Ratifying Unanimous Written Consent

NpB (Arizona)
Posts: 605

Posted:

This past summer, when some of our Board members were not in town (on long vacations or at summer homes) the Board voted via email using unanimous written consent (which is permitted in my state) to authorize some contracts. Per the management company, they recommended those decisions be ratified at the next physical meeting when all Board members are present. Two contracts that were passed via unanimous written consent were the installation of a streetlight within the confines of a unit owners property, to which we received consent of the unit owner, and the trenching for that streetlight. Recently, the adjacent neighbor next to where the streetlight is to be installed, upon seeing the utility locator marks, became irate and threw a temper tantrum at one of the Board members, objecting to the streetlight.

If this neighbor/homeowner is present at the next Board meeting and throws a temper tantrum when the Board is ratifying the contracts and his temper tantrum gives some Board members second thoughts about proceeding with the streetlight, can those contract(s) that have already been unanimously approved via unanimous written consent and signed (streetlight pole has been ordered, etc.) be undone by the Board? The contract with the power company indicates that upon termination, the Board has to pay any monthly fees for any time on the contract (in this case 10 years of monthly fees).

One other contract voted on via unanimous written consent was for tree trimming, for which services have already been rendered and contractor paid. I don't mean to be facetious, but in keeping with the theme of this topic, can that contract be undone as well?

Just want to be prepared for any surprises.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

It's called MAJORITY vote in a HOA. If it benefits the majority for these projects, then they get done. The Board works for the MAJORITY or the WHOLE of the HOA. It doesn't need to bow down to 1 person tantrum. It bows down to multiple people with the same tantrum.

What is this person going to do? Threaten to sue? Not pay their dues? A threat of a lawsuit is no excuse not to go ahead with plans already in the works. I tell everyone if you want to sue go ahead. Your suing yourself and your neighbors. Plus the court system only makes one whole. What damage has been produced that the HOA has to pay for on their behalf?

It's called living in a HOA. This person may scream all they want. If they don't have a point, then thank them for their time for presenting their side. However, the decision has been made and it's going ahead.

Former HOA President

NpB (Arizona)
Posts: 605

Posted:

I agree 100% with your comments. A lot of people, including Board members, can be swayed by emotion, a temper tantrum and threats of a lawsuit. I was just wondering if a contract was approved by unanimous written consent and then already signed, parts ordered, etc., can a Board change their mind during the ratification process and undo a decision (in this case a contract) or is the ratification just a formality?

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Sounds like just a formality. Not even sure why the MC is telling you it has to be done. I'd check into that. It's the board decision after all.

Had plenty of projects someone would throw a fit. Respectfully listen but doing the project anyways. I never listened to someone threatening a lawsuit. Not going to be held as an emotional hostage.

Former HOA President

SueW6 (Michigan)
Posts: 814

Posted:

Were homeowners within 300 ft of this new light notified about the meeting where a motion to put up a streetlight by the HOA would be made? I would hope so since it’s a major impact in this area and that’s pretty much the standard policy for notification of neighbors. An issue like this had no business being passed by email since it involves spending $$ and impacting the neighborhood. .

Motions can be rescinded with a 2/3 vote of the board. However, if has already started by contractors, it’s too late. To stop the work will cost $$.

KerryL1 (California)
Posts: 14,550

Posted:

How can there be "unanimous" written consent where some directors Did not vote? That does not fit the definition of unanimous.

The contracts should not have been signed nor the work begun until there actual WAS animus written consent, imo.

NpB (Arizona)
Posts: 605

Posted:

Multiple posted Architectural and Landscape Committee and Board meetings where lighting options were on the agenda and discussed were held. Zero homeowners attended those meetings.

Since 50 homeowners are paying for and will receive benefit from the light, even if 1-4 people don't want it, that's still a very small vocal minority. Same principal if a company wanted to install a cell phone tower on vacant land adjacent to a unit owner and despite the FCC indicating that there are no risks to health, one person living next to it doesn't want it, even though 50 people will be receiving monthly/yearly rent from it.

NpB (Arizona)
Posts: 605

Posted:

All directors voted unanimously via email. Hence, unanimous written consent.

NpB (Arizona)
Posts: 605

Posted:

Unanimous Written Consent is a procedure where a HOA Board, without conducting a Board Meeting, may approve of action items so long as all Board Members sign a written consent (E-mail signatures are allowed).

Unanimous written consent is based on a provision of the Arizona Non Profit Corporations Act (A.R.S. §10-3821) or the HOA Bylaws.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By NpB on 10/04/2019 7:43 AM
Unanimous Written Consent is a procedure where a HOA Board, without conducting a Board Meeting, may approve of action items so long as all Board Members sign a written consent (E-mail signatures are allowed).

Unanimous written consent is based on a provision of the Arizona Non Profit Corporations Act (A.R.S. §10-3821) or the HOA Bylaws.

If it is as you say above, it is a done deal. You are letting one owner scare you. In order to stop/cancel the work a motion to do so, along with a second must be presented to the BOD to vote on. If it gets as far as a BOD vote, do you think it will pass?

PaulJ6
Posts: 990

Posted:

Quote:

Posted By NpB on 10/03/2019 6:29 PM
This past summer, when some of our Board members were not in town (on long vacations or at summer homes) the Board voted via email using unanimous written consent (which is permitted in my state) to authorize some contracts. Per the management company, they recommended those decisions be ratified at the next physical meeting when all Board members are present. Two contracts that were passed via unanimous written consent were the installation of a streetlight within the confines of a unit owners property, to which we received consent of the unit owner, and the trenching for that streetlight. Recently, the adjacent neighbor next to where the streetlight is to be installed, upon seeing the utility locator marks, became irate and threw a temper tantrum at one of the Board members, objecting to the streetlight.

If this neighbor/homeowner is present at the next Board meeting and throws a temper tantrum when the Board is ratifying the contracts and his temper tantrum gives some Board members second thoughts about proceeding with the streetlight, can those contract(s) that have already been unanimously approved via unanimous written consent and signed (streetlight pole has been ordered, etc.) be undone by the Board? The contract with the power company indicates that upon termination, the Board has to pay any monthly fees for any time on the contract (in this case 10 years of monthly fees).

One other contract voted on via unanimous written consent was for tree trimming, for which services have already been rendered and contractor paid. I don't mean to be facetious, but in keeping with the theme of this topic, can that contract be undone as well?

Just want to be prepared for any surprises.

Is unanimous written consent BY EMAIL permitted in your state?

If so, then the approval is valid and does not need to be ratified.

Now if the board declines to ratify the contracts, the prior approval is valid unless the board affirmatively rescinds its prior approval.

If the board rescinds its prior approval, then the contract is still in effect, but unauthorized, unless the board votes to terminate it and the contract is terminated in accordance with its terms (such as by sending a notice of termination).

If the contract is in effect but unauthorized, and not terminated, then it's unclear. Perhaps the HOA's representations in the contract about it being validly authorized (if those representations are in there) would be incorrect if made now, but those representations would have been correct when the contract was signed.

Bottom line: if the unanimous written consent BY EMAIL was valid, then leave it alone. If the board now wants to terminate the contract, it needs to do so in accordance with the terms of the contract--otherwise it could be facing a lawsuit for breach of contract.

The board can't unilaterally "undo" a contract, and rescission of a prior approval, or failure to ratify a valid consent, doesn't "undo" the contract. The only way to "undo" a contract is to follow the termination provisions in the contract.

PaulJ6
Posts: 990

Posted:

Also, to add:

If the board wants to undo a contract, it would have to vote to terminate the contract. Then the HOA would have to follow the termination provisions that are in the contract- such as sending 30 days' notice.

If the contract has already been fully performed, then it perhaps could still be terminated, but the HOA couldn't, for example, get its money back without the other party agreeing to do so.

KerryL1 (California)
Posts: 14,550

Posted:

Sorry, JB, I missed your post. Looks great.

PaulJ6
Posts: 990

Posted:

Quote:

Posted By NpB on 10/04/2019 7:43 AM
Unanimous Written Consent is a procedure where a HOA Board, without conducting a Board Meeting, may approve of action items so long as all Board Members sign a written consent (E-mail signatures are allowed).

Unanimous written consent is based on a provision of the Arizona Non Profit Corporations Act (A.R.S. §10-3821) or the HOA Bylaws.

There are 2 types of email signatures:

1. Sending an email such as "This is OK, signed, John Doe."
2. Sending a signature through DocuSign or another program.

Which was done? Is it allowed? Allowing 2 is common; allowing 1 is not common.

NpB (Arizona)
Posts: 605

Posted:

Quote:

Posted By PaulJ6 on 10/04/2019 1:10 PM

Posted By NpB on 10/04/2019 7:43 AM
Unanimous Written Consent is a procedure where a HOA Board, without conducting a Board Meeting, may approve of action items so long as all Board Members sign a written consent (E-mail signatures are allowed).

Unanimous written consent is based on a provision of the Arizona Non Profit Corporations Act (A.R.S. §10-3821) or the HOA Bylaws.

There are 2 types of email signatures:

1. Sending an email such as "This is OK, signed, John Doe."
2. Sending a signature through DocuSign or another program.

Which was done? Is it allowed? Allowing 2 is common; allowing 1 is not common.

Number 1 was done and from my reading is very common.

NpB (Arizona)
Posts: 605

Posted:

Quote:

Posted By JohnC46 on 10/04/2019 10:17 AM

Posted By NpB on 10/04/2019 7:43 AM
Unanimous Written Consent is a procedure where a HOA Board, without conducting a Board Meeting, may approve of action items so long as all Board Members sign a written consent (E-mail signatures are allowed).

Unanimous written consent is based on a provision of the Arizona Non Profit Corporations Act (A.R.S. §10-3821) or the HOA Bylaws.

If it is as you say above, it is a done deal. You are letting one owner scare you. In order to stop/cancel the work a motion to do so, along with a second must be presented to the BOD to vote on. If it gets as far as a BOD vote, do you think it will pass?

The Board has already unanimously voted, via unanimous written consent, to approve the installation of the streetlight and the trenching for it. The only way I see a reversal is if the majority of Board members are somehow persuaded by a temper tantrum.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By NpB on 10/04/2019 1:48 PM

Posted By JohnC46 on 10/04/2019 10:17 AM

Posted By NpB on 10/04/2019 7:43 AM
Unanimous Written Consent is a procedure where a HOA Board, without conducting a Board Meeting, may approve of action items so long as all Board Members sign a written consent (E-mail signatures are allowed).

Unanimous written consent is based on a provision of the Arizona Non Profit Corporations Act (A.R.S. §10-3821) or the HOA Bylaws.

If it is as you say above, it is a done deal. You are letting one owner scare you. In order to stop/cancel the work a motion to do so, along with a second must be presented to the BOD to vote on. If it gets as far as a BOD vote, do you think it will pass?

The Board has already unanimously voted, via unanimous written consent, to approve the installation of the streetlight and the trenching for it. The only way I see a reversal is if the majority of Board members are somehow persuaded by a temper tantrum.

Others have described the potential consequences of a contractual breach, so I won't add to it.

But I do have a question - Have you considered installing shielding on the new streetlight so it has a softer illumination on the objecting homeowner's house?

Sikubali jukumu. Read all posts at your own risk.

PaulJ6
Posts: 990

Posted:

Quote:

Posted By NpB on 10/04/2019 1:45 PM

Posted By PaulJ6 on 10/04/2019 1:10 PM

Posted By NpB on 10/04/2019 7:43 AM
Unanimous Written Consent is a procedure where a HOA Board, without conducting a Board Meeting, may approve of action items so long as all Board Members sign a written consent (E-mail signatures are allowed).

Unanimous written consent is based on a provision of the Arizona Non Profit Corporations Act (A.R.S. §10-3821) or the HOA Bylaws.

There are 2 types of email signatures:

1. Sending an email such as "This is OK, signed, John Doe."
2. Sending a signature through DocuSign or another program.

Which was done? Is it allowed? Allowing 2 is common; allowing 1 is not common.

Number 1 was done and from my reading is very common.

It may be common for HOAs. It would be hard to say that the board did not authorize the agreements, even if that type of approval isn't "100% proper" under state law. So for purposes of seeing the authorization was valid, I'd say so. No need to re-authorize or ratify.

NpB (Arizona)
Posts: 605

Posted:

Quote:

Posted By NpS on 10/04/2019 2:24 PM

Posted By NpB on 10/04/2019 1:48 PM

Posted By JohnC46 on 10/04/2019 10:17 AM

Posted By NpB on 10/04/2019 7:43 AM
Unanimous Written Consent is a procedure where a HOA Board, without conducting a Board Meeting, may approve of action items so long as all Board Members sign a written consent (E-mail signatures are allowed).

Unanimous written consent is based on a provision of the Arizona Non Profit Corporations Act (A.R.S. §10-3821) or the HOA Bylaws.

If it is as you say above, it is a done deal. You are letting one owner scare you. In order to stop/cancel the work a motion to do so, along with a second must be presented to the BOD to vote on. If it gets as far as a BOD vote, do you think it will pass?

The Board has already unanimously voted, via unanimous written consent, to approve the installation of the streetlight and the trenching for it. The only way I see a reversal is if the majority of Board members are somehow persuaded by a temper tantrum.

Others have described the potential consequences of a contractual breach, so I won't add to it.

But I do have a question - Have you considered installing shielding on the new streetlight so it has a softer illumination on the objecting homeowner's house?

false

Streetlight will have shielding. Homeowner still adamantly against. The only place for the streetlight is between the complainant homeowner's property and the adjacent neighbor since that is where transformer is located. Any other location in vicinity is either cost prohibitive or unfeasable geographically. Area has remained dark for decades since previous Boards were in this homeowner's ear figuratively and was successful at stopping previous attempts for a streetlight, even though most owners in area and past Boards agreed the area needs lighting. Different Board now who complainant has no influence on votes unanimously to approve streetlight. Only feasable option is streetlight at that location next to complainants house. Any other lighting option, bollards, etc, not feasable.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By NpB on 10/04/2019 3:20 PM
Streetlight will have shielding. Homeowner still adamantly against. The only place for the streetlight is between the complainant homeowner's property and the adjacent neighbor since that is where transformer is located. Any other location in vicinity is either cost prohibitive or unfeasable geographically. Area has remained dark for decades since previous Boards were in this homeowner's ear figuratively and was successful at stopping previous attempts for a streetlight, even though most owners in area and past Boards agreed the area needs lighting. Different Board now who complainant has no influence on votes unanimously to approve streetlight. Only feasable option is streetlight at that location next to complainants house. Any other lighting option, bollards, etc, not feasable.

Obviously, you thought through the various options and reached a decision. Go with it. Best of luck.

Sikubali jukumu. Read all posts at your own risk.