Open Meetings Requirement

I live in Kansas covenant community. Kansas House Bill 2472 which became effective 1/1 and includes the requirement for open meetings and holding the Board accountable to the level of a trustee. Our HOA has a President, Vice-President and management company that handles everything because we can't get anyone to volunteer. The position of Secretary, Treasurer, and 3 director positions are open. An attorney advised to have as few meetings as possible to avoid being sued for inappropriate actions. The plan was to have 2 Board Meetings January/July and an annual meeting in October. The problem with that is the President told me she can't make a decision to water the trees we planted the last several years without a Board Meeting. We've had almost 30 days of 100 degree weather and I'm watching couple thousand dollars in trees burn up. We have a maintenance budget and the a watering service was found for $40/hr. Do we really need a meeting to approve watering our trees?

Is the Design and Architectural Control Committee required to have a meeting to approve requests? The Kansas Bill says that open meetings are required for all meetings of the Board and it's committees. The requests we typically get are for a fence, shed or painting.

If we have 2 Board meetings a year and need a meeting to spend money, it just seems nothing will ever get done. Any advice on how to balance these issues is greatly appreciated.

Thanks,
Kathy

The management company is telling the President she can't make the decision. I've written numerous emails to the Board since Spring asking about a plan and each time it's sent to the mgmt company who then comes back with they are looking into it but can't act until there's a meeting. When we bought the new trees we got water bladders that you can put around trees to slowly water. I asked if those could be used and was told by the mgmt company that they would have to consult with a landscape company and the Board. It seems every action requires the Board and a meeting.

The sprinklers are connected to our lakes which are fed by mother nature. We have 3 and they are about 1 1/2 acres each. Only the primary lake is at issue since the common area is much larger. We have no other amenities except the lakes. Using mother nature to water works great until there's a drought. Last year the Board approved funds to add city water like we had done 7 years prior during another drought. It's $1500-$2000. It was late in the year and didn't get done. The Board now thinks it's a waste of money and won't do it. They decided to save the water we do have and not water the common areas around the main lake. I've been pushing since April for a water plan to at least save our tree investment and have gotten nowhere with the Board or the Mgmt company. They are looking at infrastructure to hook up to city water which could cost $10K+. I think we need an emergency plan to prevent further losses.

The By-Laws require 3 directors and 3 officers, if Treasurer and Secretary are combined. The mgmt company was brought in several years by a vote of the board to manage covenants due to lack of volunteers. This year they are handling everything. The liability issue is keeping people from volunteering that otherwise would.

The By-Laws say the Board has power to cause the common area to be maintain and covenants say the common area has to be maintained to a first class standard and requires a 2/3 vote of the members to reduce the standards. The By-laws also have a section that the assessment shall be used for purposes as the Board shall determine necessary and advisable.

Hi Kathy:

If there are no inappropriate actions, then no one can be sued for violating. Within an HOA the inappropriate actions must be “willful” and “wonton” violations for an individual to be held accountable and have any liability. Therefore, is allowing trees to die and the monetary investment to be wasted just because someone is afraid of turning on the water potentially not wrong?

This morning we had an irrigation stub up get broken by some kids, do you think we called a meeting before turning off the irrigation pump and fixing? NO … we took care of necessary business for the good of everyone in the HOA.

They need to just water the trees. Also, if they feel they need more meetings then have the meetings. Depending on size and items taken care of within an HOA some meet monthly while others might be every two or three months. Just be sure to meet enough to insure HOA business is taken care of properly for the benefit of everyone.

Hi Kathy:


The Board needs to keep in mind that the MC is a sub-contractor/employee of the Board. A contract is completed where a Board gives some everyday items to the MC to oversee such as collecting assessments, sending newsletters, CCR questions for members, etc. to relieve some everyday burdens from board members. However, the Board is the ultimate responsible party to insure the MC and others properly follow the documents and properly perform HOA business.


We are all volunteers and homeowners and periodically everyone makes mistakes. Honest mistakes cannot be held against an individual. Where liability comes into play is when an individual willfully, wantonly, deceitfully, etc. does not follow the HOA guidelines and other laws.


This is a difficult question because we do not know the financial status of the HOA along with other potential problems. If you have irrigation and water available, then utilize. If not then everyone needs to consider other ideas. It does state that it is to be maintained, so not maintaining (if possible) would potentially violate the governing documents.

An idea during the drought might be to have homeowners “adopt a tree”. Get the bladders out and everyone who adopted a tree can fill from their home and make sure the trees get enough water to hopefully save during the drought.

You have a passion for your HOA and appear to be familiar with your documents. Maybe you should step up at next election then can try and fix the items where you and other homeowners are concerned.

Hi Petunka:

There appears to be two members on the board with the rest vacant positions.

Per:

Our HOA has a President, Vice-President and management company that handles everything because we can't get anyone to volunteer. The position of Secretary, Treasurer, and 3 director positions are open.

However, it would be interesting to have clarified from OP exactly how many Board of Director positions for the HOA per their documents. As a general rule the membership elects the board then the board within themselves determines the Officer positions (President, VP, Secretary, and Treasurer). I would bet the HOA has a 5 member board per their documents.

Hi Kathy:

I had a feeling you might have been past BOD member. Darn … thought you had a 5 member board due to statement about 3 director positions open. Apparently you must have only 1 position open and I think you should think about asking to be appointed by current board to fill the position. LOL … guess it was good no one took me up on my bet that it was 5 positions.

FYI … potentially the attorney and MC have over reacted with regards to the HB. Per your comment the HB references that board is held accountable to level of trustee. In most states this is already in place and in many instances is noted as “Fiduciary Duty”. In essence it means the Board of Directors and Officers will take care of the HOA as if it was their own personal property and to benefit everyone equally. The following are definitions for your info:

Trustee Law Definition

Someone who holds title in trust for the benefit of another person and who owes fiduciary responsibility to that beneficiary. Also used loosely to refer to anyone acting as guardian or fiduciary with respect to another person.

Fiduciary

A fiduciary relationship encompasses the idea of faith and confidence and is generally established only when the confidence given by one person is actually accepted by the other person. Mere respect for another individual's judgment or general trust in his or her character is ordinarily insufficient for the creation of a fiduciary relationship. The duties of a fiduciary include loyalty and reasonable care of the assets within custody. All of the fiduciary's actions are performed for the advantage of the beneficiary.
I hope the “adopt a tree” idea takes hold as I am very much in favor of saving trees or other resources whenever possible.

Kathy,

I also live in a Kansas covenant community and I've been President of our HOA for 8+ years, which covers 175 homes. Since January when HB2472 was adopted, we've consulted with our attorneys multiple times regarding proper interpretation of this new law. Their consensus has consistently been that the Board is obligated to take all "necessary maintenance actions" to properly care for the HOA's common property, and failure to do so is a dereliction of its duties. The Board must act or the Board members may be subject to an action brought against them by the unit owners. I suspect your governing documents mandate that the Board exercise its authority to properly maintain your common property (eg. watering trees, mowing grass, etc.) as an integral part of its duties, as its typically an important role in any Board's duties. The fact that the positions of Secretary, Treasurer and 3 director positions are still open has no bearing on this issue. You still have a valid and functioning Board of Directors and its empowered with the authority to act.

While it is true that all decisions to be made by the Board must be done in an open meeting, and advance notice of that meeting must be given to all Board members and unit owners at least 5 days in advance, under the new law your Board is permitted to conduct an EMERGENCY meeting in which no advance notice is required. As stated in HB2472:

Section 12(e): "Unless the meeting is included in a schedule given to the unit owners OR THE MEETING IS CALLED TO DEAL WITH AN EMERGENCY, the secretary or other officer specified in the bylaws shall give notice of each board of directors meeting to each board member and to the unit owners."

All your Board needs to do is declare and hold an emergency meeting and make the decision to water the trees. In this instance, no advance notice is required. Our Board does this from time to time when a situation warrants it, and our attorneys stand behind the Board's right to declare an emergency meeting. Further, HB2472 states:

Section 12(i): "During the period of declarant control, INSTEAD OF MEETING, the board of directors MAY ACT BY UNANIMOUS CONSENT as documented in a record authenticated by all its members. The secretary promptly shall give notice to all unit owners of any action taken by unanimous consent. After termination of the period of declarant control, the board of directors MAY ACT BY UNANIMOUS CONSENT only to undertake ministerial actions or to implement actions previously taken at a meeting of the board."

Legal Dictionary: "Ministerial actions - relating to or possessing delegated executive authority; relating to or being an act done after ascertaining the existence of a specified state of facts in obedience to a legal mandate and without exercise of personal judgment or discretion."

Therefore, if your governing documents mandate that your Board take any actions required to maintain your common property, and I suspect they do, then that's the "legal mandate" needed to make the decision to water the trees and without the requirement for an open meeting or any meeting at all, provided any such decision is unanimous among the EXISTING Board members.

If you're still troubled with whether the decision to water the trees is a "ministerial action" or would be considered an "emergency" you still have another option. Also stated in HB 2472:

Section 12(j): "Even if an action by the board of directors is not in compliance with this section, it is valid UNLESS SET ASIDE BY A COURT. A challenge to the validity of an action of the board of directors for failure to comply with this section may not be brought MORE THAN 60 DAYS after the minutes of the board of directors of the meeting at which the action was taken are approved or the record of that action is distributed to unit owners, whichever is later."

To validate the decision to water the trees, all your Board needs to do is distribute a copy of the minutes from the meeting in which the decision was made to all the unit owners. The unit owners then have only 60 days to challenge the decision, and in my opinion that's not likely to occur if you also include in the minutes the rationale for watering the trees (protecting your HOA's previous investment). After 60 days, the unit owners have no legal recourse to challenge the decision.

In my opinion, relying on the advice of an attorney that also works for the management company is not necessarily a conflict of interest. The management company would have no exposure to liability if your Board is challenged on its decision to water the trees. It's only the Board that would be sued, and therefore this attorney needs no protection from being sued (unless it's considered malpractice, which is very difficult to prove). However, I question the usefulness of this attorney because I believe he/she is reading way too much into HB2472 and not complying with the spirit of the law. HB2472 was not meant to overly burden or tie a Board's hands when conducting the ordinary business of the HOA, but rather to force all Boards to conduct the business in an open and impartial manner, and to provide only a minimum level of sound practices to be followed by every HOA in Kansas. If your Board does not like the advice from this attorney, it needs to hire another competent attorney.

In regards to your Design and Architectural Control Committee, yes it is required to follow the same statute for open meetings and advance notices to unit owners. This committee operates under the authority of the Board, and as such it must follow the same requirements stated in this law. Our committee holds monthly meetings and we provide one annual advance notice (pre-determined schedule) to the unit owners at the beginning of each year, which satisfies the notice requirement in one shot. We then distribute monthly meeting minutes reflecting architectural approvals/denials following each meeting to the unit owners. Distribution of these minutes also meets the "60 day" window for a decision to be challenged, so after 60 days any decision made by the committee can no longer be disputed.

Hope this helps...

PetunkaM,

I agree that if the HOA were to sue the management company (MC), its on-staff attorney could not represent both parties. In all likelihood he/she would represent his/her employer, thus leaving the Board to fend for itself. But that's not the situation I was referring to. The situation I posed was a homeowner challenging the legality of a decision by the Board. In the present case, if a homeowner disagreed with the Board's decision to water the trees, or even objected to its decision to hold an emergency meeting, the Board stands alone to answer the suit because the management company is merely acting as an agent for the Board, the same as if the Board relied upon the advice of an outside attorney. In this specific case, I don't see the relationship with the on-staff attorney as a conflict of interest. However, I also agree that relying upon the legal advice of the MC's on-staff attorney can and would present a conflict of interest when dealing with issues between the Board (or HOA) and the management company. For that reason alone, the two should never mix. It is in the best interest of the Board to always determine if ANY attorney is acting in its best interest.

As for a "valid and functioning Board" and certain positions remaining vacant, nothing in HB2472 compels the HOA to fill those positions before the Board can exercise its authority to make decisions and act upon them. HB2472 only requires that directorships be filled in accordance with the governing documents, so it all comes down to what those governing documents state. As a point of reference, our Board has had 3 vacant positions for years and our attorneys never saw a problem with it. And I know of 7 other HOAs in the immediate area that are in the same position.

But as you said, "everyone is entitled to their own opinions" and it's what the courts eventually say that determines the final answer.

There is a Board Meeting this evening and hopefully the trees are on the agenda. I requested an agenda upon notice of the meeting but the MC said one was not provided to the Board and therefore would not be provided to the owners. Seems odd to call a meeting with the Board having an agenda. I provided some items I'd like added to the agenda since homeowners can not speak at a board meeting but there is time at the end if we'd like to comment on any items affecting the community. Hopefully we'll leave with a plan to save the trees.