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Subject: In VA, can HOA Members make changes without the Board of Trustees
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BH5
(Virginia)

Posts:49


09/03/2020 7:32 AM  
Background: Our HOA members want to make bylaw changes and/or adopt resolution but the majority of the Board will not put the matter out for community vote or even for discussion.

Question: In VA, can members change bylaws or adopt resolutions without the board approval if they have the required number of members (2/3 for bylaw changes) approving the change? It is not clear how many member votes are necessary to get a resolution approved since these have always been done by Board votes alone.

Since the board majority does not want to put the matter forward for a vote (or even a discussion), the members would have to conduct this vote independent of the Board, and if passed, require the Board to follow the changes.
GeorgeS21
(Florida)

Posts:3105


09/03/2020 8:05 AM  
Not familiar with Virginia statute, however, the first question is: What do your Bylaws say about who approves amendments, and what the voting requirements are?

My last four neighborhoods allowed the Board to modify Bylaws with a majority Board vote - this is pretty common.

If there is such an interest in the community to change the Bylaws - and, the Board is aware of this support and, does not address it, the most common remedy would be conduct a recall of the directors - either individually, or all together.
BH5
(Virginia)

Posts:49


09/03/2020 8:41 AM  
Thank you. The original group came forward with removal as a "threat," but another group thought that if the membership could vote for the changes without trying to remove the one or two people controlling the board, that could get the changes done in a quicker and less fractious manner. So the purpose of my question is to explore if the members can accomplish the change without removing board members. I'm trying to mediate these two groups.
AugustinD


Posts:3889


09/03/2020 8:45 AM  
From other posts by BH5, I see that this is a non-condominium HOA.

BH5, from a quick review of Virginia's HOA statute and nonprofit corporation statutes, I think the way to proceed is likely as follows:

1.
Petition for a Special Meeting of the Membership, with the agenda for the meeting being a vote on the amendment to the Bylaws. Most likely the HOA is then obliged to send out the notice for this meeting. If you quote what your Bylaws say about Special Meetings of the membership, and the Amendment process, I (and maybe others) can help more.

2.
Gather proxies.

3.
Have the Special Meeting. The President presides and had better not kvetch about his/her duty to hold the vote.

4.
Vote.

I would also review the pertinent sections of:
https://law.lis.virginia.gov/vacodepopularnames/property-owners-association-act/
https://law.lis.virginia.gov/vacodepopularnames/virginia-nonstock-corporation-act/

I advise getting an attorney to advise you. If you all do not have the money, wing it, but if the vote fails on a technicality, get the attorney, or replace the board with people who feel as you do.

What is it that you all want to change in the Bylaws?
GeorgeS21
(Florida)

Posts:3105


09/03/2020 9:52 AM  
Augustin,

If the Bylaws state the Board may amend, but makes no statement wrt the membership amending, how does it work - can the membership even do this?
BH5
(Virginia)

Posts:49


09/03/2020 10:06 AM  
Bylaw changes require a 2/3 vote by members. I have always assumed that means 2/3 voting in the affirmative for the change. Someone else thinks it means 2/3 casting a vote with plurality of the 2/3s deciding the outcome. Again. this is just one reason we are trying to change the bylaws from 40 years ago. Nobody knows what to do. It is too vague. We have never changed bylaws. However, a few resolutions have been enacted and that is done by the board without any vote from the members.


AugustinD


Posts:3889


09/03/2020 10:19 AM  
Posted By GeorgeS21 on 09/03/2020 9:52 AM
If the Bylaws state the Board may amend, but makes no statement wrt the membership amending, how does it work - can the membership even do this?
First, when it comes to amending a Virginia HOA's Bylaws, for the most part (and per your question) Virginia statutes mostly defer to a HOA's/corporation's Bylaws on how to amend. Second, I would like to see the specific language in the Bylaw in question, re amending. If the Bylaw says something like, "The Board may amend the Bylaws from time to time as is deemed necessary to the proper functioning of the Association," and is silent about the membership amending the Bylaws, then in my opinion, no way no how can the membership amend the Bylaws. Of course, if the membership feels strongly about a certain proposed amendment, the membership can always elect directors who want the amendment, and said directors can amend the Bylaws thusly.

Perhaps your question is a little related to your thread started today or yesterday about amending/restating your Florida FS 720 HOA's Bylaws? I am keeping in mind that your Florida HOA's Bylaws are clear that the Board by itself can amend. (I think this is not the rule nationwide. I also think that the Bylaws permitting the Board to amend the Bylaw is a not uncommon exception to the rule. I think we have seen this not uncommon exception more than once at this forum. The exception is not entirely surprising, since Bylaws do not go to substantive property rights like whether a person can own chickens; erect walls on lot boundaries; rent out one's home; and the like.)

Back to BH5 --
Keep in mind that your HOA's Declaration may have a requirement to contact, and obtain the consent of, all mortgagees about an amendment to the Bylaws. See the Virginia HOA statute, § 55.1-1829. ("Amendment to declaration and bylaws; consent of mortgagee.
A. In the event that any provision in the declaration requires the written consent of a mortgagee in order to amend the bylaws or the declaration,... ")
AugustinD


Posts:3889


09/03/2020 10:28 AM  
Posted By BH5 on 09/03/2020 10:06 AM
Bylaw changes require a 2/3 vote by members.
If you quote the bylaw in question verbatim, I am sure people here will be happy to give you their opinion. The veterans here are highly experienced on such interpretations. Granted said interpretation can be one of three things. Either: BH5 is correct in his interpretation; BH5 is not correct in his/her interpretation; or the language is ambiguous, in which case...

Posted By BH5 on 09/03/2020 10:06 AM
We have never changed bylaws. However, a few resolutions have been enacted and that is done by the board without any vote from the members.
Are Resolutions specifically referenced in the Bylaws or Declaration? If not, "resolutions" are legally dumb and in my opinion, often result in an unlawful de facto amendment of the Bylaws or Declaration. Boards are often authorized to make "rules and regulations" that implement the Declaration's covenants or Bylaws, but said R&Rs had better not go outside the purview of the covenants or Bylaws.

The typical director thinks his/her job is to make decisions according to her or his own best judgment. The typical director thinks the board can make up rules, because the board is in charge. Nonsense. 'Best judgment' is only a part of a director's job. The director's job is to make decisions completely, 100% consistent with the governing documents and all law (municipal, state, federal, case law) and in her or his best judgment. Doing anything else is unlawful, per corporate law.
AugustinD


Posts:3889


09/03/2020 10:39 AM  
BH5, you also need to quote here what your HOA's Articles of Incorporation say about amending the Bylaws. Why? Because Virginia's Nonprofit Corporation statute says the following:

=====Start Excerpt from Statute=======
13.1-892. Amendment of bylaws by board of directors or members.
A corporation's board of directors may amend or repeal the corporation's bylaws except to the extent that:

1. The articles of incorporation or § 13.1-893 reserves that power exclusively to the members; or
2. The members in repealing, adopting, or amending a bylaw expressly provide that the board of directors may not amend, repeal, or reinstate that bylaw.
=======End Excerpt=======

(13.1-893. is titled "Bylaw provisions increasing quorum or voting requirements for directors.")

If your HOA's Articles of Incorporation do not give exclusive power to amend the Bylaws to the HOA membership, then the HOA membership is out of luck.
GeorgeS21
(Florida)

Posts:3105


09/03/2020 11:24 AM  
Perhaps BH5 means CCRs for 2/3 vote?
BH5
(Virginia)

Posts:49


09/03/2020 11:57 AM  
I hope some of you see more guidance in these than we do.


"The affairs of this association shall be managed by a Board of Trustees"

""Founding Documents"....may be duly amended from time to time"

For the Declaration of Covenants: it is very clear that "Authority to Transfer" and "Authority to Mortgage" property requires 2/3 vote of members. Meetings at which members are to vote must be "duly called."

For the Article of Incorporation: "These Articles may be amended at a duly held meeting at which a quorum is present upon a vote of two-thirds (2/3) of the votes, in person or by proxy, entitled to be cast by the entire membership.

Resolutions are mentioned several times and defined as: "Book of Resolutions" shall mean and refer to the document containing the rules, regulations, and policies of the association as they may from time to time be amended." No mention on who may draw up these resolutions or vote on them.

In the Bylaws:

"Special meetings of the members may be called at any time by the President, or by the board of the Trustees, or upon written request of the Owners who are entitled to vote one-fourth of the votes of the membership."

"These Bylaws may be amended, at a regular or special meeting of the members, by a vote of the majority of a quorum of members present in person or by proxy." The percentage of members to constitute quorum is not mentioned. Elsewhere in the Bylaws, quorum is 25% for voting on Trustees or raising the annual assessment above X% or for a special assessment.
AugustinD


Posts:3889


09/03/2020 12:27 PM  
BH5,

-- Can you confirm that your HOA is subject to the Virginia Nonstock Corporation statute? Most Virginia HOAs are.

-- Are the Articles of Incorporation silent about who can amend the Bylaws?

-- If your Articles of Incorporation are silent about who can amend the Bylaws, and your HOA is subject to the Virginia Nonstock Corporation statute, then the situation is this: Your Bylaws, in the section on amending, conflict somewhat (but not entirely) with the Virginia Nonstock Corporation statute's section on amending. When a conflict arises between state law and a HOA's governing documents, normally the state law prevails. In this case, the statute says the Board may amend the Bylaws. The Bylaws though still permit the membership to amend the Bylaws by "a vote of the majority of a quorum of members present in person or by proxy." I will address what the statutes say about quorum in a subsequent post. For now, like the Bylaws say: Yes, your group can have a vote to amend the Bylaws via the annual meeting of members or by calling a Special Meeting of members. The problem is that, by my reading, and if the vote successfully amends the Bylaws, the statute allows the Board to just turn around and throw out the amendment (with some caveats that depend on what the amendment concerns, per section 13.1-893).

In my experience, most people could not absorb all this without a lot of study. Perhaps consider it preparation for meeting with an attorney.
AugustinD


Posts:3889


09/03/2020 12:34 PM  
Posted By BH5 on 09/03/2020 11:57 AM
"These Bylaws may be amended, at a regular or special meeting of the members, by a vote of the majority of a quorum of members present in person or by proxy." The percentage of members to constitute quorum is not mentioned. Elsewhere in the Bylaws, quorum is 25% for voting on Trustees or raising the annual assessment above X% or for a special assessment.
Per the Nonstock Corporation statute, where the Bylaws are silent on what a quorum is, "the members holding one-tenth of the votes entitled to be cast represented in person or by proxy shall constitute a quorum." See below.

From the Nonstock Corporation Act:
"§ 13.1-849. Quorum and voting requirements for voting groups.
A. The bylaws may provide the number or percentage of members entitled to vote represented in person or by proxy, or the number or percentage of votes represented in person or by proxy, which shall constitute a quorum at a meeting of members. In the absence of any such provision, members holding one-tenth of the votes entitled to be cast represented in person or by proxy shall constitute a quorum. The vote of a majority of the votes entitled to be cast by the members present or represented by proxy at a meeting at which a quorum is present shall be necessary for the adoption of any matter voted upon by the members, unless a greater proportion is required by this Act or the articles of incorporation. Members entitled to vote as a separate voting group may take action on a matter at a meeting only if a quorum of those members exists with respect to that matter.

... "
AugustinD


Posts:3889


09/03/2020 12:41 PM  
Here is one route the membership could take to amend the Bylaws and make the amendment stick:

-- Call a Special Meeting of the Membership to amend the Articles of Incorporation. Comply with the quorum and other requirements for amending that are given in the Articles of Incorpotation.

-- The agenda of the Special Meeting should be "to amend the Articles of Incorporation so that the Articles reserve the right to amend the Bylaws exclusively to the membership via a majority vote, in person or by proxy, of a quorum of _____."

-- Get enough people to support the amendment of the Articles of Inc . Properly record the amended Articles with the County or state as needed.

-- Call a second Special Meeting for the membership to amend the Bylaws.

-- Get enough people to support the amendment of the Bylaws. Properly record with the county the amended Bylaws as needed.


If your head is not exploding at this point, I would be impressed.
SheliaH
(Indiana)

Posts:3456


09/03/2020 12:47 PM  
Boards can be replaced if you don't like what they're doing, so if they're the hangup, it's best to either vote them out in the next board election or hold a recall vote. Your documents should have instructions on that or at least say how homeowners can call a special meeting.

Yes, I know it may be a bit challenging to find that information because the documents are so convoluted to read. Probably because they're usually written by attorneys to favor the developer. Sit down and get comfy.

Of course, you can rally your neighbors together, attend the next board meeting and tell them in no uncertain terms what you want and expect - and what could happen if they don't. If you find you do need to get rid of the board, you'll need to have other homeowners willing to take over, and as I always say, YOU may need to step up into a slot.

From there, you could work with your association attorney on drafting changes and having homeowners vote to approve them or not. In my association, the way this works is that 75% of the homeowners have to approve amendments - we have 156 units, so 117 have to approve it. Depending on the size of your community, this can take a while to get everyone to weigh in, so get ready to work and make your case for approving the changes.

As long as you want to amend the documents, this may be a good time to ask the attorney how you can have the documents written in plain English so they're easier to understand. It's best to have him or her (or a paralegal) assist you, because misinterpreting a few words here or there can torpedo the entire project. Good luck!

, so - it seems all of them are written like that, but then again, they're originally written to favor the developer.
BH5
(Virginia)

Posts:49


09/03/2020 1:10 PM  
Thank you AugustinD

-- Can you confirm that your HOA is subject to the Virginia Nonstock Corporation statute? Most Virginia HOAs are.

Yes, Virginia Nonstock Corporation

-- Are the Articles of Incorporation silent about who can amend the Bylaws?

Not exactly: "members shall vote to approve amendments to these Articles and the Bylaws and to elect Trusteed" which is the same as stated elsewhere in each of these sections.


-- If your Articles of Incorporation are silent

So you are saying we follow the order of progression up through the laws/regulations? I think the "Property Owners Act" is the next level before the Nonstock. Is that correct?






BH5
(Virginia)

Posts:49


09/03/2020 1:23 PM  
AugustinD,

I get this. They'd have to do it without help from our management company who takes direction only from the Board. If the Board chooses not to participate, does this group of members still have standing?

My head is exploding, and I know this is something that would take a lot effort and resolve by this group.

Thanks
BH5
(Virginia)

Posts:49


09/03/2020 1:25 PM  
SheliaH

We'd have to wait 2 or 3 years. But yes, elections matter.
AugustinD


Posts:3889


09/03/2020 1:33 PM  
Posted By BH5 on 09/03/2020 1:10 PM

-- Are the Articles of Incorporation silent about who can amend the Bylaws? Not exactly: "members shall vote to approve amendments to these Articles and the Bylaws and to elect Trustees" which is the same as stated elsewhere in each of these sections.
My opinion is that this means the Articles of Inc reserve this right exclusively to the membership. The latter is good news. Go ahead and seek a Special Meeting and have the vote. This of course will take some labor.



Posted By BH5 on 09/03/2020 1:10 PM
So you are saying we follow the order of progression up through the laws/regulations? I think the "Property Owners Act" is the next level before the Nonstock. Is that correct?
Excellent question. Based on several years of doing this, here is the hierarchy of laws:

Federal law (statutes and case law)
State law (statutes and case law)
-- HOA/Condo specific statute
-- Nonprofit corporation statute
Municipal Law
Declaration
Articles of Incorporation
Bylaws
Rules and Regs made by the Board

If there is a conflict between a state's HOA statute and a state's nonprofit corporation statute, the HOA statute prevails. But for the topics discussed in this thread, I do not see any conflicts.

You sound intelligent, still, I want to make clear that often state statutes will have wording like, "Unless the Bylaws say ___, the following applies... " The state statute still controls, but in instances like the latter, the state statute is saying it is deferring to the Bylaws on the point being covered. E.g. from the Nonstock Corporation Act: "E. Unless the bylaws require otherwise, if an annual or special meeting is adjourned to a different date, time, or place, notice need not be given if the new date, time, or place, if any, is announced at the meeting before adjournment." This means the statute is deferring to the Bylaws to a certain extent.

AugustinD


Posts:3889


09/03/2020 1:44 PM  
Posted By BH5 on 09/03/2020 1:23 PM
[The group that wants to amend the Bylaws would] have to do it without help from our management company who takes direction only from the Board. If the Board chooses not to participate, does this group of members still have standing?
Once your group meets the requirements for asking for a Special Meeting, the Nonstock Corporation statute requires the corporation (association, board, yada) to participate. This means management, the board et cetera must support the holding of the Special Meeting in concrete ways. Furthermore this statute has a specific provision about a court ordering the board to cooperate in holding the Special Meeting (if the board is not cooperating). Below are just some of the relevant sections. Do consider doing a keyphrase search for "special meeting" of the nonstock corporation statute at https://law.lis.virginia.gov/vacodepopularnames/virginia-nonstock-corporation-act/

§ 13.1-839. Special meeting.
A. A corporation shall hold a special meeting of members:

1. On call of the chairman of the board of directors, the president, the board of directors, or the person or persons authorized to do so by the articles of incorporation or bylaws; or

2. In the absence of a provision in the articles of incorporation or bylaws stating who may call a special meeting of members, a special meeting of members may be called by members having one-twentieth of the votes entitled to be cast at such meeting.

B. Unless otherwise provided in the articles of incorporation, a written demand for a special meeting may be revoked by a writing, including an electronic transmission, to that effect received by the corporation prior to the receipt by the corporation of demands sufficient in number to require the holding of a special meeting.

C. If not otherwise fixed under § 13.1-840 or 13.1-844, the record date for determining members entitled to demand a special meeting is the date the first member signs the demand.

D. Except as otherwise determined by the board of directors acting pursuant to subsection C of § 13.1-844.2, members' meetings may be held at such place in or out of the Commonwealth as may be provided in the bylaws or, where not inconsistent with the bylaws, in the notice of the meeting.

E. Only business within the purpose or purposes described in the meeting notice required by subsection C of § 13.1-842 may be conducted at a special members' meeting.

Code 1950, § 13.1-213; 1956, c. 428; 1975, c. 500; 1985, c. 522; 2007, c. 925; 2012, c. 706; 2018, c. 265.

§ 13.1-840. Court-ordered meeting.
A. The circuit court of the city or county where a corporation's principal office is located, or, if none in the Commonwealth, where its registered office is located, may, after notice to the corporation, order a meeting of members to be held:

1. On petition of any member of the corporation entitled to participate in an annual meeting if an annual meeting was not held within 15 months after its last annual meeting or, if there has been no annual meeting, the date of its incorporation; or

2. On petition of a member who signed a demand for a special meeting that satisfies the requirements of § 13.1-839 if:

a. Notice of the special meeting was not given within 30 days after the date the demand was delivered to the corporation's secretary; or

b. The special meeting was not held in accordance with the notice.

B. The court may fix the time and place of the meeting, determine the members entitled to participate in the meeting, specify a record date for determining members entitled to notice of and to vote at the meeting, prescribe the form and content of the meeting notice, and enter other orders necessary to accomplish the purpose or purposes of the meeting.

§ 13.1-842. Notice of meeting.
A. 1. A corporation shall notify members of the date, time, and place, if any, of each annual and special members' meeting. Such notice shall be given no less than 10 nor more than 60 days before...
BH5
(Virginia)

Posts:49


09/03/2020 1:48 PM  
AugustinD

Re: "Unless the Bylaws say ___, the following applies... " The state statute still controls, but in instances like the latter, the state statute is saying it is deferring to the Bylaws on the point being covered. E.g. from the Nonstock Corporation Act: "E. Unless the bylaws require otherwise, if an annual or special meeting is adjourned to a different date, time, or place, notice need not be given if the new date, time, or place, if any, is announced at the meeting before adjournment." This means the statute is deferring to the Bylaws to a certain extent."

You are 100% correct. VA has a lot of this "deferring" language. Everything is put on the shoulders of unpaid volunteers trying to run these multimillion dollar corporations to try and figure out on their own. It is actually a full-time job. I'll give you one guess who is making the money and keeping the laws from being clear and definitive ;) While CA Davis Sterling seems a bit too much, I wish VA would put some clear cut dos and don'ts into law for all the struggling HOA boards and members.

Thanks. Going forward with this information from you and the others to try and help this group.
AugustinD


Posts:3889


09/03/2020 2:06 PM  
Posted By BH5 on 09/03/2020 1:48 PM
You are 100% correct. VA has a lot of this "deferring" language.
I think all states' nonprofit corp statutes and HOA/condo statutes do.

Posted By BH5 on 09/03/2020 1:48 PM

Everything is put on the shoulders of unpaid volunteers trying to run these multimillion dollar corporations to try and figure out on their own. It is actually a full-time job.

Posted By BH5 on 09/03/2020 1:48 PM
I'll give you one guess who is making the money and keeping the laws from being clear and definitive ;)
The developers are making the money and also, since they save cities a lot of money, mostly have city staff and often city councils on their side?

I think the laws are pretty clear and definitive in many states (not all), Virginia among them. But like you indicate, put these laws in the hands of volunteer amateurs, and it's often (most of the time) a disaster.

Posted By BH5 on 09/03/2020 1:48 PM

While CA Davis Sterling seems a bit too much, I wish VA would put some clear cut dos and don'ts into law for all the struggling HOA boards and members.
I think I like California's Davis-Stirling statutes the best. What are the big condo/hoa states? Florida, New York, Texas, Michigan? New York's system is a nightmare. Texas is a little better. Florida is pretty good but I am not sure if, practically speaking, enforcement per the law works. Michigan is appalling.

You're welcome. Good luck
JohnC46
(South Carolina)

Posts:9870


09/03/2020 3:44 PM  
Recalls are rarely successful for any number of reasons, especially when the BOD fights it as it easy to legally tie it up/delay it. The best way to change "direction" is to elect like thinkers to the BOD. It is hard work. It just does not happen because one wants it to happen. In one HOA it took us 18 months (two election cycles) to change the BOD. We (15 or so of us) held strategy meeting. Got legal advice. Collected Proxies. Set up informational meetings at people's homes. Set up tables with information at the pool, main entrance, street corners, etc. Went door to door.

First year we got two of 7 of the BOD. Enough to assure the President did not get re-elected by the BOD but we still lost most votes 4 to 3. Second election we got 2 more on the BOD. Then most votes when 4 to 3 or 5 to 2 our way. Old Pres and his main allie both resigned and we appointed new people.

It was hard work, but we did it.
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