Motions at Annual Meetings

i tend to agree with the attorney and laws: the board runs the HOA, and the owners run the board. The way each does their job is listed in the by-laws, so unless the by-laws allow for the owners to vote on such things, then they can't. In general, the by laws typically allow the owners to vote on board membership, and the occasional recall notice.

Thanks Linda. That thought occurred to me as well but after careful reading it appears that both the Maryland HOA Act and our By-Laws are silent on the subject of when an agenda item can be submitted. More to the point they do not indicate that the resident has the right to submit a motion at all. They do say that a resident has the right, at an annual meeting, to discuss any issue relevant to the Association. This distinguishes an annual meeting from a special/regular meeting where comments can be restricted to the agenda items.

The rights of our residents are further specified with respect to petitions, referendums, approval of Board expenditures over a certain amount, but nowhere does it say that they can make and pass a legally binding motion. I am still puzzled as to why many people, including some of the responders to this forum, believe that making motions at annual meetings is a member right.

Dave

DavidS3 raises very important questions which seem insurmountable. Most of the answers to the questions are in Robert's Rules of Order Newly Revised (RONR). His questions are not new; they occur over and over again. This book should be adopted as the parliamentary authority for your association.

The annual meeting is a members' meeting, not a board meeting that the members attend. The board should give an accounting of its stewardship with the various required reports. It is entirely appropriate for members to offer motions as a result of the reports, not just to "rubber stamp" the reports. But votes on those motions must be fair.

Certainly, members can offer motions to be considered at the annual meeting. Normally, they should be provided in advance and included in the notice. Even a motion to disband the board is in order.

Making a motion is the way a member gets his/her interest on the association agenda. RONR provides much more than voting on motions. Many of the motions should be acted upon in other ways, such as being referred to a committee for further consideration, for example. A vote to refer the matter to a committee does indeed get the matter into the association agenda.

But another way members get their interests on the association agenda is the calling of a special members' meeting. In general, nonprofit corporation laws provide requirements for special members' meetings without restriction as to subject. In a sense, this is equivalent to petition drive for a referendum vote in municipalities and state government. This is yet another way that the members of the association can give direction to the board.

Perhaps one of the more difficult parts is getting a fair vote — particularly for associations that have poor attendance at members' meetings. A statement from an attorney that I believe captures the fairness issue is, "It is a basic principle of corporate law that a vote or proxy is only valid, and beyond attack, if sufficient information is given to the member casting such a vote or issuing such a proxy to enable that member to make a fully informed decision before voting." Meeting this fairness consideration is very important but not easy. But one aspect is clear: general proxies should not be allowed. Each member must make the informed decision, which can be made by directed proxy for those unable to attend the meeting. But that must be fully informed before voting. That is the challenge.

Methods for getting a fair vote with members being fully informed before voting is fodder for another post. Does anyone have a fair method to offer?

I don't think in arizona you could allow a motion from the floor to be voted upon. You could allow a motion to take some action, research, be tabled, etc., but to be voted on, we would need to have it on our absentee ballots. And since it just came from the floor, it can't be on our ballots, and if it isn't on our ballots, we can't vote on it.

At least, as far as I understand.

Thank you for your responses. At a minimum they are helping me think this through. I still come back to the same basic question: What statute or article in the Governing documents confers upon a member the right to make a motion at an annual meeting? RONR alone doesn’t do that – it does imply that such motions can be made and provides the procedures for handling them, but RONR itself is optional when it comes to running HOA meetings. However, I think DonN’s last post zeros in on the real issue.

I think we all agree that the Annual Meeting is a member’s meeting and different from regular or special Board meetings. We also agree that all present have the right to stand up and speak on any topic relevant to the Association. And, if the statutes and governing documents are silent on the residents right to make motions, then they also do not prohibit them either. As Don suggests the question remains as to what is a proper motion and what is its legal force.

I cannot understand how a motion that usurps the powers given to the BOD by the Bylaws and Statutes can be proper. The Governing Documents specify some ways that this can be done with provisions for things like recall of directors, call of special meetings by residents, petitions for referendum, changing By-laws, limits on board powers, etc. Thus a motion to reduce the assessment by 50% would clearly be improper because the Bylaws empower the BOD to do this in accordance with specific procedures (in our case B&F Committee and Board review, presentation at an open forum town meeting, and subsequent modification and adoption at a regular Board meeting).

Similarly, a motion that bypasses the processes defined in the Governing documents would seem to be improper. I believe that a motion to disband the Board is improper because our documents have procedures by which the Board is established by the entire electorate and other procedures for removing Board members for cause. But, as Don points out, another overriding consideration is the right of the members to have proper notice of matters on which they are eligible to vote. This would clearly not be the case with substantive motions from the floor and as Don suggests it is difficult to see how such notice could be attained, particularly if one applied the same criteria as for referendums and elections.

If a motion is allowed and approved by those present what legal force can it have? The motion to reduce assessments by 50% might seem like a good idea to those residents attending the meeting but is the Board obligated to execute it? If so, what is to prevent them from exercising their fiduciary responsibility and rescinding the motion immediately after the annual meeting is over?

I think Don asks the $64 (or is it now $64M) question when he asks “Does the law in any state distinguish between types of motions that can and cannot be made?” It doesn’t in Maryland, but I believe that such a law should allow only those motions that can legitimately be made without violating the rights of members who are not present. This would include the administrative type motions mentioned by Don but also, as I believe Roger suggests, might include motions for non-binding resolutions, that would put resident concerns on the Board’s future agenda.

This is in response to the 02/07/2007 12:20 PM post by DavidS3.

[What statute or article in the Governing documents confers upon a member the right to make a motion at an annual meeting?]Posted By DavidS3 on 02/07/2007 9:20 AM

[And, if the statutes and governing documents are silent on the residents right to make motions, then they also do not prohibit them either.]Posted By DavidS3 on 02/07/2007 9:20 AM

Reply — Unfortunately, the right to make a motion at a members' meeting may not be explicitly stated. However, read all the provisions that define voting (such as in person or by proxy), voting (action by majority ...), and other aspects of the meeting. Member's business is conducted at a members' meeting, which requires votes. I agree that the interpretation of "not prohibited" is "authorized to".

[ cannot understand how a motion that usurps the powers given to the BOD by the Bylaws and Statutes can be proper.]Posted By DavidS3 on 02/07/2007 9:20 AM

Reply — The organization is an association of the members, not an association of the board. The board derives its powers by what is written in the bylaws which are approved by the members. Since members can make any motion at an annual meeting that is duly noticed, and since members can petition for a special members meeting which has no restrictions on subject matter, the members have the authority to direct or overrule the board by a members' motion. It is equivalent to a referendum in municipal law. A redirecting members' motion is much less disruptive that a recall of board members.

[Thus a motion to reduce the assessment by 50% would clearly be improper because the Bylaws empower the BOD to do this ...]Posted By DavidS3 on 02/07/2007 9:20 AM

Reply — The bylaws may authorize the BOD, but unless the bylaws specify that the action can ONLY, or exclusively, be taken by the board, the members' motions are of higher rank.

[a motion to disband the Board is improper]Posted By DavidS3 on 02/07/2007 9:20 AM

Reply — A proper motion to disband the board would be a motion to amend the bylaws to eliminate the board. Such a motion is proper though it may be unwise.

[If a motion is allowed and approved by those present what legal force can it have? The motion to reduce assessments by 50% might seem like a good idea to those residents attending the meeting but is the Board obligated to execute it? If so, what is to prevent them from exercising their fiduciary responsibility and rescinding the motion immediately after the annual meeting is over?]Posted By DavidS3 on 02/07/2007 9:20 AM

Reply — Whether stated in the bylaws or not, the fundamental principle should be that members are fully informed BEFORE voting. Action on substantive motions made at a meeting should be postponed to the next annual or special members' meeting which can be properly noticed. Once the members' act, the board is obligated to implement the decision of the members. But there is nothing preventing the board from calling a special members' meeting to reconsider any action by the members they believe is not in the interests of the association.

MEMBERS SHALL BE FULLY INFORMED BEFORE VOTING — This is the toughest question of all. The first part is to charge the board with providing full and accurate information in the notice. But additional information may surface in the discussion at the meeting. Those not in attendance should be advised of that discussion BEFORE voting. My conclusion is that this requires the vote to be postponed to a special members' meeting for vote only (in person or by directed proxy, or equivalent) with a revised notice that contains the new information. It is an extra step — but a very important one.

Roger - you'll have to ask the Arizona legislature that question. I wasn't consulted when they were writing that bill.
It could be to prevent a few owners out of 134 (like in our HOA) from placing proposals or nominations from the floor without the other owners having a vote. If folks want to make proposals or nominations they could get them on the agenda/ballot which would go out to all the owners.
Why are proposals or nominations from the floor so sacred? Why do you want a handful of owners making decisions for all? I believe the SEC requires corporatons (and HOAs are corplorations) to include all proposals under consideration at the annual meeting in the proxy sent to stockholders. It would be chaos to allow stockholders in attendance to make proposals from the floor while the probable majority of other stockholders are not present and privy to the proposal. Harold

The posts above identify a number of generic issues under the general classification of fair voting. For example, I am interested in the experience in Arizona which doesn't allow proxies, but rather requires absentee ballots.

For these and other reasons, I have created a new topic with title "Voting, Proxies, Absentee Ballots, Arizona Law, and Fair Voting". This expands the questions posed by DavidS3.

My general comment to the post by DavidS3 Posted:02/10/2007 11:34 AM is that the right to participate shall not be abridged. That includes the right to make stupid motions. We often forget the second part of "majority rule" which is "majority rule with minority rights". Search the internet with that phrase and read some of the articles to understand the richness of the concept. For owners associations, we have Robert's Rules of Order Newly Revised which provides a wealth of information and practices based on "majority rule with minority rights".