Board meetings and Annual Meetings

that's the way most boards do it, IME. However, there is rarely money spent in an annual meeting; usually, the only order of business in those is to elect board members. If your HOA is doing more than that, I would suggest holding separate meetings of the owners: One to elect members to the board. THen a separate, special one to make decisions on spending money, special assessments, etc (the spending that your HOA is doing via approval of the owners, not the normal spending done via board approval). Keeping them separate allows the flow of the meetings to remain pure, and the minutes to be kept better, etc..

It can also prevent reopening old wounds once again every year, as you read the minutes of the last annual meeting. BTDT, Oy Vey!

I don't see why you would want to have several meetings, one annual other special, to accomplish what you can in one. If you know all the topics for the annual meeting, why separate the actions. This only costs the HOA more to setup, notify and conduct. Also, you have a high probability of not reaching a quorum on subsequent meetings. I see no upside.

RobertG,
Oh, I agree that is how it is done, as I said. I just want to know if it is legal?

I answered Brian because when you approve the Budget, you approve the spending of funds. I don't see how you can rationalize anything else.
I have a feeling since it is customary (if it is) to do it this way, there is more to this than I know. When I know, then I will be smarter than I am. At least for 24 hours when I might forget it.

Dd Dd Da DD Donna, I stutter,

Well that just confuses the picture further. Our documents call for the annual meeting and a regular Board Meeting, at least quarterly for the year. If the Annual Meeting is not to be considered a Board Meeting and in Florida all meetings are by Law Open, then there is really no difference in any meeting except the agenda, which changes with every meeting. Tell me what you think a motion at the end of an Annual Board meeting; to Ratify the Boards actions in the meeting, means.

I just thought someone could explain all this. This is not the first time we have run up against some conflict with documents and different acts of the Boards, because of interpertation, and there is really no place to go for clarification. So I guess we are back to the point we reached a couple times about what is right or wrong, and we decided maybe it is time for the Feds to take a hand and write some laws that serve as Doctrines for HOAs too follow. There really should be something. HOA's have so many people living in them, they are like some odd utility corporation. I can see the day when someone will start an AARP like organization for HOA's. Donna, you can be the CEO and Paul can be the Chairman, like Chairman Mao, he can be Chairman Paul.

RobertG,
I humbly apologize for my uncaring remark. I have no excuse and no reply other that it was cruel of me to make the remark. You can be assured, you have put me in my place, and I doubt I will be as foolish again.

I also am sorry that you would feel you have to effect the site because of my remarks. This site would not condone such words as I posted so please reconsider your refusal to post here again. The site is not to be blamed, I am.

Bruce,
I haaven't yet looked around at the website, but just reading fast through your post, you have answered my concern, and I thank you.

I agrre with your reasoning and feel the Board should approve the annual meeting as soon as possible.

Any comment about, what if they don't is the expenditure of funds with no approval of the minutes correct or illegal.

Also Bruce, please llok at my latest post and give me your opinion.

Thanks again, a big help.

RobertR1,
I'm glad you found the information useful.

I must head out now, but I will answer your question after I return. As for your "latest post", does that concern the question on proxies? If so, I will address that as well later.
Bruce

RobertR1.
OK I'm back.

I think you were asking me about annual meetings, and I assume this is where the budget is presented and you are wondering if it's OK to spend the money identified in the budget before the minutes are approved? Is that it?

OK. Well, first, let me ask, do the homeowners at the annual meeting APPROVE the budget? Or do they RATIFY it? It's not the same thing. I don't think it's the former because I think that would be unusual. Our state law allows for the fact that most homeowners are going to be apathetic, and therefore our process calls for the homeowners to RATIFY the budget, which they do by not voting to REJECT the budget. How's that for confusion? Let me go through our process step-by-step:

1. The board comes up with a budget and establishes the association fee for the coming year.
2. The board then votes on the budget. A majority vote of the board ADOPTS or approves the budget.
3. The budget adopted by the board is mailed to all the homeowners along with a notice of an annual meeting.
4. At the annual meeting, the budget is described to the homeowners. They are allowed to ask questions, which are answered.
5. After the Q&A period, the homeowners vote whether or not to reject the budget.

Now, and this is the tricky part - Because our state law is designed for apathetic homeowners, to reject the budget requires a majority vote of ALL the homeowners, even if there is no quorum present! In other words, if there are 100 homes, then it would require 51 votes to reject the budget. Now, let's say a quorum is 20%, or 20 members, and suppose only 10 homeowners show up, so that there is no quorum. We can still hold the vote, and even if all 10 homeowners who showed up vote to reject the budget, it is still ratified. In reality, the board determines the budget! Now, none of this may apply to you, but it is one example, and I believe it is similar in at least 6 states.

Back to your problem, the annual meeting. That's not too difficult. If you are concerned about having the minutes of the annual meeting approved before you start spending any money, try this one out:

1. Annual meeting - homeowners approve or ratify annual budget and then elect a new board.
2. Within a couple of weeks after the annual meeting the new board meets (organizational meeting) and elects its officers. The organizational meeting is adjourned and the first regular meeting is immediately called to order. At this, the first regular meeting, the board approves the minutes of the annual meeting of the homeowners held two weeks earlier. Job done!

Now, for the issue of proxies.

Confusion comes about because proxies are sometimes confused with absentee votes, or ballots. They are not the same thing.

An absentee ballot is simply a form on which officers and candidates for office are listed, along with questions on any issues that must be voted on. It is evey way identical to the ballot that will be used in the election, or at the upcoming meeting. It allows people to vote if they cannot attend. It is completed by the member, sealed, and then submitted. During the actual election, after all ballots have been collected, the absentee ballots are opened and counted along with the ballots cast at the meeting. Absentee ballots must be authorized in the bylaws. Absentee ballots are not practical in board elections because at the meeting, nominations can be made from the floor, and there is no way for those names to be known by the absentee voter becaue he or she has already completed the ballot and sent it in.

Proxies are a way around this. A proxy is not a vote at all. A proxy is a power of attorney given to someone to act in a members's place. If your documents allow it, a proxy can be anybody - even a non-homeowner. A proxy attends the meeting in place of the homeowner, can make motions on behalf of the homeowner, and can vote on all motions or issues on behalf of the homeowner. You might look at it this way - a proxy is is substitute homeowner!

Normally, the proxy is another homeowner; maybe a neighbor or a friend. Let's say that it is a homeowner, and that he has been givin 3 proxies. That homeowner then has 4 votes! He has his own vote, plus 3 proxy votes, on each and every issue. And, unless he has been given specific instructions on how to vote on each issue, the person executing the proxy can cast his vote or votes (depending on the number of proxies he has) in any way he chooses!

Do you own stock? Now you know why boards of directors want you to send them your proxies for general stockholders meetings. If unspecified, it allows THEM to cast YOUR votes the way THEY want.

I hope this all helps.

RobertR1,
I think there’s still some confusion about proxies. Proxies are not the same as absentee ballots.

You say that proxies are not covered in your state statute. Is your HOA incorporated? Have you checked the state statutes on corporations? That’s where you should find the information on proxies. You will not find anything about proxies in your state laws concerning community associations, nor are you likely to find much, if anything, in your Declaration or CCRs. If they are covered in your bylaws, more information will be found in your state laws concerning corporations.

Here’s what I found about proxies in South Carolina’s law concerning non-profit corporations. There’s more, but the first two parts may interest you:

SECTION 33-31-724. Proxies.

(a) Unless the articles or bylaws prohibit or limit proxy voting, a member may appoint a proxy to vote or otherwise act for the member by signing an appointment form either personally or by an attorney-in-fact.

(b) An appointment of a proxy is effective when received by the secretary or other officer or agent authorized to tabulate votes. An appointment is valid for eleven months unless a different period is expressly provided in the appointment form. However, no proxy is valid for more than three years from its date of execution.

As I said before, a proxy is a power of attorney, which, if you read carefully, is what is being said here (“appointment of a proxy”). It is a document that is signed by a person (in this case, a homeowner) appointing someone else to cast a ballot (or ballots) for the person (homeowner) who signed the document. Unless the proxy (appointed person) is given specific instructions on how to vote, the proxy may vote any way he or she pleases. The board could be given a proxy, and in this case, the board, acting as a single person, would cast a ballot for the homeowner. The proxy can include instructions on how the homeowner wishes the proxy holder to vote. This could be the “paper proxy” you are referring to. Proxies can only be used for meetings of the homeowners. Generally speaking, proxies are not allowed for meetings of the board. If the members (homeowners) elect the directors (members) to the board and ratify the budget, proxies can be used for both purposes. If the board elects the officers, proxies cannot be used for that purpose because officers are elected by the board and not by the homeowners.

Talk to someone who owns some stock in a corporation. I’m sure they have received proxy authorization forms in the mail along with notices of annual stockholder meetings. Proxies for incorporated HOAs are not much different.

Robert’s Rules does not have much to say about proxies, and devotes less than a page to the topic. This is because proxy voting is not truly democratic and has almost no place in a deliberative assembly. It is generally discouraged, except where the law may require it, as in corporate law. There, it is used as a means of voting to enable people who cannot make annual meetings (ie, shareholders who live great distances) to vote at the annual meetings of homeowners. For HOAs, it is used to enable homeowners to vote at annual meetings who cannot, or wish not, to attend the annual meeting.

Yes - generally proxies are included when determining the members present at the meeting for the puroposes of a quorum.

I don't know what you are referring to when you speak of "election ballot" and "officer ballot". As I said, a proxy is a power of attorney that exists for a period of time (often a year). So, the person who is appointed as a proxy can vote on any question on which the member who appointed the proxy could vote on.

Think of a proxy as a person. It's a person who has the authority to vote in place of a "shareholder" (homeowner) who is not present at the meeting.

Thanks Bruce,
Our By-laws happen to mention Proxies and says they can be used.
Problem with that is, the powers that are just decide what and how the proxie is written and mailed out. We also allow nominations from the floor or write in votes which to ma make the whole business suspect. Also our By-laws don't mention limited Proxies.

I picked the below off a web site and it seems to be a little more understandable. But my biggest problem is with procedures and the acts of the board with just writing somethind down and saying, this is how we are going to do it.

proxy voting
A proxy vote can be cast when one member has given written authorization for another member (or nonmember) to vote on his/her behalf. Proxy voting is not allowed unless expressly authorized in the bylaws. The format of the written authorization for a proxy vote may be given in the bylaws. When the bylaws include a provision for proxy voting, they frequently limit the number of proxy votes one person may carry, as well as whether the person carrying the proxy must be a member, so be sure to check that in advance of the meeting. This proxy vote is only counted in determining a quorum for the meeting if so stated in the bylaws.
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Our by-laws do not specify anything abour what a proxy is to be used for.