Motions Made by Members at Annual Meeting

Hello, long time lurker. Thanks for all the great info.

I am a "Sophmore" board member (in my second year of a three year term), in a rather large association in Michigan of about 800 members, but only a little more than half of them re members in good standing (current in dues).

My question is in regards to our annual members meeting (and election of board of directors). Prior to me being on the board, members have made motions (and voted on) at previous annual meetings. Motions such as having the township clerk run our election, and another motion not allowing board members to hold a position of employment with our association for a period of three years after they leave office. Unfortunately, those motions were ignored by the previous board.

Now we have a more favorable board and myself and the other board members want to do what the membership requests, so we consulted with an attorney to see what we could do.

The attorney stated that the motions at the meeting, even if voted on and passed by the members present were not valid for a few reasons: It did not represent the entire membership (because absentee voters were not present to vote on the issue) and it needs to be ratified by a vote from the board of directors. His rationalle is "the membership could vote to have the dues lowered, or even eliminated, etc." The ratification of the board is necessary to prevent something like this from occurring.

We have members insisting it was valid, despite what our attorney states.

I recently attempted to ratify the "no board member should be allowed to hold a position of employment with the association" motion, and it was passed by a yes vote of all seven of the board members, but, now I (and the rest of the board)am being accused of trying to change the bylaws without a vote of the membership! Geez, all I was doing was trying to give the membership what they wanted!

My question is, where to go with it next? I want to make this valid, as I want to do what the membership requests. Is it just a matter of having it on the ballot to be voted on by the membership for the next annual membership meeting? Suggestions?

Boy this board member stuff is fun! I get paid a whopping one dollar a year to do all this. BTW, what is the purpose of the one dollar per year compensation? Thanks for your input.

Kevin

The "no board member should be allowed to hold a position of employment with the association" statement could be a policy adopted by the board. No need for a bylaw.

Many HOAs have this policy. It basically says you can't hold a board position and be an employee of the HOA at the same time. By employee, I mean on the regular payroll from the HOA.

However, the board could hire a board member for a job IF that member had a specific expertise not readily avaiable from the community and that member satisfied the bidding process the board has created.

Kevin,

In the book "New Neighborhoods" by Gary and Ryan Poliakoff the authors explain the difference between "Class I" and "Class II" rules. "Class I" rules are written into the governing documents and recorded into the public record. These are things like CC&Rs and bylaws. Because they have been established publicly and agreed to by all members, the threshold for changing them is high.

“Class II” rules are those that have been established by the board. “Class II” rules can extend provisions in the CC&Rs, but they cannot contradict them. For example, a “Class I” rule that homeowners must obtain permission to build a fence may be extended by a “Class II” rule that fences must be made of unpainted cedar wood. As in most associations, a “Class II” rule can be established at any Board meeting or overturned by a simple majority of members at a meeting where a quorum is present.

Your governing documents appear to allow for alterations to the Bylaws (a “Class I” rule) in one of two ways:

1. By a vote of “a majority of members” at a regular or special meeting of homeowners, if the notice of the meeting specifically includes an announcement of the proposed change. Note that this method of changing your bylaws requires not just a majority of the quorum, but a majority of "all members".

2. By a 2/3 vote of the Board at a Board meeting, providing that the amendment was announced and recorded into the minutes at the previous Board meeting. When an amendment is made in this way it must be approved by a majority of votes (not a majority of homeowners) at the next membership meeting.

It’s too bad that most governing documents are written by lawyers for lawyers, and not written to make things plain to homeowners.

Susan, thank you again for the reply. If I called it a bylaw, then I must have mispoke. We are being accused of changing the bylaws by enacting such policies. So the persons accusing us of "changing the bylaws" are the ones that are calling it a bylaw change. We have not altered any wording in any of our bylaws. We have enacted policies. Those policies are what people are saying "is a change to the bylaws". I am just trying to get it sorted out. Other boards have adopted policies and procedures in the past, but guess what, nothing is dated, nothing is filed, and if not for previous newsletters and board meeting minutes, there would be no documentation of the previous policies. This board currently dates everything, and keeps them on file.

You are correct that we the board called it a "policy" (see below) Most of the membership wants it to be a bylaw. The current board has attempted to make it a bylaw based on what the attorney explained to us "needs to be ratified by the board" as I mentioned earlier. Maybe we have bad info from the attorney?

I understand your point about it being a policy, but I have a concern that once the current board is replaced, then another board will not have to adhere to this policy? Am I right or wrong in this assumption? The reason I ask, is, members fear that if it is not a bylaw, then it could be ignored at a later date by another (future) board. There is no ramifications for the board ignoring policies. The current board did make and pass the motion that the membership requested at the annual meeting a few years ago, but again we are calling it a policy.

ACTUAL MOTION:

Employee Policy: (4) Director XXXX moves that anyone serving on the board or a member of their immediate family cannot hold a paid position with the association for a period of three years afterwards, family members include spouse, sibling, parent and children, second by Director XXXX: Roll call vote: (removed names for this posting) motion carried.

We have voted on and enacted other policies related to dues collection, use of the amenties by members not is good standing (to encourage members to pay their dues,) safety policies (we have lakes and beaches, playgrounds, children) etc. Again, we are being accused of changing the bylaws without a vote. I do not want to continue to do this if we as a board are in violation. Yes it is a small percentage (very small) of the membership that is actually making these accusations, and we do get plenty of positive feedback from the majority of the membership, as they are happy with the changes and can see the positive results we are acheiving, but again, I do not want to be in the wrong if we are by enacting such policies.

Lawrence, I understand your breakdown of Class I and Class II rules, thank you for the explanation as it helps. If I understand things correctly, as long as "policies" do not contradict the C&R's or bylaws, then it is considered acceptable to adopt and enforce policies?

Thank you for your explanation of the section of the bylaws I posted. That helps me out. I understand item number one explanation. If I understand explanation number two correctly (below, "majority" means we only need a majority of votes of the quorum present at the members meeting to get bylaw changes passed? No need to consider the absentee voters or those who chose not to show up?

"2. By a 2/3 vote of the Board at a Board meeting, providing that the amendment was announced and recorded into the minutes at the previous Board meeting. When an amendment is made in this way it must be approved by a majority of votes (not a majority of homeowners) at the next membership meeting."

If that is the case, then number 2 seems the way to go to get the bylaws changed, as there is no way we could get 50% of our members to even respond to the vote. Apathy is rampant in our association.

Again, thank you all for your time with this. "New Neighborhoods" by Gary and Ryan Poliakoff, I have to get this book! Thanks