Annual Meeting Question about Delinquent Dues Owners

We are a small association (9 townhouse units). We have 3 owners who are delinguent on their dues. Our annual meeting is in Jan. 2010. Our rules state if a member is delinquent, they cannot vote. I will ask the officers if any owners are delinquent and then make a motion they be excluded from voting. But can they be barred from expressing their opinions on how funds should be spent when they are delinquent in their dues?

I don't have a problem with them being at the meeting. I just don't want them to extend the meeting by trying to sway members' votes on how the money should be spent.

Joanne,

VA law is clear that delinquent accounts are considered a private issue. Therefore, you can not make it known to the general membership who is or who is not delinquent, VA § 55-510.

A membership list at the annual meeting, checking off who attends and passing out a ballot for those eligible to vote is all that is needed. When the delinquent member shows up they should be taken aside and quietly spoken to about the delinquent account and not given a ballot. Of course, if they wish to bring their account current by giving a check right there, they can then be given a ballot.

Notices of the meeting must be sent to all members not just those in good standing, VA § 55-510. As you already indicated, the member is allowed to attend and express opinions, they just can not vote.

I would suggest that delinquent members be informed of their status prior to the meeting and the fact that they will not be entitled to vote at the general meeting unless they bring their accounts current. This might help bring the accounts current or have the member reconsider attending the meeting if they know they can't vote.

As for your concerns on the meeting being extended, limit the discussion time on each topic and minimize the amount of time each person has to respond (say 3-5 min.).

Hope this helps,

Tim.

Here is the web address for that section of the VPOAA:

http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+55-510

Steve,

You are correct, the term is may vs. shall. I stand corrected.

This is why I try to always give links or specify which section of the law I am getting this from, so the person can verify it for themselves.

I should have said that good business practice about privacy concerns should be considered before making this information general knowledge. After all, if you were behind in paying your bills, for whatever reason, would you want that knowledge to be publicized to all your neighbors?

Tim

Tim, we wouldn't know if they were behind in their bills.

We would only know that they have or have not paid their annual assessment.

But that information is not generally broadcast at the annual meeting anyway.

We send out a status report in January that shows all the lots that have paid and those that haven't are marked "unpaid."

They are all members AND stakeholders of the association. All members are entitled to the status list of paid/unpaid, per our documents.

Those who are still unpaid by the time the date of the notice for the annual meeting and the ballots are sent out do not receive either of those mailings. Kentucky law does not mandate we send them notice anyway, and our documents specify they are not to receive notices if they are still unpaid at the time of required notice.

But then our annual meeting is the same day every year, again per the governing documents, so if the member is aware or read his/her documents, he/she would know and attend anyway.

We don't bar the door and refuse to let them in. They can speak if recognized from the chair. The chair (and the other board members) would definitely know who has and has not paid at that point, whether the rest of those in attendance do or not doesn't really matter. We would no doubt hear their comments, but give those comments the appropriate "weight."

On the other hand, they don't get to vote.

We considered this same issue. We don't really have any "amenities" per se to take away from owners in our community, so the only other option to take away was delinquent owners voting rights. After discussing this with an attorney, I'll pass along what we were told...tread carefully and consider all the consequences.

If you are an Association of 9 units and later needed a 67% vote (super-majority) to approve something (say a change to the CC&Rs), that means you would need to have 6 votes "for." If you take away the voting rights of these 3 delinquent owners, that means you would need to get all the remaining 6 owners to vote "for" something. Depending on your homeowners, that could be a difficult task. Not saying it can't be done, but it could make it substantially more difficult.

If you take away someone's voting rights, it's my understanding that it doesn't change the total votes that may be required to effect some action in the Association.

Tim is absolutely correct.

Our documents stress that any membership vote is calculated by eligibility to vote -- members in good standing.

Our documents even state that any meeting notice is only sent to those members "in good standing" as of the date the notice is required to be given.

Then, for quorum and amendments, we must have a majority of those eligible to vote (as of the date of the notice of the meeting), and, if a quorum is not present for the meeting, then the meeting may be adjourned, a new date set within XXX days and at that second meeting a quorum is not required and the vote passes this time with only a majority of those present who are eligible to vote (members in good standing).

Well, that's the way ours is. And personally, I'm very comfortable with it.

Those who don't pay or are not in good standing for other reasons, remind me again why they should even get notice or attend meetings?

"Participation" in the organization is more than simply voting.

It also eliminates a lot of people who simply try to play the system.

Hold onto their money until the last possible minute. . .

Then pay and expect to be a full participant?

Sorry, not kosher in my book.

Though I don't really know why or how the not receiving notice came about, we also require all votes to be by mail.

So if the person pays prior to the required date for the mailing then they can receive a ballot.

If they don't then no ballot is sent to them.

The ballots and the notices for meetings go out at the same time in the same mailing.

No ballots are accepted in person (if someone brings theirs to the meeting instead of mailing it in by the ballot due date), and no nominations are allowed from the floor (for obvious reasons).

But regarding our regular meetings, all residents know what the dates and times of those are (they are spelled out in the CC&Rs), so even if they didn't get a notice of the meeting, they would still be able to show up and listen.

The only meetings they would "miss out" on would be any special meetings that were called outside of the regular mandated ones.

Robert,

I agree. The wording of the CCRs clearly gives the board the discretion to determine whether or not the members' voting rights should be suspended. Of course they should be consistent in their determination, but we all know that doesn't always occur! BTW, if ". . .have the right to. . ." were eliminated from the article, then the board would be obligated to suspend those members' right to vote.

BTW, what procedures are set forth in the bylaws pertaining to suspension of members' right to vote?

Robert,

Very interesting! I asked the question because of the following statement from your CCRs: ". . .the Board, in accordance with the procedures set forth in the Bylaws, shall have the right to suspend such Owner's right to vote until such time as all payments,. . .".