Action Without a Meeting

Started by ConchoP • 31 replies • 449 views

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ConchoP (Texas)
Posts: 208

Posted:

Our governing documents allow the board to take Action Without a Meeting. It states: Actions taken out of meeting may be taken without a meeting if consent in writing, setting forth the action to be taken, is signed by a sufficient number of members, directors, or committee members as would be necessary to take that action at a meeting at which all of the members, directors, or members of the committee were present and voted.

For our next board meeting, should we include an agenda item to discuss the board's action taken without a meeting?

KerryL1 (California)
Posts: 14,550

Posted:

Can you repeat the exact wording for us? Which document is it? Your bylaws?

There might be Texas statutes that require more from a Board that takes action without a meeting than what you wrote.

Why do you want this on an agenda?

TerriS6 (California)
Posts: 3,284

Posted:

In California, the Corporations Code says that’s OK but the HOA law says it’s not OK. Do you have other laws governing HOAs where it’s not OK?

ConchoP (Texas)
Posts: 208

Posted:

Quote:

Posted By KerryL1 on 08/08/2023 7:38 PM
Can you repeat the exact wording for us? Which document is it? Your bylaws?

There might be Texas statutes that require more from a Board that takes action without a meeting than what you wrote.

Why do you want this on an agenda?

Our Articles of Formation state: Actions taken out of a meeting may be taken without a meeting if consent in writing, setting forth the action to be taken, is signed by a sufficient number of members, directors, or committee members as would be necessary to take that action at a meeting at which all of the members, directors, or members of the committee were present and voted.

I can only assume that we should mention the action without a meeting during a meeting; therefore, it would go on the agenda. Or do we sign off on the action and add it to the minutes without discussion?

CathyA3 (Ohio)
Posts: 6,299

Posted:

Typically actions taken without a meeting should appear in meeting minutes, either separate minutes or in the minutes of the next board meeting. There is no need to vote on the item during the board meeting unless the item had remained undecided or pending additional info. If it was decided via email, then put a statement in the next set of minutes.

(Our actions without a meeting nearly always involved urgent maintenance items that came up between meetings, and they were summarized during the next meeting in the manager's report. So nothing fell between the cracks. Also FWIW, most of the provisions I've seen allowing action without a meeting require that the decisions be unanimous - if there was disagreement among board members, then the topic has to be discussed during a meeting even if a majority of the board saw things the same way.)

KerryL1 (California)
Posts: 14,550

Posted:

Thanks for the confirmation, Concho. I do think we've seen this before re: Texas and I think I recall state does permit action without a meeting. You will need to look it up. I think it might say, as ours does in Calif. and as Cathy notes, that the decision must go in the minutes of the next meeting. The emailed voted should also e a part of the record. In Calif., too, the decision must be unanimous.

Also in Calif HOAs, Civil Code supersedes Corporation Codes. So action without a meeting may ONLY be done in cases of emergencies, which are defined as unexpected peril to lives or property.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Our attorney told us our BOD could take action without a meeting if all BOD Members agree to do so. He said we do not have to all agree as to how we vote, and as usual, the majority wins. He also said we must record the Motion and the votes in the next Meeting's Minutes as we would any Motion and vote.

I have seen some say the entire BOD must vote the same. Wrongo in our case.

KerryL1 (California)
Posts: 14,550

Posted:

This, JohnC, is why Concho needs to check Texas law. In Calif, it must be unanimous and all directors must participate. I Think this is typical, but am not sure.

ConchoP (Texas)
Posts: 208

Posted:

CathyA3 would we place an agenda item called "Action with our Meeting" and then address it or just sign a paper with an outline of the action and place it with the minutes?

LisaB21 (Texas)
Posts: 97

Posted:

Texas HOA President here. We are allowed to take action between meetings with majority vote (maybe must be unanimous decision but I can't recall right now. We review and ratify all actions between meeting by an item placed on the agenda at each monthly meeting so it is noted in the agenda, and then on the meeting minutes for that meeting.

KerryL1 (California)
Posts: 14,550

Posted:

By "we," Lisa, do you mean your HOA's documents? Or Texas statute?

AidylP1 (California)
Posts: 173

Posted:

Action Without A Meeting is in Corporation Statues all across the United States, and in almost all HOA Bylaws.

LizD3 (California)
Posts: 200

Posted:

I’m in Cali, not Texas, so the rules (very likely) are different, but wouldn’t this violate (at least, here) the Open Meetings Act? Outside of Executive Sessions or an emergency, isn’t the point that owners get a voice?

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By LizD3 on 08/10/2023 4:19 PM
I’m in Cali, not Texas, so the rules (very likely) are different, but wouldn’t this violate (at least, here) the Open Meetings Act? Outside of Executive Sessions or an emergency, isn’t the point that owners get a voice?

Yes, action without a meeting is a violation in California. Only email discussion on items of business is allowed in emergency meeting which should hardly ever happen.

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By AidylP1 on 08/09/2023 11:01 PM
Action Without A Meeting is in Corporation Statues all across the United States, and in almost all HOA Bylaws.

Not allowed in California HOAS.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Terri

Are you BOD action without a meeting is a no nay ever event in CA?

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By JohnC46 on 08/10/2023 8:18 PM
Terri

Are you BOD action without a meeting is a no nay ever event in CA?

Correct.

CIVIL CODE SECTION 4910. NO BOARD ACTION OUTSIDE OF MEETING.
(a) The board shall not take action on any item of business outside of a board meeting.

(b)

(1) Notwithstanding Section 7211 of the Corporations Code, the board shall not conduct a meeting via a series of electronic transmissions, including, but not limited to, electronic mail, except as specified in paragraph (2).

(2) Electronic transmissions may be used as a method of conducting an emergency board meeting if all directors, individually or collectively, consent in writing to that action, and if the written consent or consents are filed with the minutes of the board meeting. These written consents may be transmitted electronically.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

So... I am not sure how a HOA would ever get a thing done if they didn't do a few things without an "open" meeting. Example: Our HOA meets once a month. A lightbulb burns out at the clubhouse. January Meeting we are told the light is burnt out. We vote to have someone check the fixture and/or change the light. We have to gather 3 bids. February we get the 3 bids to review. March we find out that the light fixture is bad and needs replaced. April we have 3 more bids to review on the type of fixture and contractor. May we agree on the fixture and the contractor to do the work. June we pay the contractor and justify the fixture expense. July we receive a complaint about whom we hired and the fixture is ugly. August we have to address the process of hiring that contractor and why that fixture... September we have to discuss our legal response to the threat of lawsuit. October we wait. November we go to court. December the light burns out again...

If HOA's were to follow the meeting frequencies it could barely function or make any kind of timely decision. There are emergencies. There are threats of lawsuits. There are a bunch of outside the meeting/box issues a HOA has to address. Allowing your HOA to be a bit more flexible with being able to allow the board to make decision outside the meeting with a quorom vote makes it run so much better. The meetings then lets it be more PUBLIC and justified or not.

Former HOA President

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By MelissaP1 on 08/11/2023 4:44 AM
So... I am not sure how a HOA would ever get a thing done if they didn't do a few things without an "open" meeting. Example: Our HOA meets once a month. A lightbulb burns out at the clubhouse. January Meeting we are told the light is burnt out. We vote to have someone check the fixture and/or change the light. We have to gather 3 bids. February we get the 3 bids to review. March we find out that the light fixture is bad and needs replaced. April we have 3 more bids to review on the type of fixture and contractor. May we agree on the fixture and the contractor to do the work. June we pay the contractor and justify the fixture expense. July we receive a complaint about whom we hired and the fixture is ugly. August we have to address the process of hiring that contractor and why that fixture... September we have to discuss our legal response to the threat of lawsuit. October we wait. November we go to court. December the light burns out again...

If HOA's were to follow the meeting frequencies it could barely function or make any kind of timely decision. There are emergencies. There are threats of lawsuits. There are a bunch of outside the meeting/box issues a HOA has to address. Allowing your HOA to be a bit more flexible with being able to allow the board to make decision outside the meeting with a quorom vote makes it run so much better. The meetings then lets it be more PUBLIC and justified or not.

Create a lighting committee and delegate.

CathyA3 (Ohio)
Posts: 6,299

Posted:

Yes, one of the consequences of open meetings and complete transparency is that it can further slow down an already slow process. Many lawmakers and homeowners believe that the tradeoff is worth the cost. Except when it isn't.

I'd be astonished if there were no provision for emergencies in condos, keeping in mind that many small communities may be self-managed and may have little ability to respond promptly to such events. "Yipes, a pipe just burst!" "Slow your roll, ace - gotta notice a meeting first." "But my home is flooding!!!" "Shut off your water, gotta notice a meeting first." "But I can't live here without water!" "Go to a hotel, gotta notice a meeting first."

Anecdote: low water pressure, low flush toilets, and a single connected system in condo buildings can add up to trouble, as some in my community are finding out. If our board said "gotta have a meeting first", they'd be replaced so fast their heads would spin - because transparency seems a lot less attractive if it means living with sewage. In condominiums, any delay can have a real and actual price tag attached to it. And if the delay results in bigger insurance claims and higher premiums down the pike, the hits will keep on comin'.

There are always consequences. People who are fine with theoretical consequences often change their minds once the theoretical materializes in their own personal lives and their own personal wallets.

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By CathyA3 on 08/11/2023 5:29 AM
Yes, one of the consequences of open meetings and complete transparency is that it can further slow down an already slow process. Many lawmakers and homeowners believe that the tradeoff is worth the cost. Except when it isn't.

I'd be astonished if there were no provision for emergencies in condos, keeping in mind that many small communities may be self-managed and may have little ability to respond promptly to such events. "Yipes, a pipe just burst!" "Slow your roll, ace - gotta notice a meeting first." "But my home is flooding!!!" "Shut off your water, gotta notice a meeting first." "But I can't live here without water!" "Go to a hotel, gotta notice a meeting first."

Anecdote: low water pressure, low flush toilets, and a single connected system in condo buildings can add up to trouble, as some in my community are finding out. If our board said "gotta have a meeting first", they'd be replaced so fast their heads would spin - because transparency seems a lot less attractive if it means living with sewage. In condominiums, any delay can have a real and actual price tag attached to it. And if the delay results in bigger insurance claims and higher premiums down the pike, the hits will keep on comin'.

There are always consequences. People who are fine with theoretical consequences often change their minds once the theoretical materializes in their own personal lives and their own personal wallets.

In California there is an emergency provision per my last comment. A pipe bursting is an emergency but why wouldn't you already have a contingency plan for that?

CathyA3 (Ohio)
Posts: 6,299

Posted:

Quote:

Posted By TerriS6 on 08/11/2023 5:39 AM

In California there is an emergency provision per my last comment. A pipe bursting is an emergency but why wouldn't you already have a contingency plan for that?

We do, but other communities may not. And stuff like this can happen after hours, and we're communicating with the manager via email and text before we know the details of what's happening. Lest anyone think the board is plotting to hide things from homeowners, they're probably running around in their jammies on a cold January night to meet the emergency workers. I've done my share of it, and I'd have been much happier to avoid that nonsense altogether and deal with whatever it was at the next board meeting.

On the other hand, my state does allow action without a meeting, so it's not a big deal for us. As I'd mentioned in a different thread, we use it for emergency maintenance items which are summarized in the manager's report at the next board meeting. Nothing falls between the cracks. Anyone who believes they're missing out on something is welcome to join the Jammie Crew on their next outing.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Genius. Who do committees report to? The board. A committee can NOT spend money without board approval. Mmmm how incompetent we all must be since we do not delegate and create committees... Committees also must meet outside hours that would not be allowed using the meeting rules.

Why I wonder how a HOA runs? Plus without a management company... All board decisions made to spend the money...

Former HOA President

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By MelissaP1 on 08/11/2023 6:24 AM
Genius. Who do committees report to? The board. A committee can NOT spend money without board approval. Mmmm how incompetent we all must be since we do not delegate and create committees... Committees also must meet outside hours that would not be allowed using the meeting rules.

Why I wonder how a HOA runs? Plus without a management company... All board decisions made to spend the money...

In California, committees are not subject to the same meeting requirements.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Who gives the committee money to operate? We would have a million stupid little committees around if only way to make things happen. Is there a "my fob key does not work at the pool committee's?

Former HOA President

JamesB37 (California)
Posts: 351

Posted:

https://www.davis-stirling.com/HOME/E/Executive-committees

Executive Committee:
The term "Executive Committee" is not found in the Davis-Stirling Act or the Corporations Code. It found its way into common usage because of the nature of the committee. Unlike ad hoc committees and standing committees which are advisory in nature and don't necessarily have directors on the committees, an "Executive Committee" is any committee composed entirely of directors (with a minimum of two directors), who serve at the discretion of the board. (Corp. Code § 7212.) Persons who are not directors cannot serve on an executive committee. (Corp. Code § 7212(b).) Large organizations with large boards of directors will often form an executive committee to address day-to-day issues that may arise between board meetings. For example, Government Code § 65064.4 provides:

The board may appoint an executive committee, consisting of the chairman of the board, and not more than eight or less than four other members of the board, and such executive committee may carry on the administrative and executive functions of the board between full meetings.

For typical HOA boards of 3, 5, or 7 directors, executive committees are not needed for decisions between meetings since board members normally live onsite and can readily meet in person or via conference call. Instead, they are appointed when special circumstances arise.

A little off topic. It is my understanding that any Committee under D-S, with decision making authority, is required to keep minutes. It looks like that would apply to an Executive Committee - but is that case? (I think our HOA has one and I guarantee, they have not kept minutes)

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By JamesB37 on 08/11/2023 11:14 AM
https://www.davis-stirling.com/HOME/E/Executive-committees

Executive Committee:
The term "Executive Committee" is not found in the Davis-Stirling Act or the Corporations Code. It found its way into common usage because of the nature of the committee. Unlike ad hoc committees and standing committees which are advisory in nature and don't necessarily have directors on the committees, an "Executive Committee" is any committee composed entirely of directors (with a minimum of two directors), who serve at the discretion of the board. (Corp. Code § 7212.) Persons who are not directors cannot serve on an executive committee. (Corp. Code § 7212(b).) Large organizations with large boards of directors will often form an executive committee to address day-to-day issues that may arise between board meetings. For example, Government Code § 65064.4 provides:

The board may appoint an executive committee, consisting of the chairman of the board, and not more than eight or less than four other members of the board, and such executive committee may carry on the administrative and executive functions of the board between full meetings.

For typical HOA boards of 3, 5, or 7 directors, executive committees are not needed for decisions between meetings since board members normally live onsite and can readily meet in person or via conference call. Instead, they are appointed when special circumstances arise.

A little off topic. It is my understanding that any Committee under D-S, with decision making authority, is required to keep minutes. It looks like that would apply to an Executive Committee - but is that case? (I think our HOA has one and I guarantee, they have not kept minutes)

Decisions between meetings are illegal. Conference call illegal unless an emergency meeting which should be seldom.

TerriS6 (California)
Posts: 3,284

Posted:

https://findhoalaw.com/executive-committees/

KerryL1 (California)
Posts: 14,550

Posted:

Look, it CA fewer than a quorum of the board may meet at any time anywhere. The Board simply needs to vote to delegate to one or fewer than a quorum of directors to handle emergencies or even "my-fob-doesn't work" issues.

I can't imagine why way back in Melissa's Day she had to contact a quorum of the board if a light burned out or if a fob didn't work. In self managed HOAs, surely the board does vote to delegate certain tasks to certain directors . Melissa even cut & pasted a years-old post of hers for her example.

(James, [1] if your Calif. HOA has an "executive committee," its formation would need to have been documented in some board open meeting minutes. Its decisions, if any, may very well have been executive committee topics. [2] Since they may ONLY comprise directors, it no longer exists because the directors [except for one] were defeated in your recent election.).

JamesB37 (California)
Posts: 351

Posted:

Kerry, I think they used the name executive committee, but in reality it is more along the lines of what you stated. 2 of them have authority for day to day problems. I will have to look into it more.

AidylP1 (California)
Posts: 173

Posted:

Executive Committees handle the day-to-day decision-making up to a certain dollar figure outlined in their committee charter. It is not to handle items discussed in an executive session meeting.

If there is a 5 person board, the committee may only exist of two board members, if a board has three, then only one.

KerryL1 (California)
Posts: 14,550

Posted:

Here's my idea: If someone wants to start a thread on "executive committees" in CA or anywhere, that's a good idea. It's not the topic of this thread. In this new thread, Aidy can cite their Bylaws or CA codes on executive committees.

James, you should not look into your executive committee further because your HOA does NOT have one. It ONLY may be comprised of directors and your previous directors were just defeated in an election. I'm baffled why you're using the present tense "they have authority," when, in fact, they have ZERO.. I urge you to avoid that rabbit hole at this time when you have far more urgent work to do as a new director on a new Board. It's very clear that you & your new Board must craft a list of priorities at an open board meeting and vote on them.

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