Change of Annual Membership Meeting in Florida

Started by GeorgeS21 • 6 replies • 529 views

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GeorgeS21 (Florida)
Posts: 3,808

Posted:

Hi All,

Single family 650 house HOA, almost fully built out, long ago turned over from the developer.

I am on the Finance Committee.

We are going through a turnover from an incompetent management company to a competent management company (I know the competent company well as they manage the other association of which I am a past president and current VP). As part of this turnover, we are reviewing processes for alignment, and ease of management. I had asked, during my first interaction with the president, why our annual meeting was being held in early December. While the president agreed this was a bad time, she noted it had been this way for some time.

Fast forward a couple of months - at Board meeting in July the Board voted to terminate the outgoing MC, and hire the new MC - they also voted unanimously to move the new Board meeting to February, citing all the usual good reasons for having it following the budget year.

Fast forward to this week - several owners have complained about the date change, and have gotten at least one board member to agree with them - that, "it is not legal to change the time period of the meeting - that it must be held in December." One of these owners, also a member of the ARC, sent email to all the Board, and to the association attorney, noting that changing the meeting was not legal. The attorney (a generalist who is also close to termination) provide a weakly worded email opinion, that this could be accurate, and that it should be arbitrated. (I'm going to ignore the impropriety of the ARC fellow including the attorney, and the attorney responding, for now)

Corporation was formed on Jan 5, recorded on Jan 7, previously meetings were held in March. Last seven years meetings held in December.

Following from current Bylaws:

"Section 1. Annual Meetings. The first annual meeting of the members shall be held within one (1) year from the date of incorporation of the ASSOCIATION, and each subsequent regular meeting of the members shall be held on the same day of the same month of each year thereafter, at the hour of 7 o’clock p.m., or on such other date as the Board of Directors may determine. If the day for the annual meeting of the members is a legal holiday, the meeting will be held at the same hour on the first day following which is not a legal holiday.”

Florida statute is silent (I think) on this topic. As long as legal and appropriate notice is given, is there any reason for this to make any sense?

I think the attorney opinion is nonsensical - thoughts?

AugustinD
Posts: 5,144

Posted:

Quote:

Posted By GeorgeS21 on 09/10/2020 6:17 AM

Corporation was formed on Jan 5, recorded on Jan 7, previously meetings were held in March. Last seven years meetings held in December. Following from current Bylaws:

"Section 1. Annual Meetings. The first annual meeting of the members shall be held within one (1) year from the date of incorporation of the ASSOCIATION, and each subsequent regular meeting of the members shall be held on the same day of the same month of each year thereafter, at the hour of 7 o’clock p.m., or on such other date as the Board of Directors may determine. If the day for the annual meeting of the members is a legal holiday, the meeting will be held at the same hour on the first day following which is not a legal holiday.”

-- Other than requiring that there be an "annual meeting," I too feel the Florida non-condo HOA statute FS 720 and the Florida Not for Profit Corporations statute FS 617 are silent on the topic. In particular, the statutes do not have anything about the "annual meeting" having to be held, say, within 12 months of the prior annual meeting.

-- The Bylaw states that the annual meeting shall be held on ___ "or on such other date as the Board of Directors may determine." Period, end of discussion.

-- I think a court would say that, as long as the Board's choice of date is reasonably close to the date of the last annual meeting, the Board may set the date. The last seven years of annual meetings were held in December. I think setting the meeting in February is reasonable, maybe especially given Coronavirus concerns.

-- I agree the HOA attorney is an idiot. Many HOA attorneys like to be cute and say something like what this attorney said. E.g. "The law is what the court says tomorrow." I believe this results in a lot of billable hours.

-- The attorney responding to a non-board query is another reason the attorney should be dismissed.

-- Unfortunately now the Board has this idiot attorney's opinion. There may be a board battle, with any neophytes on the board saying moving the month of the annual meeting may be unlawful. If a majority of directors are fine with moving the meeting to February, then I recommend that the board vote; set the date to February or any date reasonably close to December; and move on to other topics.

GeorgeS21 (Florida)
Posts: 3,808

Posted:

Thanks, Augustin.

The Board will weather this pretty easily, I think - especially given the intent to quickly move to another HOA focused attorney. The one with the nutty response has been counsel for 13 years ... seemed like a side job to him.

I was pretty certain the Board is on solid ground, but I have certainly been wrong before!

CathyA3 (Ohio)
Posts: 6,299

Posted:

I think that requiring an annual meeting to be held on a particular date and a particular time is idiotic - there are things outside of anyone's control that can derail plans (hurricane, anyone?).

I agree that the attorney in question isn't thinking clearly. Since bylaws may be changed, it's pretty clear that they aren't engraved in stone. Arbitration makes no sense since I can't think of any justification for the current provision. And it's arbitrary, which courts tend to frown on when they're looking at enforceability of CC&Rs. No reason that the bylaws shouldn't receive the same common sense approach.

(FWIW, our bylaws state that the annual meeting must be held during the first quarter of the calendar year - other than that, it's up to us.)

SheliaH (Indiana)
Posts: 6,964

Posted:

I think the attorney, this board member, and those homeowners are being nonsensical. I note your documents state “each subsequent regular meeting of the members shall be held on the same day of the same month of each year thereafter, at the hour of 7 o’clock p.m., or on such other date as the Board of Directors may determine. If the day for the annual meeting of the members is a legal holiday, the meeting will be held at the same hour on the first day following which is not a legal holiday.”

This part about “…or on such other date as the Board of Directors may determine" says to me it's fine for the Board to change the date. In this case, it makes sense to move the annual meeting to February because….people are busy in December (Christmas, Hanukkah, Kwanzaa, etc.). You also get more time to draft and send out meeting notices – I suspect your community has to get those out 30 days in advance, like my community. February means your letter won't have to compete for attention from the Christmas cards and presents, and New Year's Day party invites that also get mailed during December.

My community’s bylaws state the meeting has to be in February, but the board picks the actual date. Our fiscal year ends December 31, so a February meeting also gives us an opportunity to present a more complete financial report. Hell, our board wouldn’t even meet in December unless we had time-sensitive Association business to address. That gave us more motivation to get more critical stuff resolved in November, such as next year’s budget, which homeowners must receive by December 1. Who wants to deal with detailed budget conversations in the same month as Veterans Day, Thanksgiving, and sometimes Election Day?

But that’s just us. Maybe you should ask these homeowners why it’s so critical to have the meeting in December, noting other distractions and how they’d respond. Then, I’d have an executive session to deal with the board member – reprimand him and tell him he’ll have to pay the cost of that communique to the attorney (some charge for answering emails), Make sure everyone else understands no one contacts the attorney unless it’s authorized by the Board via a vote during an open board meeting.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

GenoS (Florida)
Posts: 4,276

Posted:

Bearing in mind that I am NOT an attorney, I believe that changing the date of the Annual Meeting is NOT illegal. I base this on the wording in your Bylaws that say "or on such other date as the Board of Directors may determine". That seems to allow the Board significant discretion.

If the disgruntled homeowners are correct then the ONLY way to settle the matter is through a DBPR arbitration petition, and that must be submitted by one or more homeowners AFTER the meeting is held. I'd just wait and see if they do that. The DBPR doesn't arbitrate hypothecical cases (hah) on an advisory basis. "What happens if my Board breaks the law in February?" They're just not going to accept that as a case needing arbitration several months in advance.

Here's one case from 2011 where the Condo's Bylaws said the Annual Meeting had to be on the first Thursday of March. One year they had their meeting several weeks later. That meeting was properly noticed and the only action taken at it was the ratification of the Minutes of the previous Members Meeting and the DBPR refused to order another meeting (there's another dispute in there re. quorum that's not relevant to the date dispute). It did, however, admonish the Board to follow its Bylaws in the future and upheld the idea that their Annual Meetings did need to occur on the 1st Thursday of March every year (unless it's a legal holiday).

On the other hand (there's always another hand), this 2014 DBPR arbitration case suggests that a board should not schedule an Annual Meeting that effectively reduces the terms of Directors from 12 months to 10 months. Then the arbitrator goes on to say that perhaps setting an Annial Meeting date that's 20 days earlier than the previous year would be acceptable while saying the timing, "may be approaching the outer limit for variation in scheduling the annual meeting and election." The definition of "outer limit" is apparently whatever a judge or arbitrator decides in any given case.

When scheduling a meeting where the term of sitting Directors would be lengthened, rather than shortened (you're considering a 14 month term if I understand you correctly), the criteria for what's acceptable would be different, I assume, since the change doesn't "shortchange" the term of any sitting Director. Reasonable is the key and in light of your Bylaws I agree that the attorney isn't very good. Glad to see you're looking for another.

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