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Action by Owners Without a Meeting

Started by JeffB19 • 29 replies • 1203 views

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JeffB19 (Florida)
Posts: 7
Posted:
Our Florida HOA Bylaws include a provision that permits the owners/members of the association to take action without a meeting, provided the prescribed formalities of notice and consent are followed. But under the Florida HOA statute, there is no provision for owners taking action outside of an annual or special meeting at which a quorum is present.

Does anyone here know whether such a provision is legal under FL law?
SheliaH (Indiana)
Posts: 6,964
Posted:
For answers to legal questions, your best bet is to contact a private attorney (unless you're on the board, in which case, you should consult the association attorney). That statute may or may not apply - from what I've seen around this website, it appears Florida has a set of rules for condos and another for HOAs, which I guess are the single-family, detached homes variety. There's also the matter of effective dates - in some cases, the statute or portions may apply to all HOAs or HOAs created after a certain date. So you may want to read the sections preceding that portion to see where your community stands.

All of that said if your Bylaws allow this provided there was proper notice and consent before the owners decide to do whatever, why wouldn't you want to do that anyway? And how many owners are we talking about to pull this off - a specific percentage or 100%? Are there specific rules as to how the notices should be sent and consent obtained? Seems to me you have more research to do.
If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
MarkW18
Posts: 1,290
Posted:
There should be a provision under Corporation statues.
JeffB19 (Florida)
Posts: 7
Posted:
The Florida Homeowners Association Act most certainly does apply.

I well understand the relevant rules in our HOA Articles and Bylaws on calling and notice of an Owners Action Without a Meeting. The question is whether such an action is permitted under the FL HOA Act. The relevant statute neither provides nor prohibits such an action. I was hoping a FL property lawyer might be on this board and be willing to opine on whether there is applicable case law on the point.

Yes, I could trigger the process anyway. But it would be reckless to do if the resulting decision would be open to legal challenge because an Owners Action Without a Meeting is invalid under FL law, with the losing party being responsible for attorney's fees.
SheliaH (Indiana)
Posts: 6,964
Posted:
All the more reason you need to talk to your OWN attorney to see what your options are – getting legal advice via the internet is never a good idea. But what exactly are you wanting to do anyway?

For example, if you’re looking to recall the board, why not check your documents to see what the procedure is? If there isn’t anything addressing recalls, I would think the documents do address calling a special homeowner’s meeting. If the board squawks at having one (because they know they’re likely to be sacked), THEN you can look into this owner action without a meeting.
If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
CathyA3 (Ohio)
Posts: 6,299
Posted:
Also check to see whether there are limitations on this "action without a meeting" - that is, are there things that cannot be handled this way? I would think that anything subject to other laws or legal hoops would be off the table - too likely to do something that could be challenged in court for failure to abide by correct procedures.
AugustinD
Posts: 5,144
Posted:
-- Would you please confirm: Does Florida statute 718 or 720 apply to your HOA?

-- Can you please quote verbatim what your Bylaws say about members taking action without a meeting?

-- What is the nature of the action that you hope the membership can take without a meeting?

-- Is this a membership action that is allowed if a properly noticed meeting is held?

-- I see that, under Florida statute 720.303(10)(b)1, members may recall a director without a meeting. Under Florida statute 720.308(2)(a) also describes a certain action by the members that may be completed without a meeting.
KerryL1 (California)
Posts: 14,550
Posted:
As MarkW suggests, I'd review FL corporations codes--if you're incorporated.
BobB31 (Florida)
Posts: 178
Posted:
There is nothing about actions without meetings (AWM) in the 720 statute which is the one that applies to HOAs (718 is for condos and 719 is for co-ops). Where you will find regulations about AWM is in the 617 (corp not for profit) statute, specifically 617.0821, which discusses actions by directors without meetings. I've never heard of actions by members without a meeting, and have no clue how that would work. AWM by directors requires unanimous consent from the directors, not a majority. If such existed for owners, it seems to follow that it would also require unanimous consent. There aren't many actions that owners/members are allowed to do. A recall is one. I'm hard put to think of another.
Our bylaws allow owners to petition to have an item placed on a board meeting agenda for consideration. But it's the board that decides whether or not to take the action under consideration.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
I typically avoid FL stuff as it can be so confusing. That said, I have never heard of a Members (owners) Action Without a Meeting. A BOD, under the right circumstances, may Take Action Without a Meeting.

When it comes to unanimous consent of all owners, I would consider that an impossible task. No matter how solid a proposed action, some are not going to be for it. The more owners, the more that will be against it.
AugustinD
Posts: 5,144
Posted:
Here's what looks like typical verbiage on the subject from a certain Florida HOA's bylaws:
"Any action required or permitted to be taken at a meeting of the Members may be taken by mail without a meeting if written consents, setting forth the action to be taken, are signed by the Members having not less than the minimum number of votes that would be necessary to take such action at a meeting at which all Members entitled to vote on such action were present and voted. Action by Members without a meeting shall be undertaken in the manner required by
the Not for Profit Corporation Act."

Unless a HOA' Articles of Inc or Bylaws say otherwise, the Florida Not for Profit Corporation Act permits actions by members without a meeting for any action listed in the Not for Profit Corporations Act.
AugustinD
Posts: 5,144
Posted:
Quote:
Posted By BobB31 on 03/10/2020 11:23 AM
There is nothing about actions without meetings (AWM) in the 720 statute...
Not so. See above.
JeffB19 (Florida)
Posts: 7
Posted:
Hi AugustinD,

Chapter 720 applies to our HOA.

The purpose of the AWM of Members would be to amend the Declaration to loosen some of the use restrictions.

There is no provision in our governing documents for an AWM of the Board, but there is such a provision in our Bylaws for an AWM of the Members. The language is substantially similar to the language you quoted.

In Chapter 720 of FL Statutes I see a provision for an action by Members at an Annual Meeting and at a Special Meeting, when a quorum is present. I see no provision for an action without a meeting.

Wondering whether it's ever been addressed in case law. Can't find any, but I'm not a property attorney.
MarkW18
Posts: 1,290
Posted:
Under Florida Corporations 607.0704 Action by shareholders without a meeting.
BobB31 (Florida)
Posts: 178
Posted:
Quote:
Posted By AugustinD on 03/10/2020 11:35 AM
Posted By BobB31 on 03/10/2020 11:23 AM
There is nothing about actions without meetings (AWM) in the 720 statute...
Not so. See above.

I'm still having trouble finding any such verbiage in the 720 statute. However, I now see it in FS 617.0701, pretty much as your HOA Bylaw quote has it.
This still prompts the question as to what actions are allowed. Could we be talking about things like approving amendments of governing docs?
CathyA3 (Ohio)
Posts: 6,299
Posted:
Quote:
Posted By JeffB19 on 03/10/2020 11:52 AM
Hi AugustinD,

Chapter 720 applies to our HOA.

The purpose of the AWM of Members would be to amend the Declaration to loosen some of the use restrictions.

... snipped for brevity ...

Are you talking about conducting the vote to approve amendments to your Declaration that have been properly drafted by an attorney? Or are the members supposed to agree to and draft the amendments themselves? Or something else?

The first of these are likely OK, the rest are asking for trouble. You need a lawyer if you want to amend the Declaration.
JeffB19 (Florida)
Posts: 7
Posted:
That wasn't my question, CathyA3. There is no issue with the drafting.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Am I right in assuming if there can be AWM by the owners then the needed % of all members agreeing to change something would still hold true? If so, unless big trouble in an association I doubt the proper % could be reached via an AWM.
JeffB19 (Florida)
Posts: 7
Posted:
Correct, JohnC46, but the required % in this instance is a bare majority, and there should be no difficulty in obtaining a majority of consents in an AWM.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Quote:
Posted By JeffB19 on 03/10/2020 12:21 PM
Correct, JohnC46, but the required % in this instance is a bare majority, and there should be no difficulty in obtaining a majority of consents in an AWM.

As only needing a majority, can I assume it is a Bylaw change not a Covenant change? Care to say what and also why are you so sure it will pass?

Thanks
JeffB19 (Florida)
Posts: 7
Posted:
It's a covenant change with the support of a majority of the owners.
AugustinD
Posts: 5,144
Posted:
Quote:
Posted By JeffB19 on 03/10/2020 11:52 AM
The purpose of the AWM of Members would be to amend the Declaration to loosen some of the use restrictions.
Amending requires a vote. From FS 720.306(1)(a): "... Unless otherwise provided in this chapter or in the articles of incorporation or bylaws, decisions that require a vote of the members must be made by the concurrence of at least a majority of the voting interests present, in person or by proxy, at a meeting at which a quorum has been attained."

The corporations statute does not have anything relevant to amending a corporate HOA's Declaration.

I think your HOA has to have a meeting. Of course, there is nothing to stop people from voting by proxy and not attending.

Bob, go to http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0720/0720.html . Do a keyword search for the phrase {without a me}. Two instances come up.
AugustinD
Posts: 5,144
Posted:
Oops; post-o. The statute says a HOA's bylaws trump the statute's requirement for a meeting. Hence it appears to me that JeffB19's HOA may vote for this amendment to the covenants without a meeting.
JeffB19 (Florida)
Posts: 7
Posted:
Yep. Our rules for amending the Covenant are slightly different than FS 720 and our Bylaws provide for an Action Without Meeting for any action that may be taken at an annual or special meeting.
GeorgeS21 (Florida)
Posts: 3,808
Posted:
Hmmm ... going to the intent ... if the intent is to pass a change to the CCRs, then just set a meeting date and work with whoever shows up plus proxies or notarized letters, etc. The attorney drawing up the changed doc will know how to structure the approval process.

Likely you CCRs have a percentage for changes? It is usually a super majority - 2/3, etc ... not 50+%?
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Quote:
Posted By GeorgeS21 on 03/10/2020 1:26 PM
Hmmm ... going to the intent ... if the intent is to pass a change to the CCRs, then just set a meeting date and work with whoever shows up plus proxies or notarized letters, etc. The attorney drawing up the changed doc will know how to structure the approval process.

Likely you CCRs have a percentage for changes? It is usually a super majority - 2/3, etc ... not 50+%?
I was curious about this also.
DouglasK1 (Florida)
Posts: 2,046
Posted:
With the assistance of our attorney, we made CCR changes without a meeting. We distributed paper ballots with the option to vote yes or no on each change. Obviously, lack of a vote was a No, each change needed 2/3 affirmative vote of the entire membership. We set a time frame for the ballots to be counted. Getting 2/3 of the members to submit their ballots involving going door to door to the properties that did not return them initially.
Escaped former treasurer and director of a self managed association.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Quote:
Posted By DouglasK1 on 03/10/2020 7:15 PM
With the assistance of our attorney, we made CCR changes without a meeting. We distributed paper ballots with the option to vote yes or no on each change. Obviously, lack of a vote was a No, each change needed 2/3 affirmative vote of the entire membership. We set a time frame for the ballots to be counted. Getting 2/3 of the members to submit their ballots involving going door to door to the properties that did not return them initially.

At one time we were considering an amendment which requires 2/3rds of all owners to approve and we were going to do as you described. Our attorney assured us he could draw up the necessary paperwork and give us 6 months to collect them. In the end, we decided not to change the Covenant.
GenoS (Florida)
Posts: 4,276
Posted:
Quote:
Posted By DouglasK1 on 03/10/2020 7:15 PM
With the assistance of our attorney, we made CCR changes without a meeting. We distributed paper ballots with the option to vote yes or no on each change. Obviously, lack of a vote was a No, each change needed 2/3 affirmative vote of the entire membership. We set a time frame for the ballots to be counted. Getting 2/3 of the members to submit their ballots involving going door to door to the properties that did not return them initially.

That's in the statute already, isn't it?

FS 720.306(1)(b) "... any governing document of an association may be amended by the affirmative vote of two-thirds of the voting interests of the association."

That section says nothing about requiring a meeting to take that vote. The wording in FS 720 regarding a recall petition is similar.

FS 720.303(10)(b) "Board directors may be recalled by an agreement in writing or by written ballot without a membership meeting."

I always assumed a signed petition or agreement in writing of 2/3 of the voting interests would suffice for amending the governing documents, too. Maybe a bad assumption, but who knows?
JohnC46 (South Carolina)
Posts: 14,265
Posted:
I always assumed a signed petition or agreement in writing of 2/3 of the voting interests would suffice for amending the governing documents, too. Maybe a bad assumption, but who knows?

Our lawyer who is a well know HOA lawyer in SC says signed petitions for a Covenant change are just fine but dependent on how worded. As in he could do one for us.

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