We're Having What Kind of Meeting?

We're having what kind of meeting?

If you live in an HOA or Condominium, or are on the board in one, you are probably getting notices left and right about meetings.

What's the difference between a board meeting and a town meeting, or an annual meeting and a special meeting? Confused? Here's some clarification.

ANNUAL MEETINGS

Annual meetings—or annual membership meetings—are usually required by your governing documents, which specify when they’re to be conducted and how and when members are to be notified about the meeting. This is the main meeting of the year when members receive the new budget, elect a board, hear committee reports and discuss items of common interest. Click here for our HOA/Condo annual review meeting checklist or view below.

SPECIAL MEETINGS

Special meetings are limited to a particular topic. When the Board calls a special meeting (which they can do at any time), they must notify all members in advance. The notice will specify the topic so interested members can attend. Special meetings give the board an opportunity to explore sensitive or controversial matters—perhaps an assessment increase. Members do not participate in the meeting, unless asked directly by a board member, but they have a right to listen to the board discussion.

TOWN MEETINGS

Town meetings are informal gatherings intended to promote two-way communication; full member participation is essential to success. The board may want to present a controversial issue or explore an important question like amending the bylaws. The board may want to get a sense of members’ priorities, garner support for a large project or clarify a misunderstood decision.

BOARD MEETINGS

Most of the business of the association is conducted at regular board meetings. Board members set policy, oversee the manager’s work, review operations, resolve disputes, talk to residents and plan for the future. Often the health and harmony of an entire community is directly linked to how constructive these meetings are.

EXECUTIVE SESSION

The governing documents require the association to notify you in advance of all meetings, and you’re welcome—in fact, encouraged—to attend and listen. The only time you can’t listen is when the board goes into executive session. Topics that the board can discuss in executive session are limited by law to a narrow range of sensitive topics. Executive sessions keep only the discussion private; no votes can be taken. The board must adjourn the executive session and resume the open session before voting on the issue. In this way, members may hear the outcome, but not the private details.

PARTIES

Occasionally the association notifies all residents of a meeting at which absolutely no business is to be conducted. Generally these meetings include food and music, and they tend to be the best attended meetings the association has. Oh, wait! That’s a party, not a meeting. Well, it depends on your definition of meeting.

Take a look at our annual meeting checklist below.

The Meaning of Quorum

Most community association bylaws state a specific quorum requirement for owner or membership meetings.  The purpose of a quorum is to avoid binding owners to decisions made by an unrepresentatively small number of individuals.  Simply put, quorum is the minimum number of members or owners required to conduct business at a meeting. That minimum number may be a percentage of owners or a specific, fixed number of owners. If at the start of an owner meeting it appears the quorum requirement has not been met, the meeting cannot continue.  The only action that may be taken is to set the time and place for another meeting.  Any substantive action taken in the absence of a quorum is deemed invalid.

Some governing documents may not provide for a quorum requirement.  In that case, there are statutory defaults.  In Oregon, if the governing documents are silent then the quorum requirement is 20% of the owners (ORS 94.655).  Washington has a slightly larger default quorum requirement:

Unless the governing documents specify a different percentage, a quorum is present throughout any meeting of the association if the owners to which thirty-four percent of the votes of the association are allocated are present in person or by proxy at the beginning of the meeting.(RCW 64.38.040)

Keep in mind that quorum can be achieved by owners attending a meeting in person or by proxy.  It’s conceivable that quorum could be achieved by only a few owners attending a meeting in person, but each of those owners having multiple proxies from other owners.

If your homeowner or condominium association has difficulty meeting its quorum requirement, here are a few ideas to consider to increase membership attendance:

- Consider changing the location to a more convenient or comfortable place;

- Plan ahead and choose a meeting date that doesn’t conflict with vacation periods or holidays;

- Send notice of the meeting via mail, email, and any other means which owners are likely to receive;

- Consider serving food or refreshments;

- Give away door prizes.

Robert's Rules for Condominiums and HOAs

Most community associations use parliamentary procedure to govern board and owner meetings. In the United States, the most popular form of parliamentary procedure is Robert’s Rules of Order. Complicated? Surely. But if you understand a few basics, you can learn how to run a civil and efficient meeting. Here’s the key to Robert’s Rules: 1) Motion 2) Second 3) Debate 4) Vote. The entire meeting should follow those steps.

First, a member of the assembly makes a motion. This is how business is brought before the group. Standing up and complaining, or voicing a concern, is not a motion and is “out of order.” Instead of standing up to complain about the state of disrepair of the clubhouse, I can make a motion. For example: “I move that we spend $2000 to repair the clubhouse.”

Next, another member of the assembly must second the motion. This simply ensures that at least one other member wishes to debate the motion. If a second is not received, the motion dies and a new motion may be entertained.

Now is the time to debate the motion. Members of the assembly take turns explaining why the assembly should vote for or against the motion.

Once the debate is closed, the assembly votes on the motion. Then the chair announces the outcome of the vote and a new motion may come before the assembly. The process repeats itself until a motion to adjourn the meeting is made.

To be sure, there are dozens of nuances and technical details. For example, during debate of a motion the maker of the motion speaks first, you alternate between those for the motion and those against the motion, those who haven’t spoken get precedence over those that have, etc., etc. Don’t get hung up on the technical aspects—-just remember: Motion, Second, Debate, Vote. That’s 99% of knowing Robert’s Rules.

Click here for a simple chart of parliamentarian motions: Motions Chart

Understanding Executive Session

Most condominium and homeowner associations in Washington and Oregon are subject to open board meeting requirements.  The requirements are similar to the laws governing city councils and other governmental agencies. Conceptually, the policy behind open meeting requirements is that members of the community association are entitled to listen and witness the deliberation, discussion, and decision making of the board of directors.

Prior to any board of director meeting, notice must be given to all owners within the community. The notice must state the time and place of the meeting, and ideally, the meeting agenda. Owners are allowed to attend the board meeting, but because non-board members are not part of the “assembly”, owners do not have a right to vote or participate while the board is conducting its business.

There is an exception to the open meeting requirement: executive session. Executive sessions may be used so that the board can discuss private or sensitive topics behind closed doors. Keep in mind, no decisions are made in executive session—it’s only for discussion.

Here’s how the board should use executive session:

1. During a regularly noticed and scheduled board meeting, any member of the board may make a motion to adjourn to executive session.

2. The motion should indicate the general topic of discussion.

3. Once the motion passes, the board asks the audience to exit the meeting or the board moves to a different location.

4. The board then discussed the topic at issue.

5. Once the executive session is completed, the board moves back into the open meeting.

6. If there is an action item as a result of the executive session, a motion is made and a vote taken once back in the open meeting.

Remember, there are only certain topics which are appropriate for executive session. For Washington homeowner associations, those topics are:

1. Considering personnel matters;

2. Consulting with legal counsel or considering communications with legal counsel; and

3. Discussion of likely or pending litigation, matters involving possible violations of the governing documents of the association, and matters involving the possible liability of an owner to the association. (RCW 64.38.035)

For Oregon planned communities and condominium associations, the executive session topics are:

1. Consultation with legal counsel;

2. Personnel matters;

3. Negotiation of third party contracts; and

4. Discussion of delinquent assessments. (ORS 94.640, ORS 100.420)

Fractions and Votes Under Robert's Rules

Condominium and homeowner association documents contain many different voting requirements.  For example, the required number of votes to elect a director is usually different than the number of votes required to adopt an annual budget.

The math involved in determining voting requirements doesn’t usually have whole round numbers. Suppose a planned community has 173 lots.  The Bylaws require a quorum of 20% of the owners at the annual meeting.  The quorum requirement, then, is 34.6. But does 34.6 mean that 34 or 35 owners must be present in person or proxy?

The use of the term “majority” is often misunderstood.  Under Robert’s Rules, a majority means “more than half.”  (Occasionally, I hear people say that a majority is 50% plus 1.  This is an incorrect interpretation and results in a wrong voting threshold.) Let’s assume quorum is achieved and an issue arises requiring a majority vote. Blank ballots or abstentions aren’t counted. With that in mind:

If 19 votes are cast, a majority (more than 9.5) is 10

If 20 votes are cast, a majority (more than 10) is 11

If 21 votes are cast, a majority (more than 10.5) is 11

The term “majority” must be read in context. And with slightly different verbiage, “majority” may mean very different things.  Let’s assume there are 150 lot owners.  The Bylaws contain a 10% quorum requirement.  Out of the 150 lot owners, only 30 show up and only 25 of the 30 actually vote on the issue.  If the Bylaws simply require “a majority vote”, then only 13 votes are required.  But what if the Bylaws require “a majority of the members present”? In that case, 16 votes are required.  Here are some other examples commonly found in community association Bylaws:

“a majority of the entire membership” (76 votes required)

“2/3 of the members present” (20 votes required)

“2/3 of the entire membership” (100 votes required)

Many actions at owner meetings require a 2/3 vote.  Suppose the governing documents require the approval of a motion by a 2/3 vote of the members present in person or by proxy.  Under Robert’s Rules, you don’t round down:

If 30 votes are cast, a 2/3 vote is 20

If 31 votes are cast, a 2/3 vote is 21

If 32 votes are cast, a 2/3 vote is 22

If 33 votes are cast, a 2/3 vote is 22

In community associations where voting rights are tied to the square footage of a dwelling, matters are even more complicated. In short, read your documents carefully and do the math before the meeting!

Directors vs. Officers

There is often confusion about the difference between directors and officers in condominium and homeowner associations.  Much of the confusion stems from the corporate world. In large corporations, the board members of a corporation are often different individuals than the officers.  For example, IBM has 13 individuals on its board of directors and nearly 20 different individual officers. In other words, there is no overlap between the directors and the officers.

In community associations, however, the individual board members are usually the same individuals who serve as officers.  Members of the association vote for and elect individuals to the board of directors. This is done at the annual meeting of the membership.  Once the board members are elected, the board members (without a vote of the owners) appoint individuals to fill officer positions.  The officer positions consist of a president (or chairperson), secretary, and treasurer. Some association bylaws authorize the appointment of additional officers.

There are differences between the roles and obligations of directors vs. officers.  First, under Oregon law, directors must be owners or co-owners of a condominium unit or planned community lot. (ORS 100.416 & ORS 639). If the unit or lot is owned by a corporation, limited liability company, or similar form of ownership, then an employee, member, or manager of the entity may serve on the board.  There is no similar statutory requirement, however, that officers must be owners or co-owners.

Second, board members are almost always elected by a vote of the association's owners and (usually) may only be removed or recalled by a vote of the owners.  Officers, on the other hand, are commonly elected or appointed by the board members, without a vote and without the input of the ownership.  Most governing documents provide that officers may be removed by a majority vote of the board members-without a vote of the ownership.

Third, you may have heard that the president or chairperson of the association only votes in the event of a tie. This is true-especially in the corporate world.  However, at an association board meeting, the board members are voting in their capacity as board members, not in their capacity as officers.  Board members have a fiduciary duty to vote on association matters.  The owners elect directors because they trust and value the director's judgment. Assuming the president or chairperson of the association is also a board member, the chair has a duty to vote!

Lastly, many governing documents outline specific duties of board members and officers. In most cases, there are significant differences between the authority of directors and the authority of the officers. Review those provisions carefully and look for differences between the roles.

"Electing" Board Members

Each year community associations in Oregon and Washington hold annual meetings of the membership.  The primary purpose of the annual meeting is to elect individuals to the board of directors. Let's suppose that an association has a board of directors comprised of 7 individual members. At the annual meeting, 3 of the director positions will be open (the term of office for the remaining 4 directors is the following year). Now, let's suppose that only 3 individuals have been nominated prior to the annual meeting. In other words, there are 3 spots open and only 3 people have agreed to run for the positions. Is it necessary to go through the steps of "electing" these individuals? The short answer is, yes.  Here's why.

Most bylaws state that board members must be "elected."  Robert's Rules states:

If the bylaws require the election of officers to be by ballot and there is only one nominee for an office, the ballot must nevertheless be taken for that office[.] (RRO, 11th ed., Section 46)

But there's another reason.  Under Robert's Rules of Order members are entitled to nominate candidates from the floor.  Although only 3 individuals were nominated prior to the annual meeting, other owners may desire to nominate additional members at the actual annual meeting.  Once again, Robert's Rules states:

[M]embers still have the right, on the ballot, to cast "write-in votes" for other eligible persons.

In summary, going through the formal steps of balloting and electing when the outcome is obvious may seem tedious.  However, following the formalities lessens the likelihood of legal challenges down the road.

Methods of Voting

There are numerous methods of taking a vote in community associations.  For issues which may be challenged, it’s wise to use a written paper ballot.  For other non-controversial matters, associations may choose from a variety of voting methods.

Robert’s Rules of Order describes several ways to take a vote. Here’s an overview:

1. Voice

Often referred to as “viva voce”, this is a common method of voting. The chair would say, “The question is on the adoption of the motion to approve the special assessment.  Those in favor say ‘aye’, those opposed say ‘no’.  In larger assemblies where the vote is close, this may not be the most effective voting method.

2. Rising

This method is used to verify a voice vote which is inconclusive. The chair asks those in favor to stand up and a count is taken of the standing members.

3. Show of Hands

Typically used in smaller associations, this method may be used in place of a rising vote or a voice vote.

4. Ballot

For any issue which may be contested, a written ballot should be used. Written ballots allow for easy recounting and verification after the meeting. Ballots should be considered association records, i.e. owners may review and inspect the ballots.

5. Voting Cards

Some organizations, if authorized by the governing documents, use voting cards.  Voting cards are distributed to members at the start of the meeting. This method is typically used in lieu of rising or show of hands voting.

6. Electronic Voting

Technology has changed the way many associations operate. Some large associations have adopted electronic voting at annual meetings. Several services allow owners at a physical meeting to use their cell phones, tablets, or computers to cast votes.  The results are instantly counted and displayed.  One such service is: https://www.polleverywhere.com/

7. Roll Call Vote

This is an alternative method of voting which also creates a written record of the vote. The secretary or other individual appointed by the chair reads the names of each member of the association, asking if they vote yes or no on the issue.  The vote is then recorded next to the member’s name.

8. Absentee Voting

Robert’s Rules of Order discourages absentee voting: “It is a fundamental principle of parliamentary law that the right to vote is limited to the members of an organization who are actually present at the time the vote is taken at a regular or property called meeting[.]”  The point of debating a motion is that members may change their mind on an issue. If the vote is cast prior to the meeting via an absentee ballot, the debate/discussion portion of a motion is circumvented.

Special Owner Meetings

Community associations typically have three types of meetings: board meetings, annual owner meetings, and special owner meetings. The notice requirements, quorum provisions, and subject matter are very different for each type of meeting. The most common reason for a special owner meeting is for the removal of directors. Other reasons include approval of special assessments and amending the governing documents. Because the meetings are "owner" meetings, all owners have the right to participate, make motions, and vote.

The notice requirements for special owner meetings are typically found in the association's bylaws. Notice is commonly required no less than 10 days and no more than 50 days prior to the meeting. The notice of a special owner meeting must contain a description of the business to be conducted. For example, if the meeting is to remove a director, the notice must specifically state: "The purpose of this meeting is to consider and vote upon the removal of director John Doe."  The special meeting is strictly limited to the business contained in the notice.

Owners may call a special meeting by submitting a petition signed by enough owners required to call the meeting. Once the petition is submitted, the board should verify the names and ownership of each person who signed the petition. Assuming the petition contains the required number of signatures, the board has a duty to call and hold the special meeting.

Here is a chart showing who may call special owner meetings:

Oregon Condo & HOAs	Washington HOAS	Washington Condos
1. President of the association; 2. Majority of the board of directors; or 3. 30% of the owners (unless different req. is in documents)	1. President of the association; 2. A majority of the board of directors; or 3. 10% of the owners	1. President of the Association; 2. A majority of the board of directors; or 3. 20% of the owners (or lesser percentage if specified in the governing documents)
ORS 94.650	RCW 64.38.035	RCW 64.34.332

Components of an Effective Board Meeting

Board meetings can easily turn into chaos. State law (in Oregon and Washington) and governing documents often provide guidance on running board meetings.  Parliamentary procedure, most importantly, should be used to keep order and allow the meeting to proceed efficiently. The following is a brief overview of the components which are necessary for an effective board meeting. 1. Starting the Meeting

Once quorum is present, the Chair should state “The meeting will come to order.”

2.  Parliamentary Procedures

The Board of Directors should use Robert’s Rules of Order to conduct its meetings.

3.  Order of Business

Sometimes called the "agenda", Robert's Rules uses the term "Order of Business."  Some association bylaws may dictate the agenda for board meetings.  Otherwise, use the following order of business:

A. Reading and Approval of Minutes (Following any corrections, the minutes should be approved, typically by unanimous consent)

B.  Reports of Officers, Boards and Standing Committees

C.  Unfinished Business

Sometimes incorrectly referred to as “Old Business”, this refers to questions that have been carried over from the previous meeting as a result of that meeting having been adjourned without completing its order of business.

D.  New Business

Following any unfinished business, the chair will ask “Is there any new business?”  Board members may introduce new items of business at this time.

4.  Quorum

Quorum is the number of individuals who must be present in order to conduct business.  Most bylaws require a majority of directors to be present in order to achieve quorum.  In the event there is not a quorum, the meeting cannot continue.

5.  Open Meetings Requirement

Washington and Oregon require homeowner association board meetings to be open to the membership. (ORS 94.640 / RCW 64.38.035)  All meetings of the board must be open to owners and properly noticed, except for emergency meetings.

6.  Motions

In formal settings, there should be no discussion without a motion. A motion is a formal proposal for the board to discuss and vote on a particular issue. Meetings should follow the same structure each time: motion, second, debate, vote. Here’s how it works:

A. Member makes the motion

B. Another member seconds the motion

C.  The presiding officer repeats the motion to ensure that everyone is discussing and voting on the same issue

D.  Member then debate or discuss the motion

E. The presiding officer “puts” the motion to a vote

F. The outcome of the vote is announced.

7. Executive Session

Executive session may be used to discuss sensitive or confidential topics.  During a normal, open board meeting, any board member may make a motion to convene in executive session. The minutes of the meeting should reflect the motion to convene in executive session. The board members then discuss the relevant issues in executive session.  Once the discussion is complete, the board reconvenes to the open meeting. If any motions or decisions need to be made, they are done so once the board has returned to the open meeting. There are no motions, and no voting, during the executive session.

A. Topics Allowed - Washington

1. Consideration of personnel matters;

2. Consultation with legal counsel or to consider communications with legal counsel, and discuss likely or pending litigation;

3. Matters involving possible violations of the governing documents of the association; and

4. Matters involving the possible liability of an owner to the association.

B. Topics Allowed - Oregon

1. Consultation with legal counsel;

2. Personnel matters, including salary negotiations and employee discipline;

3. Negotiation of contracts with third parties; and

4. Collection of unpaid assessments.

8. Meeting Minutes

The meeting minutes should include the following:

1. Type of Meeting (Special, Regular, Adjourned)
2. Name of the Association
3. Date and Time of the Meeting
4. Place of Meeting
5. Whether previous meeting minutes were approved
6. Separate paragraphs with name of person who makes motions and:
   1. All main motions and any amendments
   2. Whether the motion passed
   3. Names of those who voted in favor of the motion and the names of those who voted against the motion
7. Do NOT include:
   1. Name of person who seconded motion
   2. Remarks of guest speakers
   3. Motions which are withdrawn
   4. Personal opinions
8. Hour of adjournment

As always, talk to a qualified HOA or condominium lawyer for legal advice.

Robert's Rules & Small Boards

Robert’s Rules of Order is designed to keep control of large groups or assemblies.  Members must stand and be recognized by the chair, motions must be seconded,  and members may not speak out of turn.  However, sometimes that level of formality isn’t needed, especially when the assembly is a small number of board members. RRO contains special procedures that small boards may utilize. (Robert’s Rules of Order, Newly Revised, 11th Edition, Section 49)  A “small” board is 12 or fewer members.  Here are some of the informal procedures for small boards:

- Board members do not have to stand or be recognized by the chair in order to speak or make motions;

-Motions need not be seconded;

-A board member may speak any number of times on a question (not just two) and motions to close or limit debate are generally not permitted;

-A motion does not have to be pending in order to discuss a subject informally;

-Votes can be taken by a show of hands;

-If a proposal is perfectly clear to everyone it may be voted on even though no formal motion has been made;

-In putting a question to a vote, the chairman need not stand.

An additional exception to the formal rules is that “the chairman can participate and vote.”  However, in most community associations, the chairperson (an officer position) is also a member of the board of directors.  When a vote is taken all board members in a community association should vote—in fact, there is a fiduciary obligation to vote.  Thus, when the chairperson votes on an issue, he or she is voting in their capacity as a board member, not as an officer.

If your board desires to use the procedures for small boards, adopt a policy stating that board meetings will be conducted in accordance with Robert's Rules for small boards.

Board Member Conflicts of Interest

Suppose the board of directors is considering hiring a new landscape company.  The owner of the landscape company happens to be the cousin of one of the board members. May the board consider hiring the landscape company? And does the board member who is related have to abstain from voting on the matter? Conflicts of interest often arise in community associations.  In general, a conflict of interest arises when a board member has a self-interest (or will receive a financial benefit) from the outcome of the decision.  Another way to describe a conflict of interest is: putting your own interests ahead of the best interests of the association and members.

There are two types of conflicts of interest—actual and potential.  A potential conflict is one in which a board member has duties or interests that conceivably could be at odds at some point in the future. For example, a potential conflict exists every time the board establishes the association's budget. Board members generally have an obligation to propose and establish budgets that meet the financial needs for operating the community. However, the personal interest of most homeowners--including board members--is to pay less, rather than more. While this potential conflict exists, it rises to the level of an actual conflict of interest only when board members choose to disregard the actual needs of their community to minimize their personal expenses.

In contrast, an actual conflict of interest would occur if the board votes to hire a maintenance company which is owned by a member of the board.  By hiring the maintenance company, the board member/owner is receiving a direct financial benefit from the hiring of the maintenance company.

In most cases a board may approve decisions, even if there is a conflict of interest with a board member, if:

 - the board member discloses their interest or the benefit which will be received; and

 - the board member with the conflict of interest abstains from the vote.

In some cases, the best company or vendor in town may have a relationship with a board member.  That doesn’t mean the board must dismiss consideration of hiring the company or vendor.  Here are some steps to follow when conflicts of interest may be present:

1) Disclose - Always disclose to the other board members and the owners any conflicts of interest.  Explain exactly what the relationships are and whether a direct or indirect benefit will be received by a board member.

2) Document - Hiring any contractor or vendor should be documented in the board meeting minutes.  Include the factors which the board relied upon in making its decision.

3) Bid - It’s always the best practice to solicit bids anytime a board begins the process of hiring or engaging professional services.  The bids should be in response to a well-drafted request for bids so that the board may compare costs, services, and terms.

4) Vote - Once all the information has been considered, each board member should exercise their business judgment and vote in a manner which is in the best interests of the association.  A board member with a direct or indirect interest in the outcome should abstain. The vote and abstention should be noted in the meeting minutes.

The board of directors should be sensitive to the potential for conflicts of interest to develop, the duty owed to the membership, and the steps required when a conflict arises. Liability is created not by facing a conflict of interest, but by failing to handle one properly.

Telephones and Board Meetings

[Oregon] There is often confusion about the use of telephones in board meetings.  Let’s start with some preliminary issues.  First, board meetings must be open to the owners for observation.  While there is no right for owners to participate or vote in a board meeting, many boards have an open forum or Q&A session for owners at the end of each board meeting.

The only exception to the open meeting requirement is executive session.  The board may convene in executive session (and exclude owners) to: 1) consult with legal counsel; 2) discuss personnel matters; 3) discuss unpaid assessments; and 4) negotiate 3rd party contracts.

Second, notice of board meetings must be provided to the owners at least 3 days in advance.  Notice must be through a means “reasonably calculated” to inform the owners of board meetings.

Now let’s look at the use of telephones in board meetings.  Oregon law addresses the use of telephones in two different scenarios:

Scenario 1:  There is no physical meeting and all of the directors are using a telephone to communicate and hold a board meeting; and

Scenario 2:  There is a physical board meeting which owners have notice of and may observe, and a single board member calls in to the meeting to participate by phone.

Under Scenario 1, this type of meeting may only occur in cases of emergency.  For example, a pipe bursts on common property and it’s impossible to provide advance notice of the meeting or to convene in person. In such an emergency, the entire board may hold a conference call to make decisions regarding the emergency.

The statute addressing Scenario 1 states:

Only emergency meetings of the board of directors may be conducted by telephonic communication or by the use of a means of communication that allows all members of the board of directors participating to hear each other simultaneously or otherwise to be able to communicate during the meeting. A member of the board of directors participating in a meeting by this means is deemed to be present in person at the meeting. (ORS 94.640(10)(c))

The statute above does not address or prohibit a single board member from participating by phone at a normal board meeting, as described in Scenario 2. In fact, the Oregon Nonprofit Corporation Act provides:

Unless the articles or bylaws provide otherwise, the board of directors may permit any or all directors to participate in a regular or special meeting by, or conduct the meeting through, use of any means of communication[.] (ORS 65.337(3))

It is possible (but not likely) that an association’s governing documents prohibit board member participation via telephone. If that’s the case, follow the provisions of your governing documents.  If there is no such prohibition, there is nothing improper with a board member phoning in to a regularly noticed and open board meeting.  The board member may participate and vote as if they were present in person.

[Washington]

Washington associations, unless prohibited by the governing documents, may also allow board member participation in board meetings by telephone.  The Washington Nonprofit Corporation Act states:

Except as may be otherwise restricted by the articles of incorporation or bylaws, members of the board of directors or any committee designated by the board of directors may participate in a meeting of such board or committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time and participation by such means shall constitute presence in person at a meeting. (RCW 24.03.120)

Understanding Proxies

Oregon and Washington law authorize the use of proxies unless prohibited by the governing documents. (RCW 24.03.085, ORS 65.231) Many condominium and homeowner associations find it impossible to achieve quorum at annual meetings without the use of proxies.

A proxy is a power of attorney between the “proxy giver” and the “proxy holder”. The proxy holder attends the ownership meeting and can act on behalf of the proxy giver, including making motions, voting, and engaging in debate.

When to Use Proxies

Proxies are typically exclusive to membership meetings, and in most cases should not be used for board meetings. Board members are elected specifically because owners trust the board member’s judgment, expertise, or knowledge.  If a board member cedes their responsibilities to another individual, then they are not fulfilling their fiduciary duties. Oregon explicitly prohibits the use of proxies in board meetings. (ORS 100.419 & 94.641)

Types of Proxies

There are many types of proxies:

1. General proxies;

2. Directed proxies;

3. Proxies for the purpose of establishing quorum; and

4. Combinations of general and directed proxies.

General proxies are ideal unless circumstances require otherwise.

The Proxy Holder

Unless prohibited by the governing documents, the proxy holder may be any individual, including individuals who may not even live in the same community. For example, I could give my proxy to my grandmother who lives in another town. What’s important is that I give my proxy to someone I trust, and who will exercise good judgment.

Proxies and Voting

Keep in mind that giving a proxy to the proxy holder does not cast a vote. It merely authorizes the proxy holder to attend the meeting and then cast votes on behalf of the proxy giver. Proxies are not absentee ballots, and there is no such thing as a “proxy ballot”.

If the proxy giver wants the proxy holder to vote a certain way, then a “directed” proxy may be used. But there are downsides to directed proxies. Suppose I give my neighbor a directed proxy which instructs my neighbor to vote for Jill for the board. However, as the meeting begins Jill decides not to run for the board, and Jane steps into Jill’s place. Now, my directed proxy is useless (not quite useless, it still counts toward the quorum requirement).

Proxy Requirements

A proxy should contain the following information:

1. Name of association

2. Name of proxy giver

3. Proxy giver’s unit, lot or address

4. Name of proxy holder

5. Date when proxy giver signs

6. Expiration date

7. Signature

Click here for a sample proxy: Sample Proxy

10 Tips for Using Committees

Effective boards utilize committees to help shoulder the burden of association operations.  Oregon law allows the board of directors to create committees for any proper purpose:

(1) Unless the articles or bylaws provide otherwise, a board of directors may create one or more committees of the board of directors which exercise the authority of the board of directors and appoint members of the board to serve on them or designate the method of selecting committee members. (ORS 65.354)

Washington law contains a similar statute authorizing the use of committees. (RCW 24.03.115)

Here are 10 tips for putting committees to use:

1. Write and adopt a policy or resolution describing the purpose and duties of the committee.

2. State the committee’s objectives in clear, measurable terms.

3. Remember that committees make recommendations.  The board of directors makes decisions based on the recommendations.

4. Communicate!  Typically, the head of the committee offers a report at regularly scheduled board meetings.  Between meetings, check in on progress.

5. If board members serve on the same committee, makes sure it’s not a majority of the board.  Otherwise, you may violate open meeting requirements.

6. If there are no board members on the committee, consider appointing a board liaison.

7. If members of the association have particular skills, seek them out.  If a member has expertise in newsletters or marketing, appoint that member to a communications committee.  If a member has experience with landscaping, put the member on the landscape committee.

8. Always be grateful toward committee members and make sure they feel appreciated.

9. Be certain committee members are aware of governing document provisions or other association policies which may impact the committee’s work and objectives.

10. Provide resources to committees when needed.  This includes records, previous committee reports, space to hold meetings, and access to 3rd party professionals.

Recording Board Meetings

Audio or video recording of board meetings typically happens under two circumstances: 1) the secretary of the association records the meeting to assist with creating meeting minutes; and 2) an owner in the audience (without permission) records the meeting. Carefully consider any policy which allows the recording of board meetings. Directors are often less inclined to speak freely if the meeting is recorded. Recording for Meeting Minute Preparation

If the board records meetings for the purpose of creating meeting minutes, adopt a policy stating how long the recordings will be kept. At the expiration of that time period, destroy the recordings.

In most cases, however, there is no need to record board meetings for the purpose of creating minutes. Meeting minutes should contain the motions made, who seconded the motion, and whether the motion passed. Oregon law also requires to list which board members voted yes and which members voted no. Attempting to summarize the discussion or debate of the motion is not required, and generally not advised.

Owner Recording of Board Meetings

Oregon condominium and homeowner associations (and Washington homeowner associations) are required to allow owners to attend board meetings. Although many boards have an open forum for owners at the start or end of the board meeting, owners are not allowed to otherwise participate or vote at board meetings.

Under Robert’s Rules of Order, the board of directors is entitled to adopt rules of order or standing rules governing its meetings. If the board’s decision is to prohibit the recording of board meetings, simply adopt a policy stating that no audio or video recording is allowed.

In addition, ORS 165.540 prohibits the recording of any conversation unless all parties to the conversation are specifically informed. This statute can be used to prevent the secret or unauthorized recording of board meetings. If an owner continues to record a board meeting, the owner can be asked to leave the meeting once the board has adopted a policy.

Preparing For Annual Meetings

Every homeowner and condominium association is required to have an annual meeting of the members. The primary purposes of the annual meeting are:

-Present annual budget to members -Elect Directors -Deliver Committee Reports -Strengthen the Community

1. Determine Notice Requirements

There are three types of meetings in community associations: annual, special, and board. Each type of meeting will have different notice requirements. Make sure you comply with the annual meeting notice requirements contained in your Bylaws.

For Oregon associations, notice of the annual meeting must be sent no less than 10 days and no more than 50 days prior to the meeting date. (ORS 100.407 / 94.650) Washington homeowners associations must send notice not less than 14 days and not more than 60 days. (RCW 64.38.035)  Annual meeting notices must be sent to all members at the last address provided to the association.

2. (Oregon) Include Reduced Quorum Language

Oregon has a unique statute which allows for a reduced quorum for ownership meetings. For condominiums, the statute is ORS 100.408, for planned communities, the statue is ORS 94.655.

If the membership meeting cannot proceed because of a lack of quorum, you may adjourn the meeting. The meeting may then immediately re-start with a reduced quorum. The reduced quorum is 1/2 of the quorum requirement or 20%, whichever is greater.

So, if your quorum requirement is 50%, the reduced quorum would be 25%. If your quorum requirement is 30%, the reduced quorum is 20% (remember, 1/2 or 20%, whichever is greater). If your quorum requirement is 20%, it stays at 20%. Keep in mind that the notice of the meeting must contain a statement that the quorum will be reduced and what the percentage will be if reduced. The language should also state that the meeting will be immediately recalled with the reduced quorum percentage (otherwise, you must wait 48 hours).

To take advantage of this statute, place a statement in the notice indicating that if quorum is not met, the meeting will be adjourned and immediately restarted with the reduced quorum. Indicate the percentage of the reduced quorum.

3. Prepare Proxies

A proxy should contain the following information:

1. Name of association 2. Name of proxy giver 3. Proxy giver’s unit, lot or address 4. Name of proxy holder 5. Date when proxy giver signs 6. Expiration date 7. Signature

Click here for a sample proxy: https://calaw.attorney/wp-content/uploads/2015/01/Sample-Proxy.doc

4. Use A Nominating Committee

Some association documents require the use of nominating committees prior to the annual meeting. In most cases, nominating committees make nominations and the election a much more efficient process. A good nominating committee will solicit names, determine if those individuals are willing to serve, gather biographies of the candidates, and present the information to the board and owners prior to the meeting. Keep in mind, unless prohibited by your governing documents, members can always nominate individuals from the floor at the actual meeting.

5. Prepare Agenda

Oregon and Washington law require annual meeting notices to state the time and place of the meetings, items on the agenda, including the general nature of any proposed amendment to the governing documents, any budget changes, or any proposals to remove directors.

Based on the recommendations in Robert’s Rules of Order, community association annual meeting agendas should include the following:

Announcement of Quorum Reading and Approval of Minutes Reports of Officers, Boards and Committees Election of Directors Unfinished Business and General Orders Announcement of Election Results New Business Adjournment

6. Know Voting Requirements

If certain items on the agenda require a vote of the owners, make sure you know beforehand the required voting threshold. For example, if the agenda includes a vote on levying a special assessment, look at your governing documents to see how many owners must vote in the affirmative. Some votes require a majority, some require a “super-majority”, and others may only require a plurality.

If your governing documents allocate votes by square footage or allow for cumulative voting, have an electronic spreadsheet ready with pre-set formulas to quickly tally votes. Also, if your Declaration or Bylaws prohibit delinquent owners from voting, make sure the names or units of those owners are excluded from voting.

6 Ways to Take a Vote

Nearly all condominium and homeowners associations use Robert's Rules of Order ("RRO").  RRO describes multiple methods of taking votes.  Depending on the type of motion which the assembly is voting on, some methods of voting are better than others. For example, any vote which may be subject to challenge should be done by written or electronic ballot. This method provides a paper trail of the votes and can be re-counted and audited. For motions which are obviously going to be uncontested, it may make sense to take a voice vote by calling for "Ayes" and "Nays."

Here is an overview of the different methods of voting found in RRO:

1. Voice Vote

For a voice vote, the chair (after debate is over) instructs the assembly to say "Aye" or "Nay".  The chair, using their discretion, then announces the outcome.

2. Roll Call Vote

This may take much longer, but it provides a record of who voted "yes" or "no".  The chair reads through the names on the roll of the assembly, including those present by proxy, and records a yes or no vote for each member.

3. Standing Vote / Raise of Hand Vote

Similar to a voice vote, the chair asks all those in favor of the motion to stand or raise their hands. Then again for those voting no.  This is useful if the vote is close and a voice vote is too difficult to determine the outcome.  Remember though, if some members are holding multiple proxies (i.e. the owner is casting one vote for themselves and 4 votes on behalf of proxy givers) it may be complicated to get an accurate count.

4. Written Ballot

For any issue which may be contested, a written ballot is always the best course of action.  A written ballot provides physical evidence of who voted which way and the total number of votes for and against the motion.  Written ballots should be kept with association records for at least one year from the date of the meeting.

5. Electronic Ballot

By statute or bylaw provisions, many associations may use electronic ballots.  Many communities have seen a dramatic increase in voter turnout when using electronic or online ballots.  Electronic ballots work similar to written ballots in lieu of a meeting.  Here's an example of an online ballot: https://calaw.attorney/online-voting/

6. Unanimous Consent

For a series of procedural or uncontested motions, the chair may announce each item or motion and then ask the assembly to approve the motions by unanimous consent.  The chair does this simply by asking the assembly if there is anyone opposed to the motions.  If there are no objections, all motions pass without debate or discussion.

5 Ways to Invite Lawsuits Against Board Members and Associations

1.  Violating Open Meeting Requirements Board meetings in Oregon (by statute) must be open to the membership. The same is true for Washington condominiums or any community association with open meetings requirements in the governing documents. The purpose of open meeting requirements is to allow the membership to witness the deliberation, discussion, and decision making of the board of directors.

There are exceptions to the open meetings requirements--namely, emergency meetings and executive session. But unless an exception applies, any time a majority of the board convenes and discusses association business, it's likely a "meeting". And if it's a meeting, it requires notice and observation by the membership.

Violating open meeting requirements casts a shadow on board transparency, causes suspicion among the owners, and increasingly, may cause a lawsuit against the association or board of directors.

2.  Failing to Renew Incorporation

Most associations are incorporated as nonprofit corporations. In some cases, it's legally required that the association be incorporated. Incorporation may provide a shield against liability for board members and owners.

In a 2010 Alabama case, a homeowners association attempted to enforce its architectural restrictions against an owner who constructed improvements without approval. The Alabama Court of Appeals held that the association could only enforce the governing documents if the association was incorporated.

Georgia dealt with a similar case in 2007, when an association filed suit against an owner for delinquent assessments. The owner claimed that because the association had become administratively dissolved when it filed the suit, the association was prohibited from collecting assessments. During the course of the lawsuit the association filed the appropriate renewal paperwork and was reinstated with the secretary of state. As a result, the court allowed the association to pursue collections.

For Oregon associations, visit www.filinginoregon.com to check on the association's incorporation status.

Washington associations can search here: https://www.sos.wa.gov/corps/search_advanced.aspx

3. Failing to Enforce Governing Documents

Board members have an obligation to enforce the provisions of the association's CC&Rs and Bylaws. If a board fails to enforce provisions of the governing documents for an extended period of time, many courts will find that the association has "waived" its right to enforce the same or other provisions.

In an Ohio case, an owner built an addition on his property. The association sued the owner, arguing that the additional building violated the CC&Rs. The court said that because the association had allowed other owners to build unapproved additions, the association couldn't require the defendant in this case to remove the building.

Similarly, some governing documents require the association to make architectural decisions within a certain number of days. The association may waive its right to enforce those covenants if it misses the deadline to respond. In a different Ohio case, the association's documents required the board to respond to architectural applications within 30 days. When the owner didn't receive a response, he proceeded with construction. When the association told the owner he could not proceed, the owner sued and prevailed because the association didn't make a decision within the 30 day window.

4. Violating the Fair Housing Act

There are literally hundreds of court cases involving lawsuits against associations for violations of the Federal Fair Housing Act. Here are some examples:

Auburn Woods I Homeowners Association v. Fair Employment and Housing Comm., 121 Cal App 4th 1578 (2004). A married couple suffered from depression and other disorders. The association's governing documents prohibited all animals. The couple bought a small companion dog to accommodate their mental condition and a lawsuit ensued. The association was found liable of discrimination.

Jacobs v. Concord Village Condominium X Association, Inc., 2004 U.S. Dist. LEXIS 4876 (S.D. Fla., 2004). The court found that the defendant condominium association had violated the Fair Housing Act by refusing to allow a physically handicapped resident to install a ramp so that the plaintiff could freely store, access and charge her motorized tricycle in a storage closet in the condominium building.

Sabal Palm Condominiums of Pine Island Ridge Association, Inc. v. Fischer, No. 12-60691-Civ-SCOLA (S.D. Fla. March 19, 2014). A Florida district court ruled that a condominium association violated the Fair Housing Act by its unreasonable delay in granting a request by a physically disabled resident to keep a service dog.

Hollis v. Chestnut Bend Homeowners Association, No. 13-6434 (6th Cir. July 29, 2014). A Tennessee homeowners association may have violated the Act when it denied owners from constructing an exterior sun room which was designed to accommodate two children with Downs Syndrome.

Board of Directors of Cameron Grove Condominium, II v. State of Maryland Commission on Human Relations, No. 47 (Md. Mar. 28, 2013). A Maryland appeals court ordered a condominium board to pay damages to unit owners who were denied reasonable accommodation of their disabilities. Bhogaita v. Altamonte Heights Condominium Association, Inc., No. 6:11-cv-1637-Orl-31DAB (M.D. Fla. Dec. 17, 2012). A Florida court found that a condominium association's intrusive search for more information regarding a unit owner's medical condition constituted a denial of his requested accommodation under the Fair Housing Act.

5. Filing Incorrect Liens / Collecting Inconsistent Assessments

May lawsuits involve associations levying assessments which are inconsistent with the governing documents. In a 2004 Texas case, an association's governing documents capped assessments at $50 per month. Nevertheless, the board unilaterally raised assessments to $75 per month. An owner sued the association and the court ordered the association to reimburse the owner for the overpaid assessments, plus pay the owner's attorney fees.

In another case, the owner of a commercial condominium unit in Georgia filed a lawsuit when the association levied assessments against the commercial unit to pay for expenses related exclusively to the residential units. The court's review of the governing documents concluded that the association was prohibited from assessing the commercial unit owners for residential unit expenses.

Make sure you read the assessment provisions of your governing documents carefully, and that all assessments are properly apportioned among the owners!

Robert's Rules for Small Boards

Robert’s Rules of Order is the most effective tool to ensure efficient, civil, and effective meetings. However, sometimes the formality of Robert’s Rules isn’t necessary. For small board meetings it may not make sense to follow (the sometimes tedious) formal parliamentary procedure. Under Robert’s Rules a “small” board is 12 individuals or less. Robert’s Rules recognizes that small boards may want to operate in a more relaxed and informal setting. Small boards may opt to use the “Informal Procedure for Small Boards” described in Robert’s Rules, 10th Ed., p. 469-71. Here are the key differences between the formal and informal procedures:

1. Board members do not have to stand or be recognized by the chair in order to speak or make motions.

2. Motions need not be seconded.

3. A board member may speak any number of times on a question, and motions to close or limit debate are generally not permitted.

4. A motion does not have to be pending in order to discuss a subject informally.

5. Votes can be taken initially by a show of hands.

6. If a proposal is perfectly clear to everyone it may be voted on even though no formal motion has been made.

7. In putting questions to a vote, the chairman need not stand.

8. The chairman can participate in debate just as any other board member.

So, for small and informal board meetings it may make sense to use the informal procedures. If a majority of the board agrees to “opt-in” to the small board procedures, reflect that in the minutes and proceed under the informal procedures.