Calling a special meeting...need clarification on prior posts

Started by JeanneH3 • 19 replies • 414 views

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JeanneH3 (North Carolina)
Posts: 158

Posted:

I searched the forum database for special meetings and came up with several detailed posts about how to schedule and manage a special meeting. I need some clarification however on some points.

From a 2011 post by TimB4, I got this:

3. If the Board refuses to answer or refuses to hold the meeting (and all signatures are valid) then the recall people need to arrange the meeting doing all the work the Board would typically do.
This would include the following:

a) Have a list of replacement candidates
b) Arrange meeting time and place
c) Get membership list and mail notices with cover letter and proxy form (if proxies are allowed)
d) Print agendas, ballots
e) Send special invitation to registered agent, individual board members and management company
f) Hold meeting (giving each board member the right to make a statement and answer questions)
g) Hold Vote for recall
h) Count the votes and announce results
i) If successful hold vote for new directors
j) Count the votes and announce results
k) By certified mail, send meeting results to each existing member of the Board, the Management Company and the Registered agent stating when books are expected to be turned over, date/time of next board meeting, etc.
l) If Board refuses to step down and/or turn over records -legal action may be required to force the turnover

This indicates that the members are calling the meeting, scheduling it, collecting ballots and proxies, chairing the meeting. Under NCGS, a special meeting can be called by 10% of the members but who actually "runs" it? When dealing with a rogue board that is violating the law, not communicating with owners, and a PM that is assisting the resistance of the BOD, why would any members trust how the BOD runs a special meeting that focuses on the board's failures? If the members take charge of scheduling and managing the meeting, shouldn't there be a third party to collect ballots and proxies to insure no fraud or conflict of interests?

This is new territory for us. Just don't have the experience of years to have ever seen a special meeting in action.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By JeanneH3 on 01/04/2023 3:52 AM
I searched the forum database for special meetings and came up with several detailed posts about how to schedule and manage a special meeting. I need some clarification however on some points.

This indicates that the members are calling the meeting, scheduling it, collecting ballots and proxies, chairing the meeting. Under NCGS, a special meeting can be called by 10% of the members but who actually "runs" it? When dealing with a rogue board that is violating the law, not communicating with owners, and a PM that is assisting the resistance of the BOD, why would any members trust how the BOD runs a special meeting that focuses on the board's failures? If the members take charge of scheduling and managing the meeting, shouldn't there be a third party to collect ballots and proxies to insure no fraud or conflict of interests?

This is new territory for us. Just don't have the experience of years to have ever seen a special meeting in action.

Initially, the membership must petition the board to hold a special meeting.
This is done by collecting signatures and submitting it to the board.
Always collect more then the minimum needed and keep a copy prior to submitting the original.

An example of a petition for a special meeting can be found here. Note: Since this is from a CA site, you would need to change the form to reflect your purpose and cite your governing documents and State statutes.

When you submit the petition, the board should technically call the meeting. The steps I outlined in 2011 were an option, based on statutes at that time, if the board refuses to call the meeting.

JeanneH3 (North Carolina)
Posts: 158

Posted:

Quote:

Posted By TimB4 on 01/04/2023 4:10 AM

Thank you for your reply. I was hoping you would see the post and comment. The link you provided is very helpful.

We are dealing with an extremely secretive board and MC that are aggressively declining to follow state law regarding member access to documents, particularly minutes. Our member committee recently exposed data showing that an action the board made without owner input resulted in a stop work order from the fire marshal because no applications for permits had been submitted and the resulting installation violated fire code as well as zoning and building codes. This was a major epiphany for members who had assumed that since the board presented the project as a fait accompli that the board had done due diligence in obtaining all legal/regulatory permits. Questions pertaining to property taxes, liability risks for having non-permitted structures, how much was spent on this, etc. should be answered in a special meeting.

JeanneH3 (North Carolina)
Posts: 158

Posted:

Quote:

Posted By TimB4 on 01/04/2023 4:10 AM

This indicates that the members are calling the meeting, scheduling it, collecting ballots and proxies, chairing the meeting. Under NCGS, a special meeting can be called by 10% of the members but who actually "runs" it? When dealing

Initially, the membership must petition the board to hold a special meeting.
This is done by collecting signatures and submitting it to the board.
Always collect more then the minimum needed and keep a copy prior to submitting the original.

Dumb question but how does one collect signatures on a petition when 90%+ of owners do not live on the property (vacation condos)? Can't go walking door to door to do this. Can digital signatures work? Or must these be mailed to owners with the hope that they are returned?

ElleN (Idaho)
Posts: 4,420

Posted:

Jeanne, this is a condo that is about 17 years old, right? Then per the NC Condo Act section 47C-3-108:

"Not less than 10 nor more than 60 days in advance of any meeting, the secretary
or other officer specified in the bylaws shall cause notice to be hand-delivered or sent prepaid by
United States mail to the mailing address of each unit or to any other mailing address designated
in writing by the unit owner, or sent by electronic means, including by electronic mail over the
Internet, to an electronic mailing address designated in writing by the unit owner. The notice of
any meeting must state the time and place of the meeting and the items on the agenda, including
the general nature of any proposed amendment to the declaration or bylaws, any budget changes,
and any proposal to remove a director or officer."

The Condo Act says 20% of the owners can call a special meeting, unless the bylaws specify a lower number. The NC nonprofit corp act says 10% minimum. If the bylaws are silent, then the condo act controls (because it is apposite). What do your bylaws say about the percentage required? (Did this come up here recently?) If the board is ignoring the petition, might it be because the petitioners did not meet the requirements for calling a special meeting?

If the petition has signatures for a percentage of owners meeting the threshold, then someone ought to politely point out the statute section above.

Recalls can be expected to fail if those doing the recall don't know the law and choose not to use an attorney, while the board is using the attorney. The regular annual meeting seems a safer bet for getting rid of incompetent directors.

Regarding who chairs the meeting: The Condo Act says Robert's Rules controls unless the Bylaws say otherwise. Robert's Rules say the president is supposed to preside. You might point this out to the board. You have to come up with an agenda that ties the president hands. Much of the list that Tim proposed back in 2011 is well-suited to coming up with an agenda. If the president refuses, the petitioners should choose someone to preside (and title the someone as the "Presiding Person of the Special Meeting of ____ ___, 2023"). That someone should know how to instruct people to stick to the agenda.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Jean

A Special Meeting is like a field with land mines in it. You would be wise to seek legal assistance so you do not step on a land mine. The BOD and MC will be trying to block you at every step. It is not a process the average person could undertake successfully.

JeanneH3 (North Carolina)
Posts: 158

Posted:

Quote:

Posted By ElleN on 01/04/2023 4:55 AM
Jeanne, this is a condo that is about 17 years old, right? Then per the NC Condo Act section 47C-3-108:

"Not less than 10 nor more than 60 days in advance of any meeting, the secretary
or other officer specified in the bylaws shall cause notice to be hand-delivered or sent prepaid by
United States mail to the mailing address of each unit or to any other mailing address designated
in writing by the unit owner, or sent by electronic means, including by electronic mail over the
Internet, to an electronic mailing address designated in writing by the unit owner. The notice of
any meeting must state the time and place of the meeting and the items on the agenda, including
the general nature of any proposed amendment to the declaration or bylaws, any budget changes,
and any proposal to remove a director or officer."

The Condo Act says 20% of the owners can call a special meeting, unless the bylaws specify a lower number. The NC nonprofit corp act says 10% minimum. If the bylaws are silent, then the condo act controls (because it is apposite). What do your bylaws say about the percentage required? (Did this come up here recently?) If the board is ignoring the petition, might it be because the petitioners did not meet the requirements for calling a special meeting?

If the petition has signatures for a percentage of owners meeting the threshold, then someone ought to politely point out the statute section above.

Recalls can be expected to fail if those doing the recall don't know the law and choose not to use an attorney, while the board is using the attorney. The regular annual meeting seems a safer bet for getting rid of incompetent directors.

Regarding who chairs the meeting: The Condo Act says Robert's Rules controls unless the Bylaws say otherwise. Robert's Rules say the president is supposed to preside. You might point this out to the board. You have to come up with an agenda that ties the president hands. Much of the list that Tim proposed back in 2011 is well-suited to coming up with an agenda. If the president refuses, the petitioners should choose someone to preside (and title the someone as the "Presiding Person of the Special Meeting of ____ ___, 2023"). That someone should know how to instruct people to stick to the agenda.

Thank you for taking the time to respond. Our by-laws state 20% required. We have not yet petitioned the board for a special meeting nor are we trying at this point to remove any directors. We are trying to get the board to communicate with the owners about this recent issue involving the purchase of 24 large sheds which have been placed under the buildings with no input from the owners. It was recently discovered that the town fire marshal put a stop work order on the property citing the fact that a number of sheds are in violation of the fire code but more importantly, no applications for permits had been applied to several departments as required by law. And then there's the issue of the board converting common elements to exclusive limited common elements without the owner inputs. No meeting minutes published in 3 years, intentional refusal to publish the names and addresses of board directors as required by law, and on and on.

We have counseled with a very good community association lawyer who opined that we would likely win a lawsuit if we were to sue. However, that is the last thing we want to do since we are embracing the idea that suing the association is suing your neighbors so we are trying to resolve the issues without taking that route. The special meeting is intended to get the owners to amend the by-laws requiring the board to approve and publish board meeting minutes within 60 days of the last meeting and to amend the by-laws to require a code of conduct be signed by all current and future board directors. We'd also love some answers to the shed questions owners have been asking but getting no answer. Later we will work on replacing directors by election. Our concern is that if we were to petition for a special meeting, that the board president will dominate it again and the MC will facilitate the president's bullying.

JeanneH3 (North Carolina)
Posts: 158

Posted:

Quote:

Posted By JohnC46 on 01/04/2023 6:16 AM
Jean

A Special Meeting is like a field with land mines in it. You would be wise to seek legal assistance so you do not step on a land mine. The BOD and MC will be trying to block you at every step. It is not a process the average person could undertake successfully.

But that doesn't make sense. Supposedly a special meeting is the same as a regular annual meeting, what makes it "special" is that it is not regularly scheduled. THere is no attorney supervising our annual meetings or board meetings.

In our case, we want three things from a special meeting: 1) An open discussion with owners to express themselves about the shed issue and give the board an opportunity to explain themselves; 2) Amend the by-law to require the board to approve and publish board meeting minutes within 60 days of the last meeting; and 3) amend the by-laws to require current and future directors to sign a code of conduct/pledge. We believe, based on conversations we've already been having with owners, that the optics would be bad for the board to openly oppose these by-law amendments. There is a growing distrust and suspicion of the board due to their secrecy and intentional violation of the statutes so to continue to be perceived as trying to protect their secrecy won't go over well in next year's board elections.

TimB4 (Tennessee)
Posts: 21,059

Posted:

You will need to have the proposed bylaw changes drafted for the meeting so they can be voted on.
Typically, there is also a requirement that those changes be mailed with the meeting notice.

Meeting of board minutes are typically approved at the next board meeting.
Therefore, I suspect your amendment might be two fold:

1) increase the minimum required meetings

2) Requirement to publish governing docs vs. make them available for inspection. To be honest, I think that this would be more of a policy resolution vs. a bylaw amendment. If you are changing the bylaws to have items published, you need the draft to be specific and not just for minutes. It does take time, energy and money to properly run a website, maintain a community bulletin board or print and mail the documents. I'd suggest looking into costs so you have facts when the issue is discussed.

KerryL1 (California)
Posts: 14,550

Posted:

I, with Tim, also am thinking that a requirement to have meeting minute available for owners upon their written 30 days after the meeting can be a simple policy resolution. In CA, Civil Code requires this, and if not yet approved by the board a copy of the draft minutes must be sent to the owner. Does NC have no such requirement? And why must the Board "publish" them ( tho' our does after approval).

Ethics pledges has been discussed many times here and most argue that they have no teeth. I agree. with your other manor issues, I honestly don't think you should address this one.

Btw, doesn't your contract with you MC state that they will comply with state laws or similar? In other words, at this special meeting of th members, do you anatto demand that the Board requirement the MC send to whomever requests the, membership lists? Your g group has rad the contract right?

Is there an act contract with the shed company? If so, get your hands on it and read it.

Sorry I can't help here as I've never been involved in a project like this and it looks like most others here haven't either.

Inexperienced as well with arbitration, but in CA, I believe owners would demand what's called Internal Dispute Arbitration. does NC have anything like this?

JeanneH3 (North Carolina)
Posts: 158

Posted:

Quote:

Posted By KerryL1 on 01/04/2023 7:16 PM
I, with Tim, also am thinking that a requirement to have meeting minute available for owners upon their written 30 days after the meeting can be a simple policy resolution. In CA, Civil Code requires this, and if not yet approved by the board a copy of the draft minutes must be sent to the owner. Does NC have no such requirement? And why must the Board "publish" them ( tho' our does after approval).

Ethics pledges has been discussed many times here and most argue that they have no teeth. I agree. with your other manor issues, I honestly don't think you should address this one.

Btw, doesn't your contract with you MC state that they will comply with state laws or similar? In other words, at this special meeting of th members, do you anatto demand that the Board requirement the MC send to whomever requests the, membership lists? Your g group has rad the contract right?

Is there an act contract with the shed company? If so, get your hands on it and read it.

Sorry I can't help here as I've never been involved in a project like this and it looks like most others here haven't either.

Inexperienced as well with arbitration, but in CA, I believe owners would demand what's called Internal Dispute Arbitration. does NC have anything like this?

NC offers mediation services to owners having disputes with the board. The irony of this is that NC general statutes requires the HOA board to notify owners/members of this right to mediation annually, like in a newsletter or email. Most HOAs also publish it on their web sites. We've been wrangling with the board and the MC to do this since they have not done so at all for years. Our owners are utterly ignorant of their rights.

As for reading contracts, if I recall that is one document I cannot get access to. The MC CEO is the only one who is credentialed property manager. Hhis credential code of conduct certainly contains a commitment to following the law and if push came to shove, I could file a complaint with I asked the fire marshal if a credentialed property management agent should have known that storage sheds needed to be permitted by the town and he replied, "Absolutely." So, he knew and since we have no minutes of any meetings for the past 3 years, we have no idea what he advised the board.

We have no idea where the sheds are being purchased from. MOre secrecy from the board.

Regarding the code of conduct, the thought was that it was a good tool to educate owners and prospective new directors of the responsibilities of being a director. Several legal web sites also advise to flush out the rogues or bullies who will not sign it. Years ago I started a petition campaign to have our county commissioners adhere to a code of ethics. The most vocal opponent turned out to be the most corrupt,, abusing her power to destroy a neighbor's business.

MichaelS56 (Minnesota)
Posts: 859

Posted:

The process of calling a special meeting is found in our governing documents.

ElleN (Idaho)
Posts: 4,420

Posted:

The owners cannot force the board to enact a "policy resolution," especially given a rogue board like what the OP describes. A bylaw amendment requiring publication of the Minutes is something the owners can force.

KerryL1 (California)
Posts: 14,550

Posted:

I, and perhaps Tim, was thinking that owners requesting that the Board make a policy to have draft minutes available might fly. At the special meeting, Owners request that the Board have such an item on the agenda for the next board meeting. It could be that at the special meeting, pressure from ones fellow owners might persuade the board to do just that. Your owners request for that and other items will be in the minutes of the special meeting.

If that doens't work, then a push for that minutes matter and other Bylaws amendment would be, imo, a next step.

Even if your MC doesn't send the NC mediation info to owners as required, you still can get it, right? It seems your group needs to know more about it.

Have any of you tired contacting the credentialed owner of your MC directly for, say, a copy of their contract with you? Or writ him a certified letter, return receipt demanded. A small group of you could go to their offices and request the contract and other materials too. Surely he doesn't want to lose his standing as a CAM????

Meanwhile, I think the th social meeting is a good way to start educating owners about their rights.

ElleN (Idaho)
Posts: 4,420

Posted:

In NC Jeanne is correct that condo associations/corporations are not required to provide contracts to members.

CathyA3 (Ohio)
Posts: 6,299

Posted:

Quote:

Posted By JeanneH3 on 01/04/2023 4:14 PM

I've been reading along and this jumped out at me.

What can make it more difficult is that there are very specific legal requirements for this, and if you get one single part of it wrong, it can invalidate the whole thing. And given the high number of absentee owners, you may have a harder time with a do-over should one be needed - you want to get everything right the first time. Potential landmines: failure to notice all owners in the proper format, not including all essentials on the agenda, typos that can change the meaning of various documents, not controlling the meeting and allowing extraneous items to be introduced, and attempts to disrupt the meeting.

I also think the stakes are higher for this meeting than for a routine annual meeting, both because of the important issues and because you can assume a rogue board and manager will be fighting you every step of the way. They may not be following the law, but they are experienced whereas the typical homeowner is not. Expect them to use your lack of experience against you.

In your shoes, I'd want all of the paperwork vetted by a knowledgeable attorney, and if I suspected the bad actors may try to disrupt the meeting I"d consider hiring an off-duty cop to keep the peace.

KerryL1 (California)
Posts: 14,550

Posted:

Agree with Cathy that your group should meet with an attorney about the specifics of social meeting of the members.

Meanwhile, I'm still thinking putting pressure on the MC owner to provide certain records, e.g., minutes and owner address lists, that are required by law just might be a good tragedy. Perhaps the CAM credential has an agenda to report to when MCs do not comply with NC laws.

ElleN (Idaho)
Posts: 4,420

Posted:

Jeanne, in your request to inspect the Minutes, did you do exactly as the NC nonprofit corporation act says?

JeanneH3 (North Carolina)
Posts: 158

Posted:

Quote:

Posted By ElleN on 01/06/2023 6:45 AM
Jeanne, in your request to inspect the Minutes, did you do exactly as the NC nonprofit corporation act says?

Good question. What has been readily, reasonably available to members to view on the association web site (managed by the MC) are 80 files documenting board and annual meetings dating back to 2007. Those files abruptly stop in 2019 with a rare few exceptions. THere are no annual meeting minutes for 2019, 2020 or 2021. What is labeled as the 2020 annual meeting minutes is actually the agenda.

The only posted minutes between 2019 and now are minutes of a September 24, 2022 board meeting. Lovely minutes, detailed but also references past 2022 board meeting of which there are no minutes.

To make a long story short, allegedly the missing board meetings minutes are in draft form and not approved. Yep, three years worth supposedly. The next move may be to ask to inspect the draft copies of minutes per NC process.

KerryL1 (California)
Posts: 14,550

Posted:

I'm still think that contacting the MC owner directly requesting the draft minutes of all the missing meeting is a s good, um, strategy.

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