By Laws Proposed Amendment

Started by BillB17 • 21 replies • 910 views

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BillB17 (South Carolina)
Posts: 92

Posted:

Our Association Annual Meeting is coming up in May. I submitted a proposed amendment to our Association By-Laws in accordance with our governing documents on Amendment by Members. I also included an explanation of the amendment in my submittal.

I received our annual meeting notice in the mail today. The amendment I proposed and explanation of the amendment is included in the mailing and is also listed for vote on the proxy ballot.

However, on the page where my proposed amendment and explanation is written, our Board of Directors added a few things:

1. What it means if you vote "yes".
2. What it means if you vote "no".
3. A recommendation from the Board that Members vote no to the amendment.

Their information on what is means if you vote yes or no is written to support their recommendation.

Do I have any recourse in this matter since the Board has added information to my proposed amendment without my knowledge or approval.

Thank you for you input.

TimB4 (Tennessee)
Posts: 21,062

Posted:

Quote:

Posted By BillB17 on 04/21/2018 6:40 PM

Do I have any recourse in this matter since the Board has added information to my proposed amendment without my knowledge or approval.

Your recourse would be to knock on doors and explain your position along with a recommendation that the amendment is adopted. I would also publish a flyer and deliver to all members saying the same. Additionally, when you knock on doors, have a stack of directed proxy forms (which assigns a proxy but specifies that the proxy votes a specific way) and ask that they fill out a proxy if they are not attending the meeting.

Basically, you have entered a political race and need to follow through to make sure your proposal is adopted.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Tim’s advice is excellent as usual. I cannot think of anything I would add that he has not already thought about. I would take note of his proxy option as that is what ... if allowed via your governing documents or State Laws ... can make or break individuals voting for your Amendment.

RichardP13 (California)
Posts: 3,868

Posted:

Sorry, I strongly disagree with Tim. No ballot should have the recommendation of one side or the other. You want to campaign and share your specific point of view, it MUST outside the actual ballot. In California, that would be violating Civil Code.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By RichardP13 on 04/22/2018 10:15 PM
Sorry, I strongly disagree with Tim. No ballot should have the recommendation of one side or the other. You want to campaign and share your specific point of view, it MUST outside the actual ballot. In California, that would be violating Civil Code.

Which South Carolina Civil code is violated?

When I even vote in my State or Local elections and for example there is a statute on the ballot ... opinions in many cases are noted and provided in a booklet sent out to all registered voters. Both pro and con opinions are mentioned in most cases as long as either are provided by any individuals who are for or against the proposed measure.

RichardP13 (California)
Posts: 3,868

Posted:

The Civil Code I referenced violating was California, not South Carolina.

When you vote in local, state and federal elections, besides candidates, there are measures or propositions placed on the ballots, BUT election campaigning materials advocating one view point or another are NEVER sent with the ballot, BUT separately and generally at least a month or more in advance.

What was done in this instance is pure BS.

GenoS (Florida)
Posts: 4,276

Posted:

It might be comparing apples to oranges but shareholder proxies for regular for-profit companies often include language that says things like, "The Board of Directors recommends that you elect Alice, Bob and Carol as Directors," and, "The Board of Directors recommends that stockholders vote in favor of the appointment of Dewey, Cheatem and Howe as the company's independent registered public accounting firm."

Those recommendations are commonplace. [Sample <-- I have no connection with or interest in this firm. It's an arbitrary proxy I found by using an internet search engine.]

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By GenoS on 04/23/2018 12:58 PM
It might be comparing apples to oranges but shareholder proxies for regular for-profit companies often include language that says things like, "The Board of Directors recommends that you elect Alice, Bob and Carol as Directors," and, "The Board of Directors recommends that stockholders vote in favor of the appointment of Dewey, Cheatem and Howe as the company's independent registered public accounting firm."

Those recommendations are commonplace. [Sample <-- I have no connection with or interest in this firm. It's an arbitrary proxy I found by using an internet search engine.]

The sample you attached does not ask for a specific vote on a specific candidate or a specific proposal, but merely voting instructions.

GenoS (Florida)
Posts: 4,276

Posted:

Quote:

Posted By RichardP13 on 04/23/2018 1:34 PM
The sample you attached does not ask for a specific vote on a specific candidate or a specific proposal, but merely voting instructions.

Oh come on.

"The Board of Directors recommends that you elect Messrs. Clawson, Griffin and Isaac as Class III directors."
"THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT... [etc.]"

Read it again. Or maybe actually read it for the first time.

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By GenoS on 04/23/2018 2:06 PM

Posted By RichardP13 on 04/23/2018 1:34 PM
The sample you attached does not ask for a specific vote on a specific candidate or a specific proposal, but merely voting instructions.

I didn't read all or didn't click through all the pages, but are you implying that this bank and the HOA are similar? I hope to god the answer is no.

DouglasM6 (Arizona)
Posts: 724

Posted:

Our Lawyer told us that it would be a Bad thing if the BOD ever appeared to be soliciting votes for a specific outcome. We were told we could take extra steps to make sure that all the residents had the opportunity to vote, but that if were doing so because we knew they were voting a certain way, it would not be proper.

Either way, Bill, the damage is done. If it doesn't pass, what are going to do? If it were the other way around, where you wanted it to fail, and they passed it, you might be able to get an injunction to stop it.

Beat feet on the street and let your opinions be known to all. Great advice was given earlier. Carry proxies that allow the resident to vote right then and there.

AugustinD
Posts: 5,144

Posted:

Richard, Geno and Douglas, I want to get the reasoning straight here, at least in my own mind.

Is the reason that city, county, state and federal elections prohibit campaigning for a particular side (or candidate) when a ballot is given to the voter because the issue must be voted per the will of the electorate, and using governmental resources to campaign for one side or another is not a legally authorized expenditure?

Publicly traded companies like Pepsi Company, AT&T, and Ingersoll-Rand do state what the Board recommends (e.g. a no vote for xyx proposal made by shareholder Jane Doe) when a ballot is sent to shareholders. These are all corporations, but they are also for-profit corporations. I imagine the governing documents for these corporations permit the board to campaign via mailings with ballots.

A HOA is usually legally a non-profit corporation. It seems to me that the parallel to draw here is with city, county, state, and federal elections, as they too are non-profit. Hence Douglas's HOA's attorney advised the HOA not to campaign for a particular side because doing so is not a legal use of HOA resources (except by the most extreme rationalizing?)? Or why does Douglas's HOA's attorney (and I bet many HOA attorneys) advise this?

My HOA's Board wants to re-write its CC&Rs. This Board is corrupt and will use HOA resources to campaign for approving the re-write (technically an amendment). I am curious about whether the Board can be challenged legally for doing so.

RichardP13 (California)
Posts: 3,868

Posted:

In California, that ballot would not fly as opposing sides MUST be given the same opportunity and resources as another, whether it be the ballot letter sent using association funds, websites and emails sent using a domain server or email list derived from the HOA.

In California, certain aspects of HOA elections must be done as they would in be in local, state or county elections, remembering that counties are in charge of elections.

AugustinD
Posts: 5,144

Posted:

Richard, I see your statements reflect the Davis-Stirling statute. California case law on this topic (of using HOA resources to tilt an election in favor of one position or candidate) seems clear and is consistent with your statements, of course. Florida has statutes similar to California's on this subject.

I wish I could find more case law on the subject nationwide. So far, I have not turned up anything outside of California and Florida. Though of course perhaps a court in other states would say it's expropriation yada for a board to use HOA resources to favor one position (their side) in an election contest. If anyone knows of state case law outside California and Florida on this subject, I would be interested to read it.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

I can only speak for SC. What the BOD did will probably fly in SC as SC leans heavily toward business owners, corporations, etc. versus the rights of the individual worker, share holder etc.

The OP caused me to look for Amendment By Members and while I did not find such, there is no reference to who can make an amendment although ours have been made by the BOD.

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By JohnC46 on 04/24/2018 9:10 AM
I can only speak for SC. What the BOD did will probably fly in SC as SC leans heavily toward business owners, corporations, etc. versus the rights of the individual worker, share holder etc.

The OP caused me to look for Amendment By Members and while I did not find such, there is no reference to who can make an amendment although ours have been made by the BOD.

I believe owners can make amendments through the special meeting process, as long as election procedures for that specific HOA or state are followed.

DouglasM6 (Arizona)
Posts: 724

Posted:

Quote:

Posted By AugustinD on 04/23/2018 5:30 PM
Richard, Geno and Douglas, I want to get the reasoning straight here, at least in my own mind.

Is the reason that city, county, state and federal elections prohibit campaigning for a particular side (or candidate) when a ballot is given to the voter because the issue must be voted per the will of the electorate, and using governmental resources to campaign for one side or another is not a legally authorized expenditure?

Publicly traded companies like Pepsi Company, AT&T, and Ingersoll-Rand do state what the Board recommends (e.g. a no vote for xyx proposal made by shareholder Jane Doe) when a ballot is sent to shareholders. These are all corporations, but they are also for-profit corporations. I imagine the governing documents for these corporations permit the board to campaign via mailings with ballots.

A HOA is usually legally a non-profit corporation. It seems to me that the parallel to draw here is with city, county, state, and federal elections, as they too are non-profit. Hence Douglas's HOA's attorney advised the HOA not to campaign for a particular side because doing so is not a legal use of HOA resources (except by the most extreme rationalizing?)? Or why does Douglas's HOA's attorney (and I bet many HOA attorneys) advise this?

My HOA's Board wants to re-write its CC&Rs. This Board is corrupt and will use HOA resources to campaign for approving the re-write (technically an amendment). I am curious about whether the Board can be challenged legally for doing so.

I'm not going to be much help on this. I'm not sure the lawyer was saying that it would be illegal or simply that it would not look good in court if there was a legal challenge. I've never thought to consider an HOA vote with the same considerations as the city, county, etc. elections. But I can certainly see your point.

Now I find myself trying to recall if the Governor has ever spoke for or against a certain legislation. Politicians in the house and senate do it all the time. So, I guess if the BOD of an HOA can be considered politicians, it could fly.

Thing to remember, just as Trump did, there is always a fair amount of apathy in the voters. if you go dig them up and get their votes/support, you can move mountains.

DouglasM6 (Arizona)
Posts: 724

Posted:

Quote:

Posted By AugustinD on 04/24/2018 7:39 AM
Richard, I see your statements reflect the Davis-Stirling statute. California case law on this topic (of using HOA resources to tilt an election in favor of one position or candidate) seems clear and is consistent with your statements, of course. Florida has statutes similar to California's on this subject.

I wish I could find more case law on the subject nationwide. So far, I have not turned up anything outside of California and Florida. Though of course perhaps a court in other states would say it's expropriation yada for a board to use HOA resources to favor one position (their side) in an election contest. If anyone knows of state case law outside California and Florida on this subject, I would be interested to read it.

The BOD is always going to speak for what they feel is the best for the community. That is a very general statement, of course. It depends on what the vote is about. We recently passed an amendment to allow detached garages. I may be the only one on the board that will actually build one. So I was very careful to not show favoritism. As a matter of fact, when it was announced last year that we had the votes and it passed, I challenged it personally. I won. It did not pass. I put time restraints on the voting so if someone did not get their vote in on time, too bad.

I may or may not be doing it right. But I do what I feel I would want the BOD to do, even if I'm personally against it.

DouglasM6 (Arizona)
Posts: 724

Posted:

You have just as much influence as the BOD when it comes to getting the word out.

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By DouglasM6 on 04/24/2018 10:28 AM

A little off the subject, but you mentioned time restraints on voting. Last week I conducted an election in a community of 97 homes. Quorum was 49 and 48 votes were returned. One vote came in 30 minutes after the deadline, which would have made quorum. They have a provision to adjourn where quorum is then cut in half. Well, the presiding officer made a motion in front of all that attended and the adjournment did not pass. Kinda like Congress, as it didn't get out of committee. One side knew the rules and the other side didn't. One side brought support and the other didn't.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By RichardP13 on 04/24/2018 10:12 AM

I believe owners can make amendments through the special meeting process, as long as election procedures for that specific HOA or state are followed.

Interesting and I would agree/hope as I believe owners should be able to make amendments, even ones a BOD does not agree with.

AugustinD
Posts: 5,144

Posted:

Quote:

Posted By DouglasM6 on 04/24/2018 10:28 AM
The BOD is always going to speak for what they feel is the best for the community. That is a very general statement, of course. It depends on what the vote is about. We recently passed an amendment to allow detached garages. I may be the only one on the board that will actually build one. So I was very careful to not show favoritism. As a matter of fact, when it was announced last year that we had the votes and it passed, I challenged it personally. I won. It did not pass. I put time restraints on the voting so if someone did not get their vote in on time, too bad.

I may or may not be doing it right. But I do what I feel I would want the BOD to do, even if I'm personally against it.

I think there is a difference between speaking at a meeting and using HOA resources, like the mass email system, to promote a board member's position on an election. California's Davis-Stirling law says that equal access to HOA resources must be offered all sides. Where I am, Members can get a copy of the contact list for all members (including email addies). But it is a few hundred members, and emailing them all such that the email does not land in spam has to be one email address at a time.

Hopefully this proposed massive re-write of my HOA's CC&R's fails. It's a two-thirds vote required to amend. It will change terms of office to two or more years, among many other things designed to keep the ruling junta in power.

I appreciate your sense of ethics, Douglas.

Thanks for the input, JohnC46 and DouglasM6.

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