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Subject: Using COVID-19 to indefinitely postpone the Annual Meeting
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AlbertE
(Maryland)

Posts:11


10/23/2020 5:12 PM  
Our community's annual meeting is always in September however homeowners were sent a letter in October stating that the annual meeting and election were indefinitely postponed due to Covid-19 and all 7 board members would be staying aboard. All 7 are elected at the same time for a 1 year term. We have about 400 homes and never had 50 people at any meeting and almost never have 10% quorum. The County posted a waiver for in person meetings which I included below.

So two virtual meetings are scheduled for October and November but somehow the annual meeting cannot be held. Two Special Meetings this summer were attempted without quorum to change the bylaws to only 5 board members and to have staggered terms of 3 years among other things.

My question is how can homeowners request an annual meeting. Covid-19 won't end anytime soon. I suspect the motivation is to stall the election until they can get a 60% vote on the new bylaws to enact the three year staggered terms.

The vote to postpone the annual election was closed. Doesn't such an order have to take place at an open meeting with it documented in the meeting minutes? Should another date be set instead of it being indefinite? The letter was not signed by any board member. Shareholders have certain rights in a corporation for virtual meetings (occ.gov). Do those guidelines apply to HOAs?

Thanks for any help.


NOTICE OF POSTPONEMENT OF 2020 ANNUAL MEETING

Due to the Covid-19 Pandemic the Board of Directors in compliance with County Executive Order has postponed the November 2020 Annual Meeting until further notice. Typically Annual Meetings are held in person in accordance with the MD HOA Act.

Since in person meetings in accordance with the County Executive Order No.15-2020 dated June 25, 2020 limits gathers [sic] to a maximum of 50 persons, the Board made the decision to postpone the 2020 Annual Meeting. In addition the Club House remains closed due to COVID-19.

In accordance with the MD HOA Act the current Directors will remain on the Board until an Annual Meeting can be held.

An Annual Meeting date will be determined once the in person restrictions are lifted.

We hope that our Community stays safe during these unprecedented times.



Notice to all Common Ownership Communities:
As you know, each common ownership community association has its own
unique governing documents, written specifically for that association. Within
these governing documents, it is mandated that all board meetings are hosted inperson. Out of an abundance of caution regarding the spread of the novel
coronavirus, COVID-19, Prince George’s County Commission on Common
Ownership Communities (CCOC) is providing a temporary waiver allowing and
recommending all associations to consider the use of telephone and/or video
conferencing to conduct upcoming board meetings, which still provides
members the opportunity to participate. Your association is also permitted to
utilize other forms of electronic media and communication as long as it is
accessible to all members of the association. If electronic meetings are not viable
for your association, we are approving cancellation of the meeting as long as
notice is provided to all homeowners of the meeting cancellation. Associations
shall periodically check the CCOC website to get updates on the temporary
waiver.


AugustinD


Posts:4828


10/23/2020 5:32 PM  
Posted By AlbertE on 10/23/2020 5:12 PM

Notice to all Common Ownership Communities:
As you know, each common ownership community association has its own
unique governing documents, written specifically for that association. Within
these governing documents, it is mandated that all board meetings are hosted inperson. Out of an abundance of caution regarding the spread of the novel
coronavirus, COVID-19, Prince George’s County Commission on Common
Ownership Communities (CCOC) is providing a temporary waiver allowing and
recommending all associations to consider the use of telephone and/or video
conferencing to conduct upcoming board meetings, which still provides
members the opportunity to participate. Your association is also permitted to
utilize other forms of electronic media and communication as long as it is
accessible to all members of the association. If electronic meetings are not viable
for your association, we are approving cancellation of the meeting as long as
notice is provided to all homeowners of the meeting cancellation. Associations
shall periodically check the CCOC website to get updates on the temporary
waiver.
Write a letter to the board as follows:

Dear Board of Directors,

The Prince George’s County Commission on Common Ownership Communities (CCOC) is providing a temporary waiver allowing and recommending all associations to consider the use of telephone and/or video conferencing to conduct upcoming board meetings, which still provides members the opportunity to participate.

Would you please hold the annual meeting via telephone or video conferencing? If you can do this, then by November 10, 2020, please let me know the date you plan to hold the annual meeting.

If you are unable to hold the annual meeting via telephone or video conferencing, then please let me know the reasons why by November 10, 2020.

Thank you,

name
address
phone
email addie

Send the letter certified mail, return receipt requested.

Post back here with the Board's response (or more likely, non-response).

AugustinD


Posts:4828


10/23/2020 5:33 PM  
Also, is this a condo or a non-condo? Do you know what Maryland statutes apply to your community?
AlbertE
(Maryland)

Posts:11


10/24/2020 5:42 AM  
Posted By AugustinD on 10/23/2020 5:33 PM
Also, is this a condo or a non-condo? Do you know what Maryland statutes apply to your community?



This is a non-condo. Maryland Code REAL PROPERTY Title 11B - MARYLAND HOMEOWNERS ASSOCIATION ACT applies. Also the Maryland Corporate Code applies.
AlbertE
(Maryland)

Posts:11


10/24/2020 5:43 AM  
Send the letter certified mail, return receipt requested.

Post back here with the Board's response (or more likely, non-response).





Thanks for this letter. I will send it off this morning. Hopefully I will get a response.
ChrisE8
(New York)

Posts:366


10/24/2020 1:47 PM  
The bylaws should specify the procedure for how owners can call an annual meeting. Usually it takes getting a certain % of owners to sign a request.

At least NY recently changed the law to allow HOAs to have meetings by videoconference or phone. Some other states may have done the same thing.

So there's no excuse for not having an annual meeting, in my view.

Even if a HOA's governing documents and state law don't allow annual meetings to be online or by phone, a board should still call an informal Zoom meeting or still conduct an election by proxy. With the technology available today, there's really no excuse.
GenoS
(Florida)

Posts:4242


10/24/2020 4:44 PM  
"All homeowners have the right to attend open meetings of the Board and the members."

30 people do not have computers or smartphones. How are those people supposed to "attend" the meeting?

In some communities, like mine, technology IS the excuse. Because so many homeowners don't have it.
LaskaS
(Texas)

Posts:420


10/24/2020 5:36 PM  
Same thing happened in our condominiums.. augustine's advice is spot on.

AugustinD


Posts:4828


10/24/2020 5:56 PM  
Posted By GenoS on 10/24/2020 4:44 PM
30 people do not have computers or smartphones. How are those people supposed to "attend" the meeting?
Phone in with a conventional phone.

I agree with ChrisE8 about the importance of having annual meetings and annual elections. I think Boards who refuse to do so during this pandemic are lying when they say the technology is too hard. They are power-mongers and law-breakers.
GenoS
(Florida)

Posts:4242


10/24/2020 8:17 PM  
Posted By AugustinD on 10/24/2020 5:56 PM
Posted By GenoS on 10/24/2020 4:44 PM
30 people do not have computers or smartphones. How are those people supposed to "attend" the meeting?
Phone in with a conventional phone.

I agree with ChrisE8 about the importance of having annual meetings and annual elections. I think Boards who refuse to do so during this pandemic are lying when they say the technology is too hard. They are power-mongers and law-breakers.

I wholeheartedly agree with you. And I'm really just playing Devil's Advocate looking for something that will convince the board, or at least more owners, that the current board position is untenable and indefensible.

I know Zoom has an option to include phone-in numbers for those with only POTS (plain old telephone service), but that's an extra cost. The board doesn't want to spend a dime on any of it (like an inexpensive registered Zoom account needed to arrange for and set up meetings that exceed half-an-hour in length), never mind pay extra for the phone-in service.
RebeccaA7
(Texas)

Posts:4


10/26/2020 6:57 PM  
You’re going to want to check with the documents to ensure they allow teleconference meetings. This should be in the Bylaws for the association typically.

However, double check while you’re in there about board member terms and the requirements to hold an annual meeting. Most documents that I’ve seen state something to the effect of: subsequent meeting of the members will be held in the same month every year.

You may find that when the term ends, the seats are actually vacant.
GeorgeS21
(Florida)

Posts:3602


10/26/2020 7:22 PM  
I’m thinking meeting can be via telecon or online - don’t think any court will have an issue with this, at this time.
RebeccaA7
(Texas)

Posts:4


10/26/2020 7:31 PM  
Depends on the judge, honestly. I’d just check the bylaws just to err on the side of caution.

Zoom meetings are really quite simple to hold. If the documents state that the terms are one year, typically those seats expire at that time, so the seats are vacant and technically, any decision made by the board could be considered null, i.e. budget approval, repairing a fence, etc. Since all seats expire every year, they couldn’t “appoint” each other to the vacant positions until such time as an annual could be held. This may be the leverage needed to demand an annual election. The bylaws will also outline special meetings, which can typically be called by a percentage of the membership or the president of the board. Bylaws are great documents to know.
AugustinD


Posts:4828


10/26/2020 7:33 PM  
Posted By RebeccaA7 on 10/26/2020 7:31 PM
Depends on the judge
Depends more on the state and local laws during the pandemic.
GeorgeS21
(Florida)

Posts:3602


10/26/2020 7:34 PM  
Nah - I’d err on the side of getting the meeting done.
JohnC46
(South Carolina)

Posts:10366


10/27/2020 10:38 AM  
We have also "cancelled" our 2020 Owners Annual Meeting. We are preparing a package including financial and status reports (about 10 pages long) to be mailed to each owner in November. Part of the package says the existing BOD will remain in place until the 2021 Annual Meeting to be held on or before 04/15/2021. We are also announcing that there is an open BOD position (1 of 5) and anyone can submit a request to be be appointed by the BOD.

Of course we do not have an ankle biters after us.
AlbertE
(Maryland)

Posts:11


01/07/2021 6:27 PM  
So I haven't received a response. What should my next steps be? Does the D&O insurance cover members if they are not elected?
AugustinD


Posts:4828


01/07/2021 7:34 PM  
-- What, if anything, do your covenants and bylaws say about resolving disputes?

-- Per https://www.marylandattorneygeneral.gov/CPD%20Documents/Tips-Publications/132.pdf
contact the Maryland attorney general and ask if it will pursue a board that refuses to run an annual election.

-- Post back with the Maryland Attorney General's response. Preferably within the next two weeks.

You
r
welcome.
CathyA3
(Ohio)

Posts:1484


01/08/2021 10:36 AM  
Posted By AlbertE on 01/07/2021 6:27 PM
So I haven't received a response. What should my next steps be? Does the D&O insurance cover members if they are not elected?




You'll have to read the wording of your actual policy, but I expect the question will hinge on whether the directors and officers were elected or appointed by lawful means. This typically means through a valid election or through appointment by the board at a board meeting that was properly noticed, etc. etc. It may also include board members who remain in their positions if there is an "acceptable" reason the annual meeting was postponed (eg. pandemics or hurricanes) - this will depend on what your bylaws/state statutes say about this category.

What will likely not be covered by D&O insurance are self-appointed board members (it happens) or those who were elected due to "irregularities" in the process - at least if the insurer finds out about this stuff and uses it to deny a claim.

Disclaimer: I'm not a lawyer or an insurance professional.
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