Can Owners Reverse a Board Decision?

RONR is not required for HOA board meetings in CA and in many if not most other states.* It or some parliamentary procedure is required for membership/association meetings in CA, and in many if not not most or all other states.

Since the topic is Board decisions, association's bylaws, CC&Rs and possibly state statutes would apply to the possibility of overturning board decisions.

In CA, for example, following certain specified procedures, Owners may overturn Rules & Regulations decisions that the Board makes.

*I think we learned recently that RONR might be required for NH board meetings, and long ago a poster here wrote it's required for CT assn. board meetings.

Correct, but this is pursuant to either bylaws or state law where either the bylaws or state law speak expressly of a right that the owners en masse have. The Bylaws and state law trump RONR. I know you know this.

I just wanted to get all of this written down somewhere, for quick reference.

The RONR forum seems to me to be pretty dug into the belief that owners can reverse any board decision, based on a certain Robert's Rule that talks about this, and ignoring the powers that the governing documents and state law expressly vest in the Board and the owners en masse which indicate, no, the owners have very limited powers.

One RONR forum member contended that the section on RONR concerning disciplinary action against a member who had hurt the HOA/COA is a power outside the bylaws and state law that owners could exercise under RONR (where RONR's use is required). I noted that the only discipline that seemed to fall into this category seems rather powerless: A censure. And if the censure option was exercised, it had better be with due process and the law of defamation in mind.

When it comes to reversing a board decision, a HOA/COA membership: cannot expel a member; cannot fine a member without being overruled by the Board (and 'round and 'round the owners and board then go), and only where fines are allowed; cannot remove an officer without the board turning around and re-appointing the officer (and 'round and 'round we go); and already has the power to remove directors.

I am disappointed so far that the RONR forum tends not to contemplate prudence and the safe course. Which to me of course would be a vote to amend to allow the owners to have a certain power (presuming the amendment is consistent with state law), and then the owners can have at it and exercise this power, with much less chances of any dispute.

The NH Condo act requires RONR for COA Boards and owners' meetings.

I agree it's a minority (perhaps a tiny minority) of states that have a RONR requirement for COA/HOA board meetings.

RONR seems so chock full of philosophical language. I'd still rather have it apply than not. But a super expert parliamentarian, who knows the parliamentary rules from the bylaws, state law, and RONR, is needed. This of course is way too much to ask.

I liked your response to JohnC73 in the other thread.

Since I like to broaden the scope of our discussion (grin), and since this brings up points I've made in other threads here...

Consider the downstream implications of something like this:

* If the organization wishes to hold the board accountable for its decisions, allowing owners to reverse board decisions undermines this.

* It will hold the board accountable for things they don't control.

* Assuming similar levels of knowledge that we see in HOAs, it puts the decision-making in the hands of those who in general are less knowledgeable.

* It takes decision-making out of the hands of those with a fiduciary duty to act in the best interests of the corporation and puts it in the hands of those who can act in their own self interest, even if that self-interest in contrary to the welfare of the corporation.

* It undermines the corporations ability to elect effective directors, since you'll effectively weed out the ones who can see the previous points and who will decline to serve on the board at all.

It may be legal, but IMHO it is counterproductive and dumb.

It's not legal for the membership to override any old board decision. The bylaws and/or state law always give the board the right to make all decisions except those reserved (exclusively, implied) to the owners.

The RONR crowd insists it is. The RONR crowd (well, at least one) also awards the membership all manner of powers that are not listed in the bylaws or state law. Which would be... ? I am still wondering. Super powers? The power to fly without a broomstick, thus improving one's Quidditch game? I am lost. (pounding desk; waah waah... waah?)

But hey, I was going to suggest CathyA3 and KerryL1 drop in at the RONR forum and try to think like the RONR forum crowd, except use their own (meaning CathyA3's and KerryL1's) rather fine reasoning skills. If CathyA3 wants to go debate these folks and see if she can then persuade me it's legal for the membership to override any old board decision, I am open to being thrashed in the internet arena.

I'd send TimB4 but the RONR veterans are all male, and I think the RONR forum would benefit seeing some intelligent people of the other gender (or sex, or just having XX chromosomes, in every single cell without the NCAA Swimming Division arbiting).

I have a RONR paperback sitting on my desk collecting dust. Got it from Amazon 12 years ago and I don't I have ever opened it it and to this date have never needed it.

It finally occurred to me why I was so bothered by this.

If you have some areas where the homeowners can override board decisions, then in those areas there is no accountability at all. You can't hold the board accountable if they did not make the decision. You can't hold the homeowners accountable because they have no duty to act in the best interest of the association. It's a loophole, a Get Out of Jail Free card - anything goes, the community is left holding the bag if something goes wrong, and nobody has any recourse.

I wonder what would happen if someone filed a lawsuit as the result of a homeowner override. The board would be covered by D & O insurance, but the homeowners wouldn't be...

Thanks for this post Augustin! Hopefully newbie's like myself review this a few times.

A poster mentioned that there are two ways to reverse a Board decision.

1) Replace the BOD at the next BOD election.

2) Amend the governing docs to address the issue.

I think there is a 3rd option needed, one that I could be facing. Not sure if my post was inspiration for this post or not and I don't want to turn this into that discussion again, so I will make my situation generic. Also, our association is a vacation get away, not permanent residents and most owners are very apathetic towards the governance.

Our by-laws state that you CAN NOT do "XyZ" at the annual meeting. The BOD has always allowed XyZ at the annual meeting. I think mostly due to ignorance of the law and the fact that they didn't understand our own by-laws. Our association only recently started to follow the NH Condo Act due to much pressure from the owners, sad, but true.

Not sure if this is how other associations function, I assume not. Armed with the information I gathered from my post on this forum I have notified the BOD that they can no longer allow XyX at the annual meeting per our by-laws.

I expect the BOD to respond(if they even respond) telling me that I'm wrong and they have a lawyers opinion stating so and they will continue to allow XyZ. This is standard practice, the BOD frequently states they are acting on the attorney's advice and they NEVER share the question or response from the attorney. The owners really have no proof that the attorney was even asked a question and many fell that the BOD just uses this excuse to handle many issues.

So, option #3 I assume is to hire and attorney and take the BOD to court. A very expensive proposition for owners. In NH there is also a provision in the NH Condo Act that the winning side of the court battle is entitled to attorney's fees from the losing side. So, someone in my position better be very sure that they have a solid case because if they don't it could cost them a lot of money.

Is there a better option than #3?

Thanks
John

On second cup of coffee reviewing this thread.

Exactly the issue we face. We need a super expert parliamentarian, who knows RONR, State Condo Laws and the Association by-laws. This is a tall order.

Thanks for this post
John

JohnC73,

I think the subject line I should have used for this thread should have read, "Can Owners Reverse a Lawful Board Decision." Because this was my own interest.

But I did not do this, so oops on me . Besides, in the words of I believe SheliaH and CathyA3, going off on related tangents is "what we do here" at HOATalk.

My observations about your HOA's particular situation as it pertains to the topic of reversing board decisions:

1.
The board does not legally control what happens at annual meetings. The presiding entities at the annual meetings are: state law, the governing documents, the owners, and the president. These entities are in no particular order; each has its place when it comes to controlling how annual meetings are conducted.

2.
In general, a board vote to accept a proposed amendment that was allegedly unlawfully revised, with the revision out of scope, and so unlawfully voted at the annual meeting, is not a lawful power the board possesses. Again: In general. In some specific situations, like yours, I think the caveat of which I spoke earlier may arise. See below.

3.
Nonetheless once a board goes forward with putting a vote on an amendment on legal record, and given the board's control over spending and the HOA attorney, I agree that the next option (to reverse an allegedly unlawful board action) is to threaten a lawsuit and as needed down the line, file suit in court.

4.
You observed the following:I speak as a layperson, though one who has doing her best to study court decisions (for HOAs, COAs, and to some extent, corporations) and attorney's advice to HOAs and COAs. The factthat the owners neverobjected to this is a huge problem, legally. The courts have absolutely said a number of times that owners failing to object to a bylaw violation, especially the same violation over many years, represents the owners consenting to the violation as a lawful practice. In other words, the owners failing to object is consent "by acquiescence" to a bylaw amendment. In this case, the de facto bylaw amendment, after these many years, is that notice is not needed to change a proposed amendment at the annual meeting itself.

5.
How do other HOAs/COAs handle these situations? Generalizing is hard and hazardous. For bylaws, I can source a string of litigation for non-HOA, non-COA corporations where an appeals court considered amendment of a bylaw via acquiescence. Sometimes the court does agree that a de facto amendment (by acquiescence) has taken place. Sometimes not. I think reading just one or two of these appeals court decisions gives a good feel for what happened and what might happen in the future. "Might" being an important qualifier, as is often noted here. If you want a citation or two, let me know. As I recall the decision from Arizona IIRC, that I have in mind is not difficult reading, as long as one knows what to look for. Said decision names similar decisions.

6.
I can add this: One instance where the "acquiescence" claim, for HOAs, commonly arises is in lawsuits where the plaintiff-owner alleges a covenant on land use has been abandoned, due to multiple violations of the covenant over many years, in a way that is obvious to someone driving around the grounds. Hence according to the plaintiff owner, the Board and HOA no longer have the right to enforce the covenant, because effectively, everyone has consented to ignoring the covenant for years by staying silent ('acquiescing').

7.
The hoatalk threads you started several days ago were "inspiration" for the thread herein only to the extent that your hoatalk threads caused me to return to robertsrules.forumflash.com and look at a thread there begun several months before and where I had posted (several months before). To vent yet again: My post yesterday cited two RONR sections that speak directly to the structure of HOAs/COAs and how the Robert's Rules are somewhat, but importantly, different (vis-à-vis non-shareholder organizations) as a result. AFAIC the fact that the veteran posters at forumflash do not understand at all that HOAs/COAs are considered shareholder/stock and business corporations and hence are treated differently under RONR is outrageous. It betrays a staggeringly unstudied veteran membership at the robertsrules.yahda.com forum, AFAIC. Robert's Rules does not define a lot of its terms. E.g. "organized society." Hence one has to go looking for definitions that, if push comes to shove, a court will want definitions for. It's what they do. (Doh.) (Anyone saying, "Quit gossiping, Augie": Yeah yeah. Obviously I am pretty unhappy about the quality of advice at the RobertsRules.yada.com forum for stock corporations like HOAs/COAs. I am shamelessly using this hoatalk thread to express my annoyance, along with wanting to get the facts down for the archives for quick reference in the future, should more refugees from the RobertsRules.yada.com forum appear here at hoatalk.)

8.
JohnC73, for your reference, the board has a fiduciary duty, and right, to exercise extreme caution when asked what the HOA/COA attorney said. This includes refusing to say anything about what the HOA/COA attorney advised. Why? Because roughly, revealing what the HOA/COA attorney said could result in giving people ideas about the strategy to best sue the HOA. Where things are somewhat foggy legally (as they arguably are here), the best attorneys will not speak in black-and-white terms. If I were an attorney and in this case, this HOA's attorney, I would say something like:

Directors, continuing to ignore this bylaw, because of the buzillion years of acquiescence by owners to this practice is absolutely defensible, if push comes to shove and there is a lawsuit. The Board/HOA might win. On the other hand, what you are doing is a pretty serious violation of the written bylaws. Practically speaking, what you're doing is not advisable. Why? Because it does invite a lawsuit. In my opinion, sometimes this could be on very good grounds, like where the stakes are high. Where the stakes are high, the Board/HOA is more likely to lose. When are the stakes high? The stakes are high when the impact of the amendment is larger. The stakes may be high when the change at the meeting is likely to be seen as out of scope. Notice, pursuant to your HOA's Bylaw 10-100 is legally important

Should this opinion be released to the membership? No. Why? Because for one thing, it absolutely has some nuggets that you (JohnC73) could use to motivate you to sue. Assisting an owner to sue the HOA is a violation of a board's fiduciary duty.

9.
You say:And the Board may be thinking everything I posted above, particularly if their attorney said as much. Whence in my opinion, you are not on solid ground to flatly assert the board "can no longer allow XyX." Though I am not sure what wording you used. There's a way to make a very subtle, not so offensive and intimidating legal demand. And there's a way to get in people's faces and say, "I'm gonna sue your bottoms unless you stop doing XyX!" Which at a HOA is almost guaranteed to not get the desired response.

Thanks Augustin,

I'm learning a ton here and I'm think I'm just scratching the surface. So much to learn.

I did steal some of the comments on this thread and used them in my discussion on the Roberts Rules forum. I ackowledged that fact on the RONR forum.

Time to go golfing - something I know a little more about - lol (not much more)

John