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Subject: "Organizational" meeting - help me interpret Florida statute?
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GeorgeS21
(Florida)

Posts:3608


01/07/2021 5:24 PM  
Hi All,

Our annual meeting just adjourned, and the organizational meeting (election of officers) followed. The nominees that ended up being elected for full terms (three), plus those appointed (the next three on the list that lost and were to fill seats being vacated) then sat at a table - none had done any politicking to determine how best to organize - so, as expected the only person that none in the community cared for, and who doesn't live in the community, but owns property, agreed quickly to be president.

My question is this: Is the new Board required to meet immediately following the annual member meeting? While there is mention of the organizational meeting in FS 720, I can't find anything that supports what our property manager says, ie that there MUST be a president and a treasurer at all time, eg, the board MUST elect a president and treasurer immediately following the annual member meeting a the organizational meeting (in this case, even when they are not prepared to do so).

Thoughts?

FS 720

(e) At the first board meeting, excluding the organizational meeting, which follows the annual meeting of the members, the board shall consider the desirability of filing notices to preserve the covenants or restrictions affecting the community or association from extinguishment under the Marketable Record Title Act, chapter 712, and to authorize and direct the appropriate officer to file notice in accordance with s. 720.3032.
AugustinD


Posts:4845


01/07/2021 5:41 PM  
-- Perhaps the manager is concerned about check writing. If so, it is a fair question: Is there someone on the new board who can sign checks?

-- I see nothing in FS 720 or FS 617 requiring a president and treasurer at all times.

-- The HOA's Articles of incorporation may have a bit more to say.

-- FS 617 (for nonprofit corporations) offers only this:
===
617.0205 Organizational meeting of directors.—
(1) After incorporation:
(a) If initial directors are named in the articles of incorporation, the initial directors shall hold an organizational meeting, at the call of a majority of the directors, to complete the organization of the corporation by appointing officers, adopting bylaws, and carrying on any other business brought before the meeting;
(b) If initial directors are not named in the articles of incorporation, the incorporators shall hold an organizational meeting at the call of a majority of the incorporators:
1. To elect directors and complete the organization of the corporation; or
2. To elect a board of directors who shall complete the organization of the corporation.
(2) Action required or permitted by this act to be taken by incorporators or directors at an organizational meeting may be taken without a meeting if the action taken is evidenced by one or more written consents describing the action taken and signed by each incorporator or director.
(3) The directors or incorporators calling the organizational meeting shall give at least 3 days’ notice thereof to each director or incorporator so named, stating the time and place of the meeting.
(4) An organizational meeting may be held in or out of this state.
History.—s. 20, ch. 90-179; s. 11, ch. 2009-205.
===

-- The manager should be asked to cite the law that says what he claims.

-- It would be reckless to elect a president and treasurer when a board majority is not prepared to do so.

-- Good practices of course strongly recommends getting a president and treasurer sooner rather than later.
CathyA3
(Ohio)

Posts:1490


01/08/2021 5:52 AM  
The organizational meeting usually happens right after the annual meeting, but if your governing docs and/or state statutes don't require it, it should still happen within a month. You need someone to sign contracts and other legal documents, and you need someone to sign checks (probably the more urgent role, assuming you have bills coming in). These can't be the same person.

So even if the laws don't require prompt action, the realities of running a corporation do.
GeorgeS21
(Florida)

Posts:3608


01/08/2021 6:40 AM  
A and C,

Yes, understand the need to gave a cohesive organization to conduct business, but also recognize that goofy effected directors attempting to organize in real time can be less than organized.

I’m trying to ensure I understand how the HOA property manager determined it was “required” that there be a president and treasurer at all times - in advance of discussing this with him.
CathyA3
(Ohio)

Posts:1490


01/08/2021 6:59 AM  
Posted By GeorgeS21 on 01/08/2021 6:40 AM
A and C,

Yes, understand the need to gave a cohesive organization to conduct business, but also recognize that goofy effected directors attempting to organize in real time can be less than organized.

I’m trying to ensure I understand how the HOA property manager determined it was “required” that there be a president and treasurer at all times - in advance of discussing this with him.




If you and Augustin can't find anything online about this, there probably isn't anything. I'm willing to bet good money that you and Augustin know more about this stuff than the PM does. :-)

If it were me, I'd just ask him why he believes it's required and to cite his sources. Absent any specific language in your bylaws or FL statutes, he's likely confusing the need to be prepared to address urgent needs with actual law.
GeorgeS21
(Florida)

Posts:3608


01/08/2021 9:45 AM  
PM rep just responded they would forward it to me - but, that the basis is what the HOA attorney told them. The current HOA attorney is not an HOA attorney, but a generalist. Moving to an HOA attorney was on the list of things to do for the last board, but not sure the new board will follow-through.

Now, I think I know there is no specific requirement - at least in the manner in which it is being related, while I also understand why it is a good idea to always have officers. But, I can't see rushing to do this when the incoming board is ill prepared to decide in a manner that is knowledge based.
JohnC46
(South Carolina)

Posts:10372


01/08/2021 10:59 AM  
George
The BOD can all for an Election of Officers (among themselves) whenever they want. Maybe if the BOD sees/believes the present Officers are not hacking it, they will call for an election.
JohnC77
(Washington)

Posts:438


01/08/2021 12:21 PM  
In California, when we file Corporation updates with the Secretary of State's office, we have to list on the Statement of Information form, it asks for CEO, Secretary and CFO.

Your Bylaws will make provisions that the association shall have 4 officers, a CEO, Secretary, VP and CFO. I am wondering, at what point in time does common sense kick. You are only to going to do something if you have a statue or case law to back you up?

JMTC
JohnC46
(South Carolina)

Posts:10372


01/08/2021 2:14 PM  
George
Is your issue how they did it or who they elected?
CathyA3
(Ohio)

Posts:1490


01/08/2021 2:54 PM  
Somebody can correct me if I'm wrong, but selecting the wrong person for an officer position is relatively easy to fix. Officers serve at the pleasure of the board, and they may be removed with or without cause. Many fewer hoops to jump through than with removing an elected board member.

So if one of the officers proves to be a bad selection, the board can vote to remove and replace them whenever they choose.

If Mr./Ms. Incompetent is good buddies with one or more board members, that's a different issue...
GeorgeS21
(Florida)

Posts:3608


01/08/2021 7:19 PM  
No issue with who was chosen, except the new board was ill prepared.

I try and understand when process departs from what I expect - sometimes it’s because I don’t understand, and sometimes it is because it’s because it isn’t right .... 😃
GeorgeS21
(Florida)

Posts:3608


01/11/2021 9:37 AM  
Bit of follow-up.

I'm continuing my email (on the record) discussion with the property management company's rep.

Their last statement is that there must be a President and Treasurer since the Bylaws require it. I have noted, in return, the only mention in the Bylaws of anything closely resembling this is:

"Section 2. Election of Officers. The election of officers shall take place at the annual membership meeting."

I note that this, in itself cannot be correct, since the election of officers is actually accomplished at the BOARD meeting following the annual membership meeting. The membership meeting I adjourned, then the new Board meets. In our case, the Board of four (one remaining from last cycle, and three elected by the membership) convened immediately, then voted to appoint the the next three nominees with the highest votes to the three positions left open by directors resigning prior to their three year rotating terms - for the remainder of those terms. Then they went back and forth asking one another if they would be interested in being president, VP, secretary and treasurer - 30 minutes before one finally said OK. I am not naive - I did not judge this to be for show - it was because none of them had actually considered what to do at this point - and, again, not unusual, right? :-)

So, nothing in FS 720 or FS 617, nothing in Bylaws ... at the point the only thing substantive is the statement from a generalist attorney on retainer is that the HOA MUST, MUST, elect a President and Treasurer immediately.
AugustinD


Posts:4845


01/11/2021 10:10 AM  
Posted By GeorgeS21 on 01/11/2021 9:37 AM
Bit of follow-up.

I'm continuing my email (on the record) discussion with the property management company's rep.

Their last statement is that there must be a President and Treasurer since the Bylaws require it. I have noted, in return, the only mention in the Bylaws of anything closely resembling this is:

"Section 2. Election of Officers. The election of officers shall take place at the annual membership meeting."
I want to confirm: Elsewhere do the Bylaws say the Board (and not the membership) selects the officers? If in another section, the Bylaws say the Board selects the officers, then Section 2 conflicts with this other section. A court would read the document as a whole, and so that the interpretation is not strained. A court would also look at FS 720 and FS 617, on the subject of officers. FS 617 indicates that it may be either the Board or the membership that selects/elects officers.

I note that this, in itself cannot be correct, since the election of officers is actually accomplished at the BOARD meeting following the annual membership meeting. The membership meeting I adjourned, then the new Board meets. In our case, the Board of four (one remaining from last cycle, and three elected by the membership) convened immediately, then voted to appoint the the next three nominees with the highest votes to the three positions left open by directors resigning prior to their three year rotating terms - for the remainder of those terms. Then they went back and forth asking one another if they would be interested in being president, VP, secretary and treasurer - 30 minutes before one finally said OK. I am not naive - I did not judge this to be for show - it was because none of them had actually considered what to do at this point - and, again, not unusual, right? :-)
I agree this is not unusual.

I am keeping in mind that board meetings within membership meetings is nonsensical. Only a meeting of one body (either the board as a "body" or the membership as a "body") is allowed at a time.


So, nothing in FS 720 or FS 617, nothing in Bylaws ... at the point the only thing substantive is the statement from a generalist attorney on retainer is that the HOA MUST, MUST, elect a President and Treasurer immediately.
-- I trust you know that a board is not required to take the advice of the HOA attorney. The Board loses no protections per se if it does not. Why? Because whether the Board does or does not take the advice of counsel is a matter protected by attorney-client privilege. In a lawsuit, anyone saying the Board is not following the HOA attorney's advice would never be able to discover whether this is so.

-- To be frank: I think this dispute, caused by the PM and backed up by a generalist attorney, is dumb. If the PM and attorney both quit because the Board won't do as they want, on a matter that is pretty darn important for achieving the best board possible, maybe their quitting is a good thing. I bet there are plenty of other PMs and attorneys out there that would be happy to sign on with your HOA. This PM and this attorney are wasting a lot of people's time and getting this new HOA Board off to a terrible start. They should both voice their opinions and then shut up. (That's my polite way of saying what I think the PM and attorney should be told. My firmer way would be deleted by the moderator.)
CathyA3
(Ohio)

Posts:1490


01/11/2021 10:36 AM  
Posted By AugustinD on 01/11/2021 10:10 AM
... snip ...

-- To be frank: I think this dispute, caused by the PM and backed up by a generalist attorney, is dumb. If the PM and attorney both quit because the Board won't do as they want, on a matter that is pretty darn important for achieving the best board possible, maybe their quitting is a good thing. I bet there are plenty of other PMs and attorneys out there that would be happy to sign on with your HOA. This PM and this attorney are wasting a lot of people's time and getting this new HOA Board off to a terrible start. They should both voice their opinions and then shut up. (That's my polite way of saying what I think the PM and attorney should be told. My firmer way would be deleted by the moderator.)




I agree with Augustin on this. I'd recommend telling the PM and the attorney to cite their sources. Until they do, the board should do what they believe is in the best interest of the HOA. What's the biggest risk: doing without officers for a (short) period in order to get the best qualified appointed vs. possibly having to replace an immediately-appointed officer when that person proves to be a problem? That may tell you how to proceed. (Or possibly not, I think the answer depends on the people involved, so you may not be able to generalize.)
JohnC46
(South Carolina)

Posts:10372


01/11/2021 10:44 AM  
Posted By GeorgeS21 on 01/08/2021 7:19 PM
No issue with who was chosen, except the new board was ill prepared.

I try and understand when process departs from what I expect - sometimes it’s because I don’t understand, and sometimes it is because it’s because it isn’t right .... 😃



How would you prepare the new BOD? They did not need qualifications to get elected but they did get elected so into the fire with them. If qualifications were required, few BOD Members/Politicians would be elected.
JohnC77
(Washington)

Posts:438


01/11/2021 10:55 AM  
As we don't have your governing docs to review, I am going to assume, based on experience, you are supposed to have officer. Matter of fact, somewhere it probably says the association SHALL have a President, VP (maybe) Secretary and Treasurer.

I've conducted over a couple hundred annual meeting over the years and the general rule is officers are elected at the annual meeting, most would call an "organizational" meeting. Not sure why you need an HOA attorney to confirm this, this is basic corporate law and procedures. In addition, while directors may serve one, two or three consecutive years, officers serve for a period of one year, annual meeting to annual meeting.

So common sense would suggest that on the agenda for the annual meeting, one of the last things to be accomplished is the election and placement of officers. Candidates being elected or appointed should be prepare for this to happen at the annual meeting.

So, when does common sense start to kick in?
JohnC46
(South Carolina)

Posts:10372


01/11/2021 12:06 PM  
While I have never seen "Officers" elected an an Annual Meeting, we do get the BOD together directly after the Annual Meeting for our Officer election. In all candidness, it is usually a "rigged" election as those remaining on the BOD usually have "cooked" something up.

We have had the same President and VP/Treasurer (myself) for the past 3 years. We would gladly relinquish our positions but we usually have to go begging for people to run and a common theme is I will run but I do not want to be an Officer. Out of our BOD of five (now 4 as one recently moved) two have no interest in being and Officer and rarely participate. I wish it was other wise but but is not. Some might say owner apathy but I say it is owner happiness. We have not had any ankle biters in over 3 years.
GeorgeS21
(Florida)

Posts:3608


01/11/2021 4:39 PM  
I want to be clear - there is and was no dispute, except wrt the PM rep’s response to my question.

But, most times potential board members have discussed what ifs, and how they would like to organize, prior to walking up and sitting at the board table and staring at the assembled (partially assembled since most of us were on line) - this clearly didn’t happen, and they were a bit flummoxed. They could have used a couple of days to discuss it a bit.

Augustin - the usual flow and wording about officers being elected by the board ... for one year. Nothing abby normal.
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