Board not following proper procedures

I've opened up a can of worms and I now am looking for some advice. Let me provide some background. This may get lengthy, so I ask that you bear with me.

My wife and I live in a 80 unit townhouse development in Danbury, CT. Our community has a HOA and is governed by a Board that is currently being transitioned from Declarant control to Unit Owner control. Of the three member board, two are Unit Owners, one is the Declarant.

Last week, I attended a meeting of the Association's Board of Directors. I watched as numerous decisions were made that have a financial, and possibly legal impact on the Association. These decisions included such items as proceeding with foreclosure proceedings on a unit that has been delinquent in paying common charges, choosing a vendor to powerwash and seal all of the unit's decks (Limited Common Elements), issuance of several violation notices as well as a few other corporate actions.

Later that evening, while I was lying in bed, it struck me that something was awry with that meeting. First, there was no roll call, reading of the minutes and other procedures and formalities that are detailed in our Bylaws. But, what really bothered me is that I didn't remember any actual votes being cast before an action was determined to be taken.

The next day, I contacted the representative from the management company who was present at this meeting. I asked specifically for the names of the members of the Board of Directors and a list of the directors that were present at the meeting. I was given the name of the three (3) Directors that are on the Board and I was notified that only one was present at the meeting. This individual is one of the Unit Owner Directors. Well, I went straight to the Bylaws and found this Section (included in its entirety for reference):

"Section 2.12 - Quorum of Directors. At all meetings of the Executive Board, a majority of the Directors shall constitute a quorum for the transaction of business, and the Votes of a majority of those Directors present at a meeting at which a quorum is present shall constitute the decision of the meeting. If, at any meeting, there shall be less than a quorum present, a majority of those present may adjourn the meeting from time to time. At any adjourned meeting at which a quorum is present any business which might have been transacted at the meeting originally called may be transacted without further notice."

Well, I'm not a math whiz, but I believe that having only one out of three Directors present does not constitute a majority. I sent an email to the management company asking them to inform the Board of my findings and respectfully requested that they take proper action to rectify this mis-step. I didn't ask for any of the decisions made at the meeting be nullified. I just requested that they regroup with a quorum present and follow proper procedure before committing the Association to any corporate actions. I received this response:

“At the meeting, you attended the issues that were discussed were open items from the last meeting, and the board wanted little more info prior to going forwarded. If needed I can email (edit, Declarant Director) and (edit, Unit Owner Director 2) and have all these issues wrap up through email.”

Another quick visit to the Bylaws revealed that there is a specific requirement that Board meetings be held at a physical location and a quorum of Directors be “present”. I notified them of this when I responded to the email. I have not yet received a reply. Also, in conversation with one of Unit Owner Board members, I was told that “we make decisions via email all the time”.

We are at a critical time for our HOA. I feel that we should not allow precedents to be set due to a lackadaisical attitude towards following written policies and procedures exhibited by the Board.

Am I right, or am I mistaken? Should I just shut up and allow things to continue? Or, should some action be taken?

Any recommendations or comments would be appreciated.

Regards,

Paul

Paul, you are correct that no Board meeting occured and thus no official action could be taken based on that action. However, the 3 actual Board members may be allowed, depending on your By-laws, to make decisions via emails or conference calls, without holding a Board meeting. These actions should be recorded in the next real Board meeting. If I felt a critical decision was made at that meeting I would respectfully advise the President of the Board that you request an "official" Board meeting be held. Otherwise, I would simply request that in the future the Board should comply with the By-laws. These Board members should be thankful for your input since they are opening themselves to risk.

The problem, as you may be aware, is besides being improper conduct this can have serious legal implications. In a court hearing your HOA's minutes which have been approved at a subsequent Board meeting can be critical. These Board members could be held liable for wrongdoing.

In Connecticut there is no sunshine law. Whether or not the meeting is open is in the documents. To answer many of your questions go to

http://www.cga.ct.gov/2005/pub/Chap828.htm

To hold meetings by email should be avoided.

Lack of proper minutes leaves your board open to lawsuits. Especially in the case of foreclosures, without proper documentation they could be in big trouble.

I'm not impressed with your manager to let this happen but then again they get caught in the middle.

With 80 units your documents only call for 3 board members?

What do other owners say about this situation or are they totally asleep at the wheel?

Paul,

I suggest that you put your concerns about the conduct of board business without a quorum in writing. Send this letter to the members of the board as certified mail with return receipt. This way you have proof that the board members were made aware of your concerns. This documentation may prove important later on.