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

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!

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

Reduced Quorum for Oregon Condominiums and HOAs

Many homeowner and condominium associations have difficulty meeting the quorum requirement for annual ownership meetings. Unless a quorum is achieved, the meeting cannot proceed. The association’s bylaws typically contain the quorum requirement—usually a percentage of the ownership. 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).

Let’s walk through a hypothetical:

It’s Saturday morning and the annual ownership meeting is about to begin. The association’s governing documents require at least 30% of the ownership to be present in person or proxy. After everyone has checked in with the secretary, only 25% of the ownership is present in person or proxy. Assuming the notice of the meeting contained the required language, the new quorum requirement is 20%. And with 25% of the owners present, you’ve reached quorum!

If you’re interested in calculating your reduced quorum requirement, plug-in your numbers in the Oregon quorum calculator here.

Proxies for HOAs and Condominium Associations

Many community associations rely on proxies to meet quorum requirements for ownership meetings. Proxies are especially critical in communities where many of the owners may live elsewhere, or in communities where it’s difficult to get owners to attend meetings. Always check your governing documents and state law for specific proxy requirements. That said, here’s a general overview 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. This includes making motions, voting, and engaging in debate.

When to Use Proxies

Note that proxies are typically exclusive to membership meetings, and in most cases should not be used for board meetings. Oregon, for example, explicitly prohibits the use of proxies in board meetings. (ORS 100.419 & 94.641)

Types of Proxies

There are many types of proxies: general proxies, directed proxies, proxies for the purpose of establishing quorum, and combinations of general and directed proxies. General proxies are the most common type in community associations.

Who May be a Proxy Holder

Unless restricted 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 vs. 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 Emily Almberg for the board. However, as the meeting begins Emily decides not to run for the board, and Jane Smith steps into Emily’s place. Now, my directed proxy is useless (not quite useless, it still counts toward the quorum requirement).

General 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

Again, always consult your governing documents and state statute for specific proxy requirements.

Click here for a sample proxy: Sample Proxy

Meeting Minutes (Not Hours)

Over the last decade, I've seen hundreds of board meeting minutes.  Some of these minutes are 20 pages long and contain a summary of everything each board member said during the course of the meeting.  Please, don't do this. [Click here for an example of what meeting minutes should look like: Sample Meeting Minutes]

Robert's Rules of Order (11th ed.) contain very specific guidelines on meeting minutes.  Minutes should reflect what was done at the meeting, not what was said by the members.

The content of the minutes should include:

1. the kind of meeting (special, board, annual)
2. name of the association, society, or assembly
3. date, time and place of the meeting
4. names of those in attendance
5. whether the minutes of the previous meeting were read and approved (as read or as corrected)
6. all main motions
7. the outcome of the motion (in Oregon, ORS 94 & ORS 100 require the minutes to reflect how each board member voted on the motion)
8. points of order
9. hour of adjournment

That's it!  With these guidelines in mind, most meeting minutes should not be more than a page or two. There are a couple of special considerations that each board can decide how to handle.

1. Committee Reports: in small board meetings where the substance of a committee report is given orally, you may summarize the report in the meeting minutes. In most cases, a committee will deliver a written report which can be noted in the minutes and then attached as an exhibit if necessary.
2. Guest Speakers: Robert's Rules states that the name and subject of a guest speaker may be given, but no effort should be made to summarize their remarks.
3. Secondary Motions: In some cases secondary motions (motion to recess, motion to suspend rules) may be recorded in the minutes if it is necessary to record them for the sake of clarity or completeness.