What does the term "member in good standing" mean in association documents?

We are often asked if an owner can be prevented from voting when the association declaration or bylaws state that an owner who is not in good standing may not vote or that their vote will not be counted.  Most board members and managers think this means that an owner who is delinquent in his payment of assessments cannot vote. Without further definition in the documents this is a correct interpretation.  Some people think that it also means that if an owner has been found in violation of the covenants or rules and has not cured the violation or paid a charge made after a due process hearing that the owner cannot vote.  Unless the documents specifically provide for such we believe that “not in good standing” is limited to delinquency in the payment of assessments. 

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Executive Session - Getting it right

We have found that there is frequently confusion about how to go into and come out of an executive session (aka closed session) of the board of directors.  The governing statutes are Section 55-79.75 (C) of the Virginia Condominium Act and Section 55-510.1 (C) of the Virginia Property Owners Association Act. A motion must be made, seconded, voted on and passed proposing to go into executive session for one of the purposes set forth in the statute which are as follows:      

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Executive Sessions - a frequently misused procedure

In the course of dealing with a myriad of issues that arise in association governance one of the most misunderstood and misapplied statutes is the one that provides for executive sessions which are sessions of the board of directors closed to other members. The rules of the road for executive session are spelled out in the statutes in both the Condominium Act and the Property Owner's Association Act. We believe that a couple of reasons the procedure is not utilized correctly is that it is technical, not easily located and adherence to the requirements is sometimes inconvenient. So at the outset of this article we want to quote the statutory provision that applies. It is as follows:

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What to do when your board is deadlocked

Recently we received the following question the answer to which could be helpful to many of you.

Q.       Our condominium has a serious need for some renovation work on windows, doors and some balconies. It is going to cost around $3,000 a unit as best we can tell right now. One contractor we consulted said it was not urgent and that we could do it over a period of time. Another contractor indicated that he thought the deterioration would accelerate and we needed to do all the work right away. The Board is divided on which way to go, and right now we only have four Board members, and it is a 50/50 split. Our next election is September and we cannot agree on a new Board member either. We have been at this standoff for four months now, and we need to move ahead with some plans, but we do not seem to be able to do so. Do you have any suggestions?

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The Secret to Secret Ballots

For years we have encouraged associations to consider colored paper for voting forms. It makes them easy to spot and provides additional security against claims of stuffing the ballot box. Having survived more than a few challenges, in and out of Court, to claims of invalid Amendments, the single most effective way to defend these cases is to be able to establish how the votes were cast.

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What Can Be Done When a Quorum is Elusive?

Q:      As a board member of a large condominium association, I am trying to figure out how we can have our upcoming annual meeting if we don't get a quorum of members present. Our bylaws say we have to have fifty percent of our owners present in person or by proxy to have a quorum for a meeting. That is 90 members. We did not achieve that number last year and could not have the meeting and elect new directors. What can we do to have a successful meeting?

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Protecting the Community from Abusive Owners

 

Question

Our association just got started and has read through the VA HOA blog a lot!  It has been a big help to us!

I had a question about the legal responsibility of a HOA board to respond to its members.  We are a volunteer board, and there is one member of our community that is constantly sending emails (averaging 6 a day), certified letters, and posting inflammatory comments on Facebook and on our association home page.  He recently sent one email documenting the number of emails he had sent us that had gone unanswered.  He also attends board meetings and attempts to control the agenda and speak over the board, out of turn, and spending more than the allotted time on issues.  We are a board of 8 neighborhood volunteers.  With jobs, kids, and lives outside of the realm of the HOA, I just don't understand how we possibly could respond to all of his emails.  Is there a legal requirement that we respond to every email he sends?  Or is there a legal guideline for determining which correspondence requires a response?  Also, how can a board effectively manage people who are disruptive at a meeting? What advice would you offer to an association that deals with one particularly time-consuming member?

AN UNPAID VOLUNTEER TRYING TO DO THE RIGHT THING


 

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ACTS OF MALICE

Acts of Malice

Q: My homeowners association passed a resolution that allows the board to suspend a member's voting rights and attendance at board meetings indefinitely due to acts of malice, such as verbal assault or menacing gestures, toward board members. Whether something is an act of malice is determined by the board members themselves. Can a homeowners association take away a member's voting rights indefinitely and restrict attendance at the meetings?—Alexandria, Va.

A: The first issue is the suspension of voting rights and the second is the prohibition from attending board meetings. I question the legal propriety of a board resolution that suspends a member's voting rights. What do the governing documents say about the suspension of voting rights? Who has the power to suspend voting rights?

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Proxies - a trap for the unwary?

PREPARING PROXIES FOR A MEMBERSHIP MEETING – A TRAP FOR THE UNWARY

Sometimes we have the unhappy duty of telling a client that the proxy they have sent out (or, worse, used) for a member meeting was invalid due to lack of compliance with the Virginia Condominium Act, or simply doesn't constitute a proxy.   It seems that many folks think that a proxy is something that is simple to do and should not require professional assistance.  Unfortunately that is not the case.  There are also a couple myths about proxies that we need to dispel.

 

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Members Participation at Meetings

Question:

I understand that the elected Board members are the only persons able to make motions and vote on them at a "Board Meeting." Is it true that at a "Membership Meeting”, either Annual or Special, that the members have the right to vote on issues affecting them, such as election results, budget proposals or even reversing or rescinding actions the Board may have taken?

 

In short, the association members are not just an audience to the Board at such "membership" meetings, it is actually their meeting, which is usually Chaired by the President of the Board, with all the rights to vote and make and second motions.  Am I correct in this assumption?

 

Answer:

 

You are correct that the issues which are discussed and voted on at meetings of the board of directors are subject to discussion only by board members. However, the Virginia Code does allow homeowners to be present and there must be some time allotted at each such meeting for owners to address the board about any issue pertaining to the association.  This is generally referred to as the “owners forum.”  Time limits may be imposed.

 

The manner of conducting annual and any special meeting of members/owners are largely dependent on the provisions of the Bylaws for your particular Association. For example, in almost all cases the Bylaws will provide that the members have the right at the annual membership meeting to vote for election of the Board Members whose terms are expiring.  Also, together the Declaration and Bylaws likely will set out what powers the Association has as a whole, and which, if any, of those powers can be exercised by the members exclusively, rather than the Board.

 

Unlike Board meetings, there are no hard and fast rules about how the agenda is developed, what the level of comment and discussion is to be allowed from the individual members and whether there are votes taken on those items. You are most likely to find information related to Board and Member meetings in your Bylaws and suggest you start by carefully reviewing those provisions. Also you may find that your Bylaws provide that your meetings are governed by Roberts Rules of Order which is the internationally recognized authority on the conduct of meetings of all types of organizations. The Virginia Code does limit comments by members at these meetings during the owners’ forum to items appearing on the agenda, and, again, members may be given a time limit.

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Required Notice for Meetings

QUESTION: I live in a condo association where the Board regularly has meetings, but does not regularly give notice of those meetings to any of the unit owners. On the occasions when they do give owners notice of the meetings, they do not always give the owners a copy of the agenda or subject matter of the meetings. What is the Board required to do with regard to giving prior notice and circulating copies of the agenda to unit owners?   

RESPONSE: This issue is covered by Section 55-79.75 of the Virginia Condo Act. First, it is important to distinguish between unit owner meetings (which generally occur only once per year), and board/director meetings (which may occur regularly throughout the year). 

Subsection (A) of the aforementioned Code section states that all owners must receive prior written notice (via regular mail or hand delivery) of all unit owner meetings. That notice must state the date, time, and place of the meeting, and must also state the "purposes of such meeting," which essentially means that the unit owners must either receive a formal agenda, or at least be given some indication of what will be discussed, decided, or voted upon at the unit owner meeting.

Subsection (B) of the aforementioned Code section applies to meetings of the executive organ (Board of Directors). These requirements are slightly different than the requirements for owner meetings. For Board meetings, the Board must publish notice of the time, date and place of the upcoming meeting in a place "where it is reasonably calculated to be available to a majority of the unit owners." This does not specifically require that written notice be mailed to the owners, nor does it require that owners be provided with an advanced copy of the meeting agenda. 

Subsection (B), in its discussion of Board meetings, later states that an owner can make a written request to the Association that he/she be provided written notice of all upcoming Board meetings, and the Board must honor that request. The unit owner making that request must submit it in writing at least once per year to the Association. 

Further, the information that is being provided to the Board members in preparation of their Board meeting (commonly referred to as a "Board packet") must be "made available for inspection" to the unit owners "at the same time such documents are furnished to the members of the executive organ." This does not mean that each unit owner is entitled to have an agenda or board packet mailed to him prior to each board meeting, but instead only requires that the Association manager (or whoever handles these affairs) make the board packet available for inspection at the same time the Directors receive this information prior to the meeting. Please note, however, that any documents in the Board packet relating to matters that the Board can discuss confidentially in 'executive session' may be lawfully excluded from the packet available for inspection by all unit owners.

Thus, in summary, the Board is obligated to send prior written notice and agendas to all owners in advance of any unit owner meeting. For Board meetings, the Board is only obligated to make a reasonable good-faith effort to publish notice of the meeting to all unit owners (which may be mailing out notice to everyone, putting notices on a bulletin board or in the elevators, posting on the Association website, etc.), unless a unit owner sends the Board a written request, at least once per year, asking for written notice of all upcoming meetings. The Board is not, however, obligated to mail out copies of an agenda prior to its Board meetings, but must honor the request of any unit owner wanting to inspect the board packet prior to the upcoming board meeting.

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Ballot Votes

QUESTION:

If each unit in the community is assigned a percentage vote because of the size of the unit, and a 51% “yes” vote is called for to proceed with something on the ballot, but not 100% of the units are voted, then is a “yes” decision determined by the number 51, or is it determined by 51% of the units that were voted?  We recently had a 45% “yes” vote to a 42% “no” vote, and it was determined that the item needed 51% instead of 45% to make it a “yes” vote.

ANSWER:

Generally speaking, some votes require a percentage of a quorum, and other votes require a percentage of the entire membership/ownership of the Association.  Thus, the answer to your specific question is to see what your documents require. 

Please note that the required consent for some votes is dictated by the provisions of the Virginia Code.  A vote to amend the Declaration or Bylaws of a condominium, for example, requires a 2/3 vote of the entire Association, regardless of what the governing documents say, because this 2/3 vote is required by the Virginia Condominium Act. 

Aside from the votes for which the Code dictates the required threshold, all other votes and consent procedures would be dictated by your particular governing documents.  An Association's Bylaws might state that certain matters get put to an owner vote requiring ___% of all owners, or might state that a passing vote must have ___% of a quorum of owners. 

A quorum represents some number of owners which is less than the entire membership, and therefore a vote requiring 25% of a quorum takes less votes than one requiring 25% of the entire membership.

 

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Board Member Emailing

IS BOARD MEMBER EMAILING A VIOLATION OF THE OPEN MEETING REQUIREMENTS?

        With more frequency I am being asked whether, and to what extent, Board Members are entitled to communicate with each other by email.  A typical questions that is asked is: "After a solicitation of bids, we received a couple of bids for a major project in the community and the board members have been given a copy of the proposals.  There then ensued an email exchange amongst the board members analyzing and discussing the bid packages.  In order to get the project going before the next board meeting which is three weeks away, the President wishes to poll the board members on which contract to accept in order to move forward with the project.  is this permissible?"    

        The answer is clearly no, but the subsidiary question is, if that is the case, how much discussion can be held by board members via email (or telephone conference call, for that matter) without violating the open meeting requirements?

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Failure to Install New Officers / Closed Meetings

Question:  My HOA is planning to have the annual meeting next month and vote for board of directors. The issue is, the last annual meeting was October, 2006 where officers and board members were voted on, for a one year period. Their terms expired in October, 2007. They are still acting as if they are a board. I have challenged them on this, yet they have ignored it. They are also including changes to the voting procedures in violation of the bylaws, and all board meetings have been "closed" although I have informed them of the VA requirement to have them open. Is there a legal way to stop them?

Response:  With regard to board members serving past the end of their terms, this is generally permitted by the bylaws if no election has been held to replace them. If no meeting of the members was called (annual meeting) in order to have an election, this is improper and written formal demand should be made for a meeting to be called. You should engage legal counsel familiar with the operation of associations to assist you in this matter. Closed meetings of the board are not permitted by the statutes of Virginia, except for the discussion on certain topics specified in the statutes. We would hope, and expect, they would respond favorably to a demand letter from your attorney which explains the legal requirements.

Michael A. Inman, Esquire

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Proxies

QUESTION:  I live in a condominium association which has a management company.  Every year they have an election of officersfor which the management company sends out proxies to owners.  Some owners on their own have taken the official proxy and made up one of their own and mailed them to the homeowners and they have marked who they want the homeowners to vote for.  Can they do this and is it legal?

RESPONSE: 

There is no legal requirement that proxies used in an Association meeting must be the official form distributed by the Board or by the Association Manager.  So long as the proxy complies with the requirements of law, and with any requirements contained in the Association's governing documents, it should be accepted and counted as a valid vote, even if it is a "homemade" proxy. 

 Greg Montero

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Elections

Q:  Elections are coming up in our self managed association. From some of our discussions it seems that everyone doesn’t agree on how to use proxies. What suggestions can you give us to have a smooth and successful election process?  Who can hold a proxy for a member?  Does it have to be a board member or an officer of the association? What can we do if we don't have a quorum of members?  Can you count the proxies toward a quorum?

A:  These are important and frequent questions and a good understanding of the process and proxies is important. 

First, to have an election you need candidates. Often that is a problem for associations and one reason that some are putting in limits on the number of units that can be rented.  Generally absentee owners are not particularly active in the association's affairs.  You should start "recruiting" candidates for board positions months in advance of elections. You need to let your members know that the board is looking for interested homeowners to serve on the Board or as committee members.  Ask members who may be interested to come to a board meeting and, after the meeting, familiarize them with board or committee participation requirements.

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Budget Meetings

QUESTION:  I am on the Board of Directors for a condominium association.  We have our budget meeting for 2008 coming up.  This is my first year on the board and another board member stated that last year, they had a planning session at our managing agent’s office.  Do we have to advertise and have an open meeting every time the board meets?  Is this type of meeting/session legal?  We have already been accused of being secretive, however I feel the accusation is unfounded.  I just want to make sure we do everything legally.  Thank you.

RESPONSE:  The short answer to your question is yes, the upcoming budget meeting needs to be an "open" meeting for which all owners are given proper notice and the opportunity to attend.  You should review the provisions of Section 55-79.75(B) of the Code of Virginia (part of the Virginia Condominium Act), which requires that all Board meetings be "open," including meetings of committees or subcommittees.  This law was passed specifically for the purpose of preventing boards from acting in secret without giving the owners the chance to attend meetings or know what's going on, so your Board should be particularly diligent about complying with this law if owners have complained about secret board meetings in the past. 

The only exceptions to the requirement of having an "open" board meeting are listed in 55-79.75(C), which says that the Board can go into "executive session" (closed to non-board owners) to discuss legal matters, owner violations, contract negotiations, and other specific topics.  Even in those cases, however, be mindful of your obligation to still give notice of the meeting, properly convene the meeting, then make a motion to go into executive session, and reflect in the minutes why the meeting went into execution session.  

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Disruptive Owners

Q.        We have a resident who attends every board of directors meeting. While the Board welcomes all of the owners and encourages them to attend, this guy seems to think our meetings are his stage. He constantly interrupts speakers, attempts to make motions from his chair and generally is obnoxious to everyone. Is there anything we can do to get him to behave or exclude him from meetings – he is preventing us from making progress on several issues.

A.        If there ever was a situation that demands courtesy and respect it is the community association meeting. For many people, homes are emotional issues, and as a result, many owners do not always act rationally when dealing with issues that affect their homes. Also, many folks are not accustomed to dealing with issues affecting their homes in cooperation with a large group of other owners.

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Condominium Living

Q.        We are retiring to the Hampton Roads area and are thinking of buying a smaller home. Because we do not want to do a lot of exterior maintenance, one of our considerations is a condominium.   We are concerned it may not suit us because we would live so close to our neighbors, as well as under the community's rules. Do you think we should consider buying a condominium?

A.        The answer to your question is yes.

First, remember that a condominium is not a type of housing but simply a form of ownership. Your choices include condominium flats, townhouses, single-family detached homes and even trailer parks. Typically condominium ownership means you own your "home" or "living space" the same as you would a traditional single?family home and you own all the common elements 'together" with the other owners. The common elements differ from community to community and sometimes you do own some yard area as part of your “unit”. Generally common elements include the exterior walls, the roof, parking lot, grounds and any recreational facilities.

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Elections

Q:       We will be having our annual elections in October. Last year we didn't know most of the candidates were who were on the ballot. It seems that there must be a preferred way to run these HOA elections. Can you give us some pointers on elections so that we can improve our process?

A:       Thanks for bringing up this important topic. Nothing is more important in community governance than having an active and effective board of directors. The board is the key governing body that is required to make decisions affecting the whole community from managing the funds to hiring vendors for the various tasks required to keep the community facilities in top condition. You certainly want the most qualified people who are willing to step forward and volunteer for the position. Here are a few tips for having a successful election.

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Quorums

Q:As a board member of a 180 unit condominium association, I am trying to figure out how we can have our upcoming annual meeting if we don't get a quorum of members present. Our bylaws say we have to have fifty percent of our owners present in person or by proxy to have a quorum for a meeting. That is 90 members. We did not achieve that number last year and could not have the meeting and elect new directors. What can we do to have a successful meeting?

A:There are a couple things we can suggest. First, check your documents to see if you have a provision whereby the quorum requirement is reduced for a subsequent meeting called within a short time for the same purpose when a quorum is not achieved. Some documents reduce the requirement by as much as one half.

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Board Emailing

IS BOARD MEMBER EMAILING A VIOLATION OF THE OPEN MEETING REQUIREMENTS
OF THE CONDOMINIUM ACT AND THE PROPERTY OWNERS ASSOCIATION ACT?

With more frequency I am being asked whether, and to what extent, Board Members are entitled to communicate with each other by email. A typical question that is asked is: "After a solicitation of bids, we received a couple of bids for a major project in the community and the board members have been given a copy of the proposals. There then ensued an email exchange amongst the board members analyzing and discussing the bid packages. In order to get the project going before the next board meeting which is three weeks away, the President wishes to poll the board members on which contract to accept in order to move forward with the project. Is this permissible?"

The answer is clearly no, but the subsidiary question is, if that is the case, how much discussion can be held by board members via email (or telephone conference call, for that matter) without violating the open meeting requirements?

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Keeping Records

Q.I have recently been elected Secretary of my association. I want to make sure I do a proper job of keeping the minutes and records of the association. Should I make an audio recording of the meetings? Can you provide a checklist for me to follow?

A.The primary function of the Secretary is to maintain the records of the association, with the exception of the financial accounts. This includes all of the minutes, any resolutions adopted by the Board of Directors, correspondence, contracts and notices. The best way to accomplish that is by having an organized filing system.

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Voting - Getting It Right

It hardly seems fair that once you have finally corralled the requisite number of people to a meeting, the job is not done. We all know how hard it is to manage an Association in the face of apathetic owners. Where we have seen more potential for problems is beyond the point of obtaining a quorum. This review focuses on voting, a who-what-how review of the current, and sometimes confusing, issues surrounding the process.

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