annaul meeting help

Started by LaskaS • 30 replies • 384 views

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LaskaS (Texas)
Posts: 1,025

Posted:

hi, I hope some of the regulars are around today.

what a disaster.
The annual meeting was held tonight. As expected the quorum requirements were not met, so no election occurred. The election was adjourned until the next board meeting.

Approx 15 owners showed up in person. Approx 11 owners who don't live locally called into zoom.

Not a single board member showed up to the annual meeting in person.
Two board members live out of state.
5 board members live very close by. Not a single one showed up.
2 board members actually live here on property. Neither of them bothered to show up in person.

This annual election is the first contested election since right after harvey.

When the property manager verified that there was not a quorum of owners present byu proxy or in person, the board members who were on zoom adjourned the meeting.

Despite being told by the property manager(remember he's a board member who has taken over the office manager position until a replacement can be found) ( However. there is no search for a replacement being done) that the year end financials and analysis would be available at the annual meeting. Nothing was nothing was available.
The property manager literally showed up, verified there wasn't a quorum and then adjourned the meeting.

I realize that a quorum wasn't met, so no election could occur. But what about the rest of the meeting agenda items.??

Certain board members are grasping at straws trying to prevent fair, open elections in accordance with our documents.
The managing agent (not property manager) whose company is paid to handle accounting and books has repeatedly steered the board towards decisions that benefit his company. He uses his 30 years of experience managing properties as a tool to manipulate board members who have never taken the time to actually read out documents.

My question is, isn't the annual meeting for more than just the annual election? Can an annual meeting occur without taking any votes.?

MelissaP1 (Alabama)
Posts: 13,836

Posted:

How? There was no quorum to conduct business? Could talk all you like but nothing could happen if no one was there to make it official.

Former HOA President

LaskaS (Texas)
Posts: 1,025

Posted:

specifically, making the end of year financial package available to owners present. This is one of the things that has always occurred at the annaul meeting. In years past, i just go pick up the packet and review it on my own.

This year, nothing was printed and available for owners .

what I'm asking for clarity on is

If the annual meeting is adjourned because of lack of quorum, do all of the agenda items slated for the annual meeting also get adjourned. or does only the annual election get adjourned and the board will not have to handle the scheduled agenda items that were on today's agenda.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

So this is all about how you did not get to pick up a financial package for all your witch hunting for the rest of the year?

The more you post the more it sounds like your HOA is actually getting it's act together than apart.

Former HOA President

SheliaH (Indiana)
Posts: 6,964

Posted:

I have to say Melissa has a point - every time you post, you have an issue with your property manager or the board (usually both). I'm not saying you shouldn't point things out, but I really think things have escalated in your community where no one wants to listen to you anymore because you're never satisfied. How you proceed from this point is up to you, but at this point, I'd suggest you get a few neighbors to bring up issues because when you stand up, I can almost hear the board rolling their eyes and sighing heavily.

My association was to have theirs last night, but we were two people shy of the quota. The board could have sent everyone home, but because nothing official would have happened anyway, they went ahead and discussed some of the agenda items, particularly the reserve study commissioned last year. Our property manager bought her laptop so the reserve study specialist could make a presentation and answer questions. Bottom line: our reserves are in HORRIBLE shape, we have roof replacement on the horizon that will cost a ton of money, our CCRs hamstring the board's ability to increase assessments because it's limited to a maximum of 5% over current year's fees without homeowner approval, but everyone knows the homeowners will never vote for any increase beyond that.

Since there was no quorum, the board members stay on for another year, but our proxies are good for six months, so if a few trickle in during that time, the board will reschedule. Otherwise, the four homeowners who were there (including moi) discussed things in general, then we left and the board continued with the regular board meeting.

Your board could have gone ahead and discussed the agenda items if they wanted to, but because there wasn't a quorum anyway with which to make decisions they decided not to. If the meeting gets rescheduled in the next six months, I suspect there will be a little more to discuss because other things will have happened since we're in a new year. And that's ok (of course, you'd probably find something to complain about anyway).

If the package is still available, you could ask for a copy and ask questions if you like

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

HenryS7 (Pennsylvania)
Posts: 336

Posted:

I believe the proper procedure, when quorum is not met, is to adjourn the meeting. I believe that the motion to adjourn the meeting is the only motion that can be made without having a quorum present.

I am pretty sure you know that anyone in the community can collect proxies, not just the Board. Why didn't you run around and collect enough proxies that the Association could have made quorum at the meeting? Then business would have to be conducted.

CathyA3 (Ohio)
Posts: 6,299

Posted:

Yeah, once there's no quorum, no business of any sort can be conducted. If homeowners want to sit around and shoot the breeze, they can do so - but that's all it will amount to.

BillH10 (Texas)
Posts: 1,217

Posted:

Laska

Do your Bylaws or Declaration specify an owner may request a review or copies of Association documents?

If so, make a request to review, or for a copy of, the EOY Financial Documents. Frankly, the December Balance Sheet and Total Year P&L statement, which is usually the December report, should tell you most of what you need to know about the financial state of the Association. I would support a request for summary information regarding past due account balances and where each delinquent account is in the collection process.

TPC Chapters 81 and 82 may also contain language regarding access to association records. I don't know the requirements of either on this subject as all our client documents have language requiring access to association records and the ability to request copies.

To answer your main question, if there is no quorum, the meeting may not be called to order. If it cannot be called to order, the balance of the agenda items are immaterial. The primary purpose of the Annual Meeting of the Association is to elect officers. Your Bylaws likely stipulate the items which are to appear on the agenda of the annual meeting.

However, like SheliaH, I have seen the Board discuss agenda items which did not require a vote with those present when a quorum was not attained--sort of a 'town hall' meeting.

AugustinD
Posts: 3,698

Posted:

Ditto HenryS7's, CathyA3's and BillD16's posts.

No quorum = no association business to be conducted.

LaskaS, I understand that you personally do not like how the COA is run. But all the evidence is that there are not enough owners who feel as you do to cause change. When owners do not even vote in an election, that is contested, the owners are in fact making a statement. What are they saying? They're saying they are fine with the status quo. To be effective, I think the only course of action that is meaningful for you to take is to look forward and consider what you can do to get a quorum for the next membership meeting.

AugustinD
Posts: 3,698

Posted:

Quote:

Posted By AugustinD on 02/17/2022 8:15 AM
Ditto HenryS7's, CathyA3's and BillD16's posts.

Post-o. I meant BillH10.

AugustinD
Posts: 3,698

Posted:

Quote:

Posted By SheliaH on 02/17/2022 5:05 AM

My association was to have theirs last night, but we were two people shy of the quota. The board could have sent everyone home, but because nothing official would have happened anyway, they went ahead and discussed some of the agenda items, particularly the reserve study commissioned last year. Our property manager bought her laptop so the reserve study specialist could make a presentation and answer questions. Bottom line: our reserves are in HORRIBLE shape, we have roof replacement on the horizon that will cost a ton of money, our CCRs hamstring the board's ability to increase assessments because it's limited to a maximum of 5% over current year's fees without homeowner approval, but everyone knows the homeowners will never vote for any increase beyond that.

I am curious: Was the assessment raised as much as possible without a vote of owners?

Reserve study companies are not wild about using the "percent funded" figure as a metric, for reasons I can only guess at. But can you say a bit more about how it is clear the reserve fund is in horrible shape? E.g. did the reserve company say the HOA needs increases in its assessments that are more than 5% a year for the next several years?

What kind of amenities do you all have? About how much are the monthly dues per home?

Just asking for anecdotal reasons. You know: Put the info up on a shelf. Take it down when one needs it.

CathyA3 (Ohio)
Posts: 6,299

Posted:

Quote:

Posted By AugustinD on 02/17/2022 8:21 AM

... snip...

Reserve study companies are not wild about using the "percent funded" figure as a metric, for reasons I can only guess at. ... snip ...

My two cents' worth:

It can be comforting to know that you could replace everything immediately if a tornado levels the community and you're 100% funded. But among other things, this doesn't take into account a few things:

* The project reserve funding is an educated guess at best, and some/many assumptions will almost surely be wrong. The recent upsurge in housing prices and inflation mean that fairly recent studies are significantly off.

* It doesn't take into account any insurance proceeds if some components get replaced early because of accidents.

* It doesn't take into account that, barring a disaster, you won't need all the money immediately. Instead you'll need it some time in the future, sometimes many years into the future (our reserve studies project out 30 years).

* Given the extremely low return on invested dollars, it makes even less sense to accumulate funds too far in advance of need.

The only reason I can see for aiming for 100% funded is that many boards are overly optimistic about funding in general, so it's best to err on the side of caution.

Bottom line: it's not a great tool, but there probably aren't any better ones other than a functioning crystal ball or time-travel machine.

AugustinD
Posts: 3,698

Posted:

CathyA3, I buy all the reasons you gave, especially for not, say, telling a HOA/COA that it is 100% funded (for the moment), so all is well.

But when a HOA/COA has a percent funded figure that is less than 50%, I think this is darn telling.

Five will get a person ten?

As long as a COA/HOA is looking at what assessment increases the reserve study company is recommending for the next few years, and checking to see that the "remaining useful life" and "cost to replace" figures seem reasonable (or are adjusted per the Board's request), then the COA/HOA will have the information it needs to decide what increases it wants to try to implement.

I can't believe HOA/COA directors are not paid. (The latter is rhetorical.)

CathyA3 (Ohio)
Posts: 6,299

Posted:

Quote:

Posted By AugustinD on 02/17/2022 8:57 AM
CathyA3, I buy all the reasons you gave, especially for not, say, telling a HOA/COA that it is 100% funded (for the moment), so all is well.

But when a HOA/COA has a percent funded figure that is less than 50%, I think this is darn telling.

Five will get a person ten?

As long as a COA/HOA is looking at what assessment increases the reserve study company is recommending for the next few years, and checking to see that the "remaining useful life" and "cost to replace" figures seem reasonable (or are adjusted per the Board's request), then the COA/HOA will have the information it needs to decide what increases it wants to try to implement.

I can't believe HOA/COA directors are not paid. (The latter is rhetorical.)

Oh I agree, more is better when it comes to percent funded, and less than 50% is worrisome.

I guess the real problem is that many people aren't skilled at thinking about money or about the future, especially a future that they personally will probably not have to deal with. That's a tough thing to overcome.

(So many of the problems we humans have seem to boil down to needing better quality humans.)

AdamL1 (UnitedStates)
Posts: 559

Posted:

to piggy back on this....I'm found over the last 10-15 years of annual meeting minutes that often Quorum is not met, yet they continued to do the whole meeting agenda....reports of officers, votes for board, present finances, vote on resolutions, etc.

Let bygones be bygones? or use this to challenge legitimacy of several issues?

AugustinD
Posts: 3,698

Posted:

Quote:

Posted By AdamL1 on 02/17/2022 10:33 AM
to piggy back on this....I'm found over the last 10-15 years of annual meeting minutes that often Quorum is not met, yet they continued to do the whole meeting agenda....reports of officers, votes for board, present finances, vote on resolutions, etc.

Let bygones be bygones? or use this to challenge legitimacy of several issues?

First, is the current Board discussing any of these issues? To review: On account of not having a quorum and probably for other reasons, these "resolutions" have no legal validity. Unless something arises in the future that relies on these "resolutions," I would let it go. I grant that, if I were in your shoes, I would find this difficult. I would try to remember that no one gives a darn about my personal beefs, and that I am obliged to act in the best interests of the corporation as a whole and focus on actual needs of the HOA.

Second, regarding directors who are not elected, I think this should be let go. Why? Because when quorum is not met, Idaho law likely says the incumbent directors continue. (You should confirm this.) Per Idaho statute and possibly the Bylaws, if any incumbent steps down, the Board has the right to replace him or her by appointment of the Board. (Confirm this as well.) In short and IMO, there just are not good reasons to question whether certain directors were lawfully seated on the Board.

SheliaH (Indiana)
Posts: 6,964

Posted:

Quote:

Posted By AugustinD on 02/17/2022 8:21 AM

Well, let's see. I won't say what the current funding percentage is, but we're a LONG, LONG way from 100%. We're not at 50% either, and as you know, most numbers under that aren't good. In fact, the specialist said in order to jack up the fund to where it should be, we'd need a combination of assessment increases, special assessments and maybe a loan. And we still might be behind.

We're a townhouse community and for starters, we have roofs, siding (we did complete replacing everything with vinyl from aluminum), the clubhouse, parking lots, streets, sidewalks, and a border fence (also vinyl - replaced a fatty iron fence about 8 years ago). Assessments are $173 a month, and our treasurer (also a realtor) said that's on the low end of HOAs in the area, which are over $230 on average.

I suggested that the board post the handouts on the community website with a summary of the specialist comments so they will understand why assessments will be riding at the 5% and every year for the foreseeable future and maybe consider talking to their insurance companies about getting loss assessment coverage to help pay for a hefty special assessment because I'm not sure there will be any way around it. The community is now 50 years old and things are having quickly (much !like most of us over 50 are noticing we have to pay more attention to our bodies because stuff is breaking down!)

I don't know what will happen next, but if anyone is in this situation, I'd say it's time to be candid about what's at stake. No one wants to pay high fees, but when you own a home, you have to account for wear and tear - The maintenance costs from 3 or 5 years ago aren't The same as in 2022. In addition to The costs, the community may need to make hard decisions about what association can pay for and consider if some things should be turned over to the homeowners via CCR amendments

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

AugustinD
Posts: 3,698

Posted:

SheliaH, thank you for the elaboration. Because the HOA has significant infrastructure responsibility (roofs et cetera) and FWIW, I agree this is a tough situation. Worse, and as is noted here often, owners are not going to "get it" unless the board is talented at communications, including repeating and repeating again, until such time as a majority of owners can actually spell and define "reserve study."

BenA2 (Texas)
Posts: 1,273

Posted:

The only thing you cannot do without a quorum, by law, is make decisions that require a vote. So, you can have the meeting without a quorum. There is no reason why information cannot be passed along.

One thing I would not worry about is members who "do not bother" showing up in person. If you make attendance by Zoom an option, it does not matter whether they attend in person or by Zoom. I hope your HOA is counting the Zoom attendees as present for a quorum. Unless your governing documents state otherwise, they should be counted.

HenryS7 (Pennsylvania)
Posts: 336

Posted:

Quote:

Posted By BenA2 on 02/17/2022 11:06 AM
The only thing you cannot do without a quorum, by law, is make decisions that require a vote. So, you can have the meeting without a quorum. There is no reason why information cannot be passed along.

However, there is no legal requirement to pass information along and hold a meeting that has not met quorum requirements. It's perfectly fine to adjourn the meeting and schedule for another time.

LaskaS (Texas)
Posts: 1,025

Posted:

Sheila. I have no witch hunt. I have a problem with the board and manager. Either by action or omission making it extremely difficult to get access to information for which every owner has a right. Yes I can send a certified letter. As everyone is aware, attempts to limit access to voting and information is one tactic that be used to discourage a owner participation.

It gets worse.
This is the first contested election since right after hurricane Harvey.
There are now enough owners who are fed up and are willing to serve. We have gathered enough proxies to ensure that the current board seats will at least partially be filled by new owners.
So at the annual meeting. There was no announcement or agreement by the owners present on the date and time of the adjourned annual meeting. Our bylaws are silent as to what method of notice must be used to notify all owners of the rescheduled annual elections.
The way our association has always handled the rescheduling of the annual election when no quorum was met was the following.
The next regularly scheduled board meeting would be the time and date. New notices would be sent out to all owners in the mail. The same way original notice was required to be sent out.

Here is what just happened... The property manager sent out an email that stated....
Dear Homeowners,

Due to the annual meeting last wednesday, the Pines monthly board meeting is postponed to Wednesday Feb 23

I can find nothing in our documents that requires the adjourned annual election to occur the following month.
Also. The board meeting zoom info is never sent out 5 days in advance to all owners. It it required to be.
So when I get a notice stating the above. I want to be darn sure the board isn't going to attempt to hold the election next Wednesday. . I know there is non profit corporate code. But it's not clear to me what is applicable. Our own documents are silent as to notice requirements for an adjourned annual meeting.

LaskaS (Texas)
Posts: 1,025

Posted:

Thank you all for your feedback. The board only meets once a month. The annual election is always scheduled 3rd Wednesday in february. Which overlaps with the regularly scheduled monthly board meeting. There ars
E several large projects that are only waiting for the formal vote to approve the language of thescope of work and contract. They havbeen ready to go since November. But November the board decides is so close to Thanksgiving. Then decemeber interferes with their Christmas plans. Then january all the backlog is waiting for the board to act. Plus all the decisions regarding the annual meeting in February. The annual meet
Is held but does not achieve quorum.and the board then adjourn the meeting without so much ad addressing any owners. None of them showed up in person. Owners present were frustrated and wondering what was going on. So literally from October to March there was no actual progress made on these outstanding projects.

I hoping that the notice of the board meeting next week was just a courtesy. The board didn't get any association business handled. It is refreshing thathey amongst themselves agreed to have a board meeting next Wednesday. I just want to make Darn sure that they dont try and classify this board meeting as the valid meeti g where the annual elections and other business will take place.

Again. When I come here and post. I obviously don't post when the board is following the governing documents etc. I post here when the information I have researched and our governing documents indicate the board and or board member is acting outside of their authority. And or violating the due notice and process rights of homeowners.. B
Unfortunately. Some board members continue to believe the authority to do all things necessary if in their opinion they believe it's in the best
interest of the association. And of course. The missing piece is. They are authorized to do all such things that are lawfully prescribed...it's a huge difference. Not understanding this difference is in my opinion a failure to uphold the fiduciary responsibility that are inherent in serving on a non profit board. Sorry for typos I'm t my warehouse typing on a phone.

LaskaS (Texas)
Posts: 1,025

Posted:

More than just a failure to uphold the ficiary responsibility.

Not understanding or willy ignoring the limitations to what a board can do has resulted in the board agreeing to have work done using common funds that is clearly listed as an individual owners responsibility. Then the contractors they hired to do this work were not voted on and the contracts signed were so lopsided that the Contrsct basically gave the association no legal remedy to protect our interests. Then to top that off. Hundreds of thousands of dollars were invoiced by contractors without any verification that the work was done according to the contract. And when some owners.. Including me, started noticing that the work being performed
Did not match the notice sent to owners outlining the work to be done. And the contractor performing the work was not the contractor that the board had chosen in a duly called meeting after lengthy consideration and review of the bids. Instead of a board member or anyone checking to see if what was being said had merit. The president proceeded to pay all the invoices without a board vote.

,.

LaskaS (Texas)
Posts: 1,025

Posted:

Darn. Sorry for the typos. But again. I just want to reiterate that none of you know all of the mismanagement and lack of proper oversight that has occurred over the past 4 years. So please remember that my posts have always been the result of the individual board members either acting in their own interests or to cover up mistakes which they did or should have known were easily avoidable. I understand that when you see only negative or critical posts it's easy to think "geez. She complains about everything" I ask you to rethink it.the things I write and my attempt to provide background information for the question I have. Without the details and specifics. No applicable advice can be given.
For those of you who want to hear what the board is doing right.
No contracts or major decisions are made without a board vote. Minutes are taken at each meeting(unfortunately they aren't available upon request. There is no official minutes book or online portal. when an approved project goes wrong. The Minutes to that meeting suddenly are not available)
However. I do know that minutes are being taken. When I was on the board. They often did not accurately reflect the qualifications for decisions made.
As for common area maintenance. There still is no proper regular and preventive maintenance schedule. There still is nothing to keep track of owner requests and or work orders.
The property manager.. Board member has charged owner accounts for work he feels should be charged for. That's not the way it works in America. Geez
All I have ever wanted was proper accountability. If someone says they are going to do something. Then they should do it. IF they discover they can't do it. Then ask for help or hand off the task. Don't just hope it goes away. When requests are made by owners don't treat requests with suspicioun and thoae making the requests with disdain. Have a clear defined policy for what and when charges can be assessed to an account.
If you don't have the time to actually
Serve on the board. Get off. Don't try and make excuses and point fingers... I'll stop there.

LaskaS (Texas)
Posts: 1,025

Posted:

Augustine.. I knew the annual meeting would not make quorum to be able to hold elections.. We(owners running for open seats) have about 45 proxies. The board only at 22. We also have all month to collect more. Unless the board is trying to claim they can hd the adjourned election next week. Then I'm afraid that we won't have enough time to gather more. Remember. Notice of the meeting with the candidates and proxy didn't go out well in advance as per our normal procedure. IN DECEMBER I STARTED ASKING FOR CONFIRMATION THAT 5 SESTS WERE UP FOR ELECTION. IF I MADE MY OWN PROXY AND IT HAD I CORRECT ELECTION INFORMATION I KNOW THEY WOULD HAVE BEEN REJECTED.

AugustinD
Posts: 3,698

Posted:

LaskaS, I do not have any statute section or case law with any kind of power regarding notice. Your options are the usual:

-- Hire an attorney.

-- Continue trying to get proxies and trying to get a fair election.

-- Recognize that you do not have the numbers needed to effect change and give up.

-- Move.

LaskaS (Texas)
Posts: 1,025

Posted:

augustine,

I have the proxies.
I have the owners ready to serve on the board.
I am trying to ensure fair elections.

At this point, the actual election will be next month,
I did finally get a couple board members to agree to consult Our association attorney to get the correct answer 5 seats or 4 seats and proceed accordingly.

Thank you for letting me know you aren't aware of any notice requirements for adjourned annual meeting.

AugustinD
Posts: 3,698

Posted:

Quote:

Posted By LaskaS on 02/19/2022 10:00 AM
Thank you for letting me know you aren't aware of any notice requirements for adjourned annual meeting.

This is not what I said. In my layperson's opinion, a court would say the notice for resuming an adjourned annual meeting is 100% identical to the requirements for notice of any meeting of the owners.

LaskaS (Texas)
Posts: 1,025

Posted:

henry,

I may not have been clear. I and the other owners running for the board did collect proxies.

We couldn't collect enough to meet the 50 percent quorum required. So at the adjourned meetings. The election is held and the number of proxies collected plus owners attending in person constitutes a quorum.

We(myself and the resident owners who are running for the open seats) will also use this month to collect more proxies.

A quorum is approx 130 units.(not exact because votes are calculated on weighted share basis according to square feet)

the current board and the proxies that were turned in to the office was totaled 24.

My group has collected over 55 so far.

LaskaS (Texas)
Posts: 1,025

Posted:

Yes, In my double laymen's opinion, I would think a court would require identical requirements.

I just haven't been able to find any actual written language in the statutes requiring this.

My successes in reversing the boards decisions or unauthorized actions in the past have all included actual statute that clearly states the correct procedure.

i.e. the board did reverse the charge to my account that was placed for $750. Based solely on that letter i sent including the statute that you sited here.

AugustinD
Posts: 3,698

Posted:

LaskaS, write this to the Board:

Dear Board of Directors,

For the upcoming meeting of the members of the corporation, to elect directors and address other items on the agenda, I respectfully request that the Association provide notice to each member, that is entitled to vote, "not later than the 10th day and not earlier than the 60th day before the date of the meeting." I make this request pursuant to TPC 82.108 and the Texas Nonprofit Corporation Act as follows.

From TPC 82.108:

Notice of a meeting of the association must be given as provided by the bylaws, or, if the bylaws do not provide for notice, notice must be given to each unit owner in the same manner in which notice is given to members of a nonprofit corporation under Section A, Article 2.11, Texas Non-Profit Corporation Act (Article 1396-2.11, Vernon's Texas Civil Statutes).

The Texas Nonprofit Corporation Act states:

A corporation other than a church shall provide written notice of the place, date, and time of a meeting of the members of the corporation and, if the meeting is a special meeting, the purpose or purposes for which the meeting is called. The notice shall be delivered to each member entitled to vote at the meeting not later than the 10th day and not earlier than the 60th day before the date of the meeting. Notice may be delivered personally or in accordance with Section 6.051(b)

Thank you,

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