2008 9:44 AM
Sorry roger I did not have the time to get back to you on your statements. 1. It is not the perogative of the members to make motions at meetings in Florida unless the specific item in discussion is on the pre-printed agenda. There is now in place a Florida statue that states if a petition is signed by x percentage of the members than that item must be placed on the agenda and discussed motions made and so forth. I understand that In your state the law may be different. But in Florida it is not the normal way that meetings are held. Example our monthly meetings have a set agenda of roll call - motion on minutes- Treas report- Management report- projects report - new business - old business - home owners concerns-- But due to a recent change of Florida Law we now allow all members to speak on any issue on the agenda as we discuss the issues. First the BOD speaks back and forth, then PM voices his opinion on the matter than the people present speak on the matter under discussion only. Then we go on to the next issue. If they the memebers wish to speak on a item of interest not on the agenda they must wait and speak under the agenda item Home Owners Concerns.................Thats the way we do it. But if a member wants to present a petition about something totally different then it comes in under Home Owners Concerns only. Then we discuss the special item brought to our attention and inform the members what we are all ready doing on that issue. If the member does not like what we are doing we are more than happy to put it on next months agenda. That way we comply with Fl Statues..............and the members of the entire HOA instead of a few people but the entire community. We post every meetings minutes on the community web site for all to read....It stays there for 1 full year..............

BruceF1
(Connecticut)

Posts:529

07/27/2008 10:11 AM
Posted By RobertR1 on 07/27/2008 9:17 AM Bruce, A little scenario music if you please. How do you evaluate the clause in the CC&R's regarding dissolving or liquidating the entire assessts of the associations. Ours seem to say noting can be done until 100% of the membership is in agreement and votes to vilodate the Boards Recomendations. Does this mean final authority rests with the membership? Did you reply to my BBQ question? I am gaithering opinions. "Does this mean final authority rests with the membership?" It seems to me the statement is very specific as to the action being taken and who has the authority to do it. Thus, to dissolve the association and liquidate the assets requires a unanimous vote of the homeowners. I see no other way to do it. An interesting observation here is what if the CCRs can be amended by fewer homeowners, let's say 75%? Can 75% of the homeowners amend the CCRs to change the dissolution requirement to a number less than 100%? The answer is no. Parliamentary procedure holds that to change a requirement in the bylaws, or whatever, requires a vote of 1) as many members as is necessary to amend the document, or 2) as many members as required to perform the action being amended, whichever is greater. Thus, to change any such clause to a lower requirement would require approval of 100% of the membership. The clause you quoted says nothing about conferring final authority upon the membership for anything else. I haven't formed an opinion yet about your BBQ question. Thank you for asking for my opinion. I have to go out, but I will try to look at it again later.

GeraldT4

Posts:932

07/29/2008 6:58 AM
AlbertC - The BOD is supposed to act on behalf of and in the best interests of the association members. Absent of constant input from the membership, the BOD can only do their best to try to satisfy the most possible. The membership has the ability to change the actions taken by the BOD through due process, special mtg. by petition for recall, etc. However, your governing documents may limit the membership's ability by a provision that will not let more than 1 vote per year on any matter previously decided upon by the membership. Motions from the floor by the membership? This has me curious. Please provide some detail, who is making these motions, are they from the floor, how many association members are there in total, and what percentage of the association is trying to make the BOD adhere to the motions, are the topics being motioned upon detailed on an agenda that is made available in advance of the meeting for the association members to review so they have the opportunity to provide their input as well?

SusanW1
(Michigan)

Posts:2117

07/29/2008 11:08 AM
Gerald - The Annual Meeting is the MEMBER's Meeting - not a Board meeting. Motions can be made and passed (like approving the minutes of the meeting, for example) within the guidelines of the bylaws (for example, not motions that would have required a Notice) It would be the job of the president to contol the meeting a declare any motion out of order or non-applicable or illegal or conflicting. See my post above on the motions.

GeraldT4

Posts:932

07/29/2008 11:44 AM
SusanW1 - Rather than negate my inquiry, let's hear from AlbertC on what meetings these motions are occurring, and answer each question. Perhaps you didn't catch what Albert wrote, "One motion was to have the four Membership meetings at night to accommodate more members to attend because many are still working." Given your reply to me there would then be 4 Annual (Membership) meetings. Unlikely.

RobertR1
(South Carolina)

Posts:2074

07/29/2008 2:32 PM
GeraldT, Sometimes it seems from Albert's posts, Albert is not sure what he wants to say. I think if you had four annual meeting you would have to have four different associations. I may be wrong, but, annual means once a year.

KirkW1
(Texas)

Posts:1110

07/29/2008 11:04 PM
It would seem to me that there is a BOD which is entrenching itself. I say ",b>Throw the bums out!." I am bothered that the association attorney was even present at the meeting. I would probably look to recall the president and an additional number to make a majority change in the board. Not sure how I would choose the other unlucky souls. Perhaps put them all up for recall and then speak in support of a couple who might be worth saving. What is the name of your HOA? I will keep an eye out in the news for you. You have described the lead up to one of the stories that give HOAs a bad name.

AlbertC
(New Jersey)

Posts:10

07/29/2008 11:57 PM
I appreciate all your input but you have to read a little more clearly. I did not say four annual meetings. We have four quarterly MEMBERSHIP meetings with one being the Annual meeting and twelve BOARD OF DIRECTORS meetings. The membership meetings with a legal quorum is what I am referring to as having the authority to overturn decisions by the BOD. All the motions that were presented were non-governing motions and did not have to be put on the meeting agenda. i.e. RRNR on deliberative bodies and i.e Non-Profit Corp. Law Membership Organizations. In the case of membership organizations, ultimate authority rests with the “membership” of the organization. How the membership exercises this authority can vary significantly. For organizations with large numbers of members, for example, representative assemblies of members may exercise authority. In such cases, bylaws would have to spell out how the representatives are to be selected, what the attendance must be in order to constitute a “quorum” able to act on behalf of the organization, and whether a simple majority or some type of super majority is required to act on particular types of resolutions (e.g., a requirement for a three-fifths majority to change the organization’s bylaws). Alternatively, meetings of the entire membership may be required in order for the organization to take action. In such cases as well, bylaws must specify what proportion of the membership must be in attendance to make the meeting official and what the voting procedures are. Because of the cumbersomeness of convening members, even membership organizations often specify a smaller body that is empowered to act on behalf of the members between membership meetings. Such governing boards, or boards of directors, can either be elected or appointed, but they exercise their authority at the pleasure of the membership, and the members often retain for themselves the power over the most important decisions affecting the organization, such as the election of directors and officers and the approval or amendment of the basic organizing documents, or budgets.

GeraldT4

Posts:932

07/30/2008 5:02 AM
AlbertC - It was Susan that wrote the Annual Meeting is the MEMBER's Meeting - not a Board meeting. Since you wrote you have four quarterly membership meetings a year, it didn't make sense how they could all be annual meetings. Please provide detail on what "non-governing" decisions are so critical that the membership has to overturn them. Sounds like a very hostile environment Albert.

SusanW1
(Michigan)

Posts:2117

07/30/2008 5:56 AM
Sounds like there are 4 Membership meetings (of the resident Members, not Board led) ONE Annual Meeting, and 12 Board meetings. The members (that are meeting) are empowered to set the time of their own meetings - so the Members can set their time, and the Board members can set their time for Board meetings. No biggie, there.

GeraldT4

Posts:932

07/30/2008 6:29 AM
SusanW1 - One of the 4 Membership meetings is the annual meeting. Honestly it sounds like a mess if you ask me.

DonN
(Michigan)

Posts:237

07/30/2008 7:16 AM
This is an interesting post. I read the attachment to AlbertC's initial post and am in general agreement with his research and the reasons stated. I add several thoughts. Membership nonprofits are sometimes called mutual-benefit organizations which may be more descriptive. That term is also used in the laws in some states. Directorship nonprofits are sometimes called public-benefit organizations. Because there are no members to provide oversight, the attorney general often has the oversight obligation. In my reading of the Michigan Nonprofit Corporation Act and the Model Act published by the American Bar Association, the powers granted to the board are not exclusive. Further, there are no restrictions on the subject matter for members to call a special members' meeting. Accordingly, the members have the authority to overrule any action of the board. Unless the bylaws of your association grant exclusive powers to the board of directors, the members can overrule the board by calling a special members' meeting and approving the motion to rescind as defined in the bylaws. This is as it should be. All powers to the board are derived with the consent of the members (governed). I suggest a careful reading of the nonprofit act in your state and the bylaws for your organization. Some of the powers of the association and the board may be defined in the CC&Rs. Members surrender the ultimate authority only if the board's powers are exclusive, or if the law and/or bylaws limit the authority of the members.

Don Nordeen Governance of Property Owners Associations

JohnM3
(Florida)

Posts:208

07/30/2008 7:45 AM
Whoa folks calm down. You all must understand something first before you post. Each and every state in the nation has seperate laws. In some states such as mine Florida. Many of the State Laws supercede the CCRs and by laws and operating procedures. You must be from his / her state to be able to hold a conversation on alberts particular issues. Folks everyone needs to understand that huge fact. Hence what happens in Albert's ccrs and state law may very well not apply in your state at all. Have a nice day everyone.....................

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