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Board meeting or not?

Started by DonaldM3 ā€¢ 29 replies ā€¢ 1695 views

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DonaldM3 (South Carolina)
Posts: 132
Posted:
At a recent BoD meeting for our HOA, which I attended as an observer and non-participant, had only two, out of five board members, in attendance. In attendance were the President and the Secretary. The primary topic of the evening was the 2009 budget ā€“ with the Treasurer being absent. Not having a quorum they called another board member (member-at-large); they put this board member on speaker phone and proceeded to have a board meeting.

Regarding a quorum, our docs say, ā€œAt all meetings of the Board of Directors, a majority of the Directors shall constitute a quorum for the transaction of business, and the votes of a majority of the Directors present at a meeting at which a quorum is present shall constitute the decision of the Board of Directors.

My question is, considering that there were two board members physically present and one on the telephone, was it a valid board meeting?
GerryH (DE)
Posts: 43
Posted:
I would think it would depend upon how your by-laws define who attends a meeting. What I mean is if the docs allow attendance via phone. Some do.
RobertR1 (South Carolina)
Posts: 5,164
Posted:
Donald,
To me, provided there are references in your documents that allow teleconference meetings, it would be a meeting. At the begining of the meeting, before the meeting starts, preparations are made to insure that when the president act to declare a quorum, a roll is called and each BOD answers present and if not physically at the meeting declares his presence by stating he is on telephone. The the President declares the meeting open and starts business.
Why do you consider yourself a non-participant? Does your Board official acknowledge each and every member present at the meeting or on speaker phone? They should and they should allow for each association member present a specific time that allows for any comments from the floor. There should be no unrecognized person present at the meeting and all should register which in effect announces their presence.

I would also believe at this day and age that even if teleconferencing was not in your documents and the fact was announced at the opening of the meeting, it would be allowed by the courts.
DonaldM3 (South Carolina)
Posts: 132
Posted:
Thanks Gerry, I am aware that some do allow phone participation but I have not been able to find anything in our docs that refer to the use of a phone (or other) to participate.
DanaB1 (Connecticut)
Posts: 319
Posted:
Donald, in the end were they able to accomplish anything? Trying to accomplish a budget meeting can be difficult without the treasurer. Did they adopt a budget? Why do you feel they didn't just reschedule the meeting? Do they always have problems getting even board members to show up? Why do you feel the need to attend board meetings? Would you like to be a board member?

Thanks for your input.

Dana

DonaldM3 (South Carolina)
Posts: 132
Posted:
Robert, as I stated, I could find no references in our docs to teleconferencing (or other) for our meetings. Our board meetings are held at our PMā€™s office. When she (the PM) determined that there was not going to be a quorum, she called the home of a board member and after determining the board member was available, put her on speaker phone. The meeting was then opened.

I consider myself a non-participant because the PM and board considers non-board HOā€™s non-participants. HOā€™s attending board meetings are generally not acknowledged until the end of the meeting where we are sometimes allowed to comment (if they remember).
From your comment, I take it you would consider it a valid meeting. Thank you!

Dana,

No, very little was accomplished to my disappointment. There were no motions or votes. The budget was discussed but no conclusions were made. Yes, there is, IMO a problem with board attendance but that was the first, that I am aware of, that they did not have a quorum. I, and a few others, commonly attend board meetings because we are unhappy regarding what gets done and how it gets done. They probably did not reschedule because it is difficult to get such a quarterly meeting together. The PM dominates our meetings and commonly runs them even though our covenants state that boards will be presided over by the President.

No, I really donā€™t want to be a board member again. I suspect they do not want me on the board anyway as they probably see me as a thorn ā€“ I basically donā€™t like the way they operate (minutes are not posted, there is no newsletter, board meetings are not announced, things in the community donā€™t get done and their leadership is poor (my biased opinion)). We are a community of 149 single family dwellings.

Thank you for your response but you failed to answer my question.

Don
RobertR1 (South Carolina)
Posts: 5,164
Posted:
Donald and Dana,
First: My question is, considering that there were two board members physically present and one on the telephone, was it a valid board meeting?

That was your question Donald. My answer is "Yes".

I think as you answer to me and Dana, this post is starting to unpeel like an onion. Don't you think it is possible for your BOD to have problems and still hold a valid meeting? After your latest is added to your first, suddenly the validy of a single meeting, doesn't seem very significant to me and it certainly is not the root of your problems. Read through your post and list the problems you are describing and throw in the fact you are a dissatified ex Board member and you do have some problems.

If I was in your shoes I would have some problems also. But I assume that is your real concern and maybe you are looking for ways to tack their hide to the shed door. Common action and reactions as I am sure you know. None of this is said to cast suspecision on your motives or to pick a side. I see a long standing organization, nothing unique, but with the same old problems all entrenched Boards have, to the detriment of the members. Your PM conducting the Board Meeting is a sure fire red flag. She could be the best PM is the whole world, but her job is not to conduct Board Meetings, even if the President of the Board allows it. Your documents will state that the President presides. So maybe that would be a good place for you to make a change. I doubt you get minutes published as directed by your documents, just as starters. You know all these problems better than I. Are you the one to begin change, now that is a BIG question and you also would know that. So give it some thought, examine how much you can effect and see how you can muster up the troops to do the job. Your association, like all associations is in constant flux. it changes by the second, if you can insert your cause into the mainstream, you then stand a chance to mold and direct the power of the whole. A long hard job, but as the man says, "Pay me now or pay me latter, you still got to pay."

BruceF1 (Connecticut)
Posts: 2,535
Posted:
Donald,

It might also depend on the laws in your state. Connecticut corporate law, for example, allows for members not to be physically present, and speakerphone or teleconferencing is permitted. I believe the general rule of thumb is "present" is defined as able to participate in debate and discussion. A speakerphone would qualify, a hand-held telephone probably would not.
DonaldM3 (South Carolina)
Posts: 132
Posted:
Point taken Bruce, thanks! I donā€™t believe though that that issue is covered in SC laws and considering Robert is also from SC I suspect he would have picked up on that point.

Robert,

ā€œDon't you think it is possible for your BOD to have problems and still hold a valid meeting?ā€

Yes I do, one has nothing to do with the other. I understood your answer from your above post; my re-question was directed at Dana. And yes, my other concerns (the inability of the board to accomplish very much and then sometimes in an incorrect manner are, as I see it, the real problem.

A HOA meeting was scheduled for this past Thursday but was not held because a quorum (60%) was not met. I had intended on calling a point-of-order at this meeting.- a few months ago a contract was suddenly given to our MC (the MC established by our developer who pulled stakes this past year). After reviewing minutes at the PM office, I could find no motion, discussion or vote for this action (or a management company study). My point-of-order was intended to learn how this action was taken and if it was not done right to expose the board's meandering to the mostly apathetic membership. Within a week after the contract was given, landscapers, who work for the MC, were in the yard of the President planting a couple of tall palm trees. Although probably (??) on the up-and-up, it does not present a pretty picture. There are other more minor such instances but my intent is not to degrade the BoD but to try to get them on track and to take their fiduciary duties seriously.

Youā€™re right about the PM. She is nice and seems 'sort of' well versed but has a ā€˜take-overā€™ attitude if/when an opportunity presents itself. She has, I feel, misdirected our BoD on occasion; I understand that her top priority is her bottom line (as it should be).

Thanks for the discourse!

Don
GlenL (Ohio)
Posts: 5,491
Posted:
Donald, Ohio has a law specifically allowing BOD meetings via teleconferencing for COA's but the easiest way to determine whether or not it is allowed is to simply ask the BOD or PM for the statute or By-law that allows it. If you approach them in a non-confrontational manor and simply ask, I'm sure they would point you in the right direction. I think your bigger problem is not how they conduct the meeting but the fact that they accomplish nothing.
Studies show that 5 out of 4 people have problems with fractions
BruceF1 (Connecticut)
Posts: 2,535
Posted:
Quote:
Posted By DonaldM3 on 12/07/2008 4:01 AM
A HOA meeting was scheduled for this past Thursday but was not held because a quorum (60%) was not met. I had intended on calling a point-of-order at this meeting.- a few months ago a contract was suddenly given to our MC (the MC established by our developer who pulled stakes this past year). After reviewing minutes at the PM office, I could find no motion, discussion or vote for this action (or a management company study). My point-of-order was intended to learn how this action was taken and if it was not done right to expose the board's meandering to the mostly apathetic membership.

According to accepted parliamentary practice you can call a point of order only at the time the questionable act occurs. You can't call a point of order at a later meeting, or even at the same meeting at a later time. Upon observing something you believe to be out of order and the president fails to notice it, you must immediately rise, interrupting the speaker, and state "point of order." The president must recognize you and ask what your point of order is. The president then rules on your point of order. If you disagree with the president's ruling, you can appeal to the membership to overrule the president. I'm not sure, but I think that it takes a 2/3 vote to overrule the president.

What's done during past meetings is done. The correct way to undo it or change it is to introduce a motion to amend or rescind the motion that passed at the previous meeting. That requires a larger majority than the original motion that passed.
RobertR1 (South Carolina)
Posts: 5,164
Posted:
Don,
In a perfect world you might be able to change the Board and get them and the M/C back on track by out-parlimentarium (sic)them but don't bet any money on this horse. Many of us posting here have been or are in your sandals. Believe me we have tilted with more Windmills than Don Q. Thus we are able maybe to see the playing field a little better. I am talking years of banging my head against the Board's castle. Our failure was in part we just didn't go about the job the right way, so we changed tactics. Somewhere in our orgaization there are folks that feel as you do, there may be only a few, but they are there. In my instance I found I accomplished little, not that I stopped because of it, but I felt there were not beating me and I would wear them down. What I didn't realize that all my flailing around took time, years passed. I won some and lost some. But through out this time I started to understand that maybe I should spend some effort in attaching myself to those few folks that over the years demonstrated some interest in the place. We started with a web site. This of course upset the Board seriously and they were vocal about it. Long story short, we cracked the shell and little by little we got what we wanted. It took three years but the last of the old Board leaves in the spring. Credit for this does not belong to me, it belongs to a couple other owners who were sharp enough to know how to play the game better that our entrenched board. Now, we stand a chance and we are building on what we gained. The changes are not primarily changes you see but changes in how the business of running the Board is conducted. Our complex like all condo requires constant attention and actions that are just there day to day and things crop up unexpectantly that have to be dealt with but now we are confident any owner can find out what exactly is going on and where exactly is the money going. They got a question, they know they will receive a response from the Board. They can go to the web site and see our Budget, our minuites, our reports, our committee reports and minutes and they can follow any project that is ongoing, all they need is the desire to know. It can be done, it can work, it is just the trick of finding the right person for the job and it turned out to be, I was not the one. I just helped.

I wish you good fortune and lots of luck.
RobertR1 (South Carolina)
Posts: 5,164
Posted:
Don,
Bruce's last post is exactly what I am talking about, maybe you can convince Bruce to move to your association.
BruceF1 (Connecticut)
Posts: 2,535
Posted:
Quote:
Posted By RobertR1 on 12/07/2008 5:18 AM
Don,
Bruce's last post is exactly what I am talking about, maybe you can convince Bruce to move to your association.

Well, it IS warmer down there and you don't get much snow, at least, I don't think so. Today I would like that.
DonaldM3 (South Carolina)
Posts: 132
Posted:
Bruce, it happens there is a nice home down the street from me that is for sale! Send me your email address and I'll forward you the particulars.

Thanks all for the great inputs. One can depend on getting a variety of numerous and adept responses on this site!
RobertR1 (South Carolina)
Posts: 5,164
Posted:
Donald,
Where are you from in SC?
I am east of Beaufort about 20 miles, last barrier island. Not Hilton Head.
DonaldM3 (South Carolina)
Posts: 132
Posted:
Mailing address is Longs, SC. We live across the Inter Coastal Waterway from the northern part of Myrtle Beach (about 7 miles from the beach). A location I'm sure Bruce would find to his liking - although I grew up in Wisconsin, I get cold just thinking about Connecticut (brrrrrr!).
DonnaS (Tennessee)
Posts: 5,671
Posted:

Donald,

Wisconsin??? I am MIlwaukee native, then South Florida and now Tennessee. (Packers, Titans, Dolfins,? and Jets?(Brett)
DonaldM3 (South Carolina)
Posts: 132
Posted:
Hey Donna,

Oshkosh but still l luv the Pack
DanaB1 (Connecticut)
Posts: 319
Posted:
Donald,

I didn't answer your question; you are correct. I live in Ct. and there are many very astute people on this website that I felt could. I ask questions to be able to see the whole picture. As you answered my questions I was able to see a much bigger view of the issues at your complex. That helps me to understand the sometimes slanted views of posters and it also helps other "lurkers" here to get educated. "A lurker being a person that wants info and reads all the posts but is afraid to post themselves.(There are many of these people and I don't think poorly of them.)"

I'm sorry for you that your association is not run well and that apathy is easier than fixing problems. I pretty much have the same story as Robert. I worked with the old board until enough people got tired of the poorly way things were done and we threw them out.

As far as the manager running the meeting. I've seen boards let the manager run a meeting due to the fact that every board member was too intimidated to do it. I don't see it being an extremely bad thing as long as the manager knows what they are doing and still leaves the decision making to the board.

Now that I know your in Longs, SC may I ask if the word "Colonial" is anywhere in your association's name? If it is than this really is a small world, I have a friend that is a President in Longs and a father-in-law living there also. In a neighboring association I read on the website minutes that the board has been taking money from reserves in lieu of raising common fees. They actually think this makes sense? How will they pay for future projects?

Many associations are in trouble due to uneducated boards. And yours is only going to get worse unless something is done. The solution is never easy. I work my butt off as President, we have a new board..........but guess what? Only a few of us roll up our sleeves every month and do the work. It ain't easy.

Dana

DanaB1 (Connecticut)
Posts: 319
Posted:
Quote:
Posted By DanaB1 on 12/07/2008 10:50 AM
Donald,

That helps me to understand the sometimes slanted views of posters


In no way am I saying that you are slanted. Perhaps that wasn't the best wording. I like to see the whole picture of an association.

Is the board trying but they just don't know protocol? That type of thing. Or are they just single minded and rules be damned.

Dana
DonnaS (Tennessee)
Posts: 5,671
Posted:

Donald,
Sorry that it took so long to answer this. I looked up the South Carolina Code of Laws which is your Incorporation laws. This is what I found.

"SECTION 33-31-820. Regular and special meetings.

((b) A board of directors may hold regular or special meetings in or out of this State.

(c) Unless the articles or bylaws provide otherwise, a board may permit any or all directors to participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication by which all directors participating may hear each other simultaneously during the meeting. A director participating in a meeting by this means is deemed to be present in person at the meeting"

That seems to mean to me that "YES" a Director may participate by phone or other electronic means.
RobertR1 (South Carolina)
Posts: 5,164
Posted:
Donald and Dana,
I also recognize the area you live in, Longs, SC. I have a son that owns some Property in Long Beach and SouthPort. He recently bought a Condo in Southport and uses it to give the kids a place to come to from school and a place when he and/or wife pass throught this way from Hong Kong. Sad to say, they both have no interest in the operation of their condo. Say they just live too far away and what can they do about anything. From what little they know that they tell me and the present economic situation they may be finding out all about their place in the near future. I look for a huge dues increase by developer and then some signs of a shaky developer. Funny, my kids believe if a lot of their units are owed by Investor Real Estate Agents they are immune to any crises and the Real Estate agents would keep their values up. Well values have fallen nearly i/3 and it is getting time for the other shoe to drop. I'll never know it unless I would go up there and stay a while in their place (which I could do, but can't because of other issues). I do believe if folks can weather the storm and receive some attention from the state legislatures all will get better over time.
We here have been very lucky and seem to have avoided foreclosures so far. Values are another matter and we are no exception. I bought my place in 1990 during the Savings Loan crises, so I am working on a pretty good buffer in front of my initial expenditure.....not skill, just luck.

Mrytle Beach, from Georgetown to the NC border just scares me to pieces. I can remember coming to Mrytle Beach and finding only one or two motels open in the winter. Nothing there and that was a long time ago.
RobertR1 (South Carolina)
Posts: 5,164
Posted:
Whoops,
Thank you Donna for putting the cap on things.
I think I am going to make a rubber stamp that says, "Thank you Donna", and just stamp my replies. But wait, that was another time and another place, and I can't do that anymore.
DonaldM3 (South Carolina)
Posts: 132
Posted:
Once again I need to thank everyone! I think my issue has been thoroughly picked apart massaged, manipulated, answered, and put to bed. And, Dana youā€™re right ā€“ Iā€™ve considered ā€œapathyā€ the scourge of HOAā€™s but itā€™s also very clearly ā€œeducationā€; that, however is where the Management Company should play in. I donā€™t think they should take over but certainly they should educating neophyte board members on how to run a meeting. For an neophyte President, there are plenty of books out there also that will help if you want to learn to do things the right way. I think a board member has no business saying ā€œyesā€ to being on a board or to being President if they donā€™t have the time or the interest in fulfilling their FIDUCIARY DUTY (capitalized because itā€™s that important!). Iā€™ve used the term in my community but I donā€™t think that any of our board members knows what it means or cares to find out.

Donna, you really nailed it! I should have been able to Google my answer but I failed. I get on these legalized sites and start reading all that legal mumbo jumbo and before I get to the third paragraph I want to strangle my monitor. I spend time in the court room regularly with the legal jargon (some volunteer work I do) and itā€™s not nearly as bad hearing it in the court room than when you have to read it! So, I will not hold it against you that you abandoned the Pack ā€“ (ohhh, maybe just a little).

Dana, Iā€™ve passed a community around here with the name ā€œColonialā€ in the name and I think itā€™s the Colonial Charters and I think itā€™s on Route 90; is that it? I live off Rt. 90 but probably about 8 miles SW of Colonial Charters.

Thank you again everyone. Funny how it feels like youā€™re making friends on here but you never meet anyone.

Can anyone give me a good divination of "Fiduciary Duty" as it applies to HOA's (sort of short and concise). Does this need a new thread?

Don
DonaldM3 (South Carolina)
Posts: 132
Posted:
Of course that's supposed to be "defiOnce again I need to thank everyone! I think my issue has been thoroughly picked apart massaged, manipulated, answered, and put to bed. And, Dana youā€™re right ā€“ Iā€™ve considered ā€œapathyā€ the scourge of HOAā€™s but itā€™s also very clearly ā€œeducationā€; that, however is where the Management Company should play in. I donā€™t think they should take over but certainly they should educating neophyte board members on how to run a meeting. For an neophyte President, there are plenty of books out there also that will help if you want to learn to do things the right way. I think a board member has no business saying ā€œyesā€ to being on a board or to being President if they donā€™t have the time or the interest in fulfilling their FIDUCIARY DUTY (capitalized because itā€™s that important!). Iā€™ve used the term in my community but I donā€™t think that any of our board members knows what it means or cares to find out.

Donna, you really nailed it! I should have been able to Google my answer but I failed. I get on these legalized sites and start reading all that legal mumbo jumbo and before I get to the third paragraph I want to strangle my monitor. I spend time in the court room regularly with the legal jargon (some volunteer work I do) and itā€™s not nearly as bad hearing it in the court room than when you have to read it! So, I will not hold it against you that you abandoned the Pack ā€“ (ohhh, maybe just a little).

Dana, Iā€™ve passed a community around here with the name ā€œColonialā€ in the name and I think itā€™s the Colonial Charters and I think itā€™s on Route 90; is that it? I live off Rt. 90 but probably about 8 miles SW of Colonial Charters.

Thank you again everyone. Funny how it feels like youā€™re making friends on here but you never meet anyone.

Can anyone give me a good definition of "Fiduciary Duty" that's sort of short and concise or should I be starting another thread?

Don
DonaldM3 (South Carolina)
Posts: 132
Posted:
Sorry, not sure what happened her but I attempted to correct my spelling of "definition" and a bunch of gobbley gook came out.
DonnaS (Tennessee)
Posts: 5,671
Posted:

Donald,

"I will not hold it against you that you abandoned the Pack ā€“ (ohhh, maybe just a little)." Animal Planet Fact: Alpha female has to hunt to feed the pack.

GlenL (Ohio)
Posts: 5,491
Posted:
Quote:
Posted By DonaldM3 on 12/07/2008 1:45 PM

Can anyone give me a good definition of "Fiduciary Duty" that's sort of short and concise or should I be starting another thread?

Don

From the The 'Lectric Law Library's Legal Lexicon:

FIDUCIARY DUTY - An obligation to act in the best interest of another party. For instance, a corporation's board member has a fiduciary duty to the shareholders, a trustee has a fiduciary duty to the trust's beneficiaries, and an attorney has a fiduciary duty to a client.

A fiduciary obligation exists whenever one person, the client, places special trust and confidence in another person and relies upon that person, the fiduciary, to exercise his discretion or expertise in acting for the client; and the fiduciary knowingly accepts that trust and confidence and thereafter undertakes to act in behalf of the client by exercising his, the fiduciary's, own discretion and expertise.

From our Welcome to the Board packet:
As an elected Member of the board, you have an obligation to protect, preserve, and enhance the Associationā€™s property in accordance with the Associationā€™s governing documents. These along with any applicable State and Federal laws are the primary basis or source for the definitions and scope of the Boardā€™s power and responsibilities.

The Board of Trustees has a fiduciary duty to the Association and owners, and must discharge their duties in ā€œgood faithā€ with diligence, care and skill. The Board of Trustees exercises control over the affairs of the membership, and based on this relationship, the Directors of the Association owe a fiduciary duty to its members.

A Trustee has a duty of undivided loyalty to the Association and its membership. This higher standard of performance is breached when a Trustee acts in his/her own interest or with a conflicting interest. Stated succinctly, Trustees owe a duty of care to the Association and its members and will not be liable for mere mistakes in judgment so long as they were acting in good faith and had a rational basis for their decision.

Of all the components that make up a Homeowners Association, only the Board of Trustees has a fiduciary duty individually and collectively, as you have been entrusted with the care, protection and use of someone elseā€™s property.
Studies show that 5 out of 4 people have problems with fractions
RobertR1 (South Carolina)
Posts: 5,164
Posted:
Good reply Glen,

Of interest to me is the content from your Welcome to the Board Packet.

Mention is made of fiduciary responsibility to "Property". I don't think "property" is consider by many when they are talking HOA's. It is of course much more important when talking Condos. In condos it may over ride all other considerations in view that the property can be of far greater value than "Cash Money". I know in our condo it is a hard sell to convince owners that their value is not tied up in their "Units" as nuch as value being directly connected to the property as a whole. They fuss and fume sometimes about the financies and resist strongly effort made to protect the prop-erty, be it insurance, maintainance, reserves, or long range plan. Some of the reason for this is the absentee owners in condos have no long range expectations in the property.

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