Annual Meeting
Hello Dennis,
Thanks for having me aboard and the important information that you pass on to people on this website.
Rather than make several singular posts, I’m going to try to ask questions here and hopefully flow it correctly.
Our HOA will be holding the Annual Meeting late in April. At this point they are in the stages of accepting nominations for the board.
For the last few years we didn’t meet quorum and the board ended up appointing a member each year due to members moving out of the community. It appears that every single position is open now.
My first question is this, if we don’t meet quorum, what can I do as a homeowner to hold the HOA and the Management company to hold an official meeting. I’m assuming based on what I’ve read that the HOA and the Management company aren’t doing what needs done to have an “official” meeting. Perhaps it’s a convenience for one of the entities or both to keep the board as is.
If we don’t meet quorum, is there a law to quote or something to say to have them continue until we meet the requirements?
Second question and this one I haven’t seen addressed or perhaps I missed it. Can the HOA Board hold a meeting without the management company present? If a new board is elected and decides they want to change management companies or explore that possibility. How do they do this?
I’ll stop here for now. Thanks for your assistance.
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Fred,
The law requires that an annual meeting of the members be held. It does not state called. If the required quorum is not achieved the meeting is not held and must be reconvened as many times as required to hold the meeting. The board can call meeting after meeting or change the quorum requirements to something more reasonable. The annual meeting is where the board positions are filled. While a quorum of the board can fill a vacancy in the board for the remainder of that term, they have no authority to elect or appoint a board member to a new term. This statute is often ignored as there are many communities in this state that have never held elections at all based on high quorum requirements. These quorum requirements can in most cases be changed by the board, but they don’t want to because they believe that they can extend their terms without needing elections. The statute for a planned community is ARS 33-1804 section B.
The association board runs the community not the management company the board can do whatever it wants with or without the community manager. The community manager works for the board and not the other way around. The board can hire and fire any contractor at will and often with or without cause. You would have to look at the current contract between the association and the management company for the termination provisions within that contract. Typically it requires 30 days notice.
Dennis
Thanks for the reply Dennis.
I’m going to make it simple. If we need 200 votes to meet quorum and only receive 170. The board President would say something like ” Since we didn’t meet quorum, we can’t hold the annual meeting” and closes out the annual meeting. This is the way it has been done in the past.
Before he closes it out, I can simply state this is a violation of ARS 33-1804 section B and then the board will have to take some sort of action to meet quorum so that the annual meeting takes place.
But let’s just say, I quote the statute, they blow it off and still close out the meeting? Then what? Game Over?
Regarding the Management Company, yes they answer to the board and the board answers to the community. If I’m understanding you correctly, the board can have a meeting WITHOUT the management company present but it would still have to be open to the public of which I’m sure the management company would show up as being part of the public. I’m assuming there’s no way around this if it got to that point.
Fred,
Fred the law requires that a meeting of the members must be held one a year. if the meeting is called and a quorum is not present it can not be held. So, what the board did violated the law. They were required to either change the quorum requirements or continue to call meetings until a meeting was held in that year. Terms for board members have expired and they need to be filled. You cannot continue a term indefinitely, because you cannot satisfy quorum. The board has the power to go thru the community and make sure that they get the required quorum at the meeting or change the quorum requirement to be more realistic.
They can be held liable for violating the law via either a suit in superior court or a petition to the Dept of real estate and an administrative law judge.
Community manager are not members of the community so they have no right to attend any meeting of the board or the members without being invited to that meeting by the board or the members.
Dennis
Thanks Dennis.
The excuse in the past has been the cost of re-doing the meeting and sending out ballots again.
In my example of being 30 short, can it just be canvassed to get the remaining 30 or does the whole process have to start over?
What time frame is involved if any?
Thanks
Fred,
Absolutely nothing has to be redone. If a meeting cannot be held because it did not achieve quorum than the meeting never occurred. Robert’s rules would establish that the meeting be reconvened at another time within 15 days. Any absentee ballots would still be valid and any members that had not submitted a ballot earlier could send one in for the reconvened meeting. Those voting in person could also be increased to satisfy quorum for the second meeting. Some communities have a scaling quorum that is reduced in half every time a quorum is not meet. The association waits 15 minutes and sees if the meeting can now be convened if not it is reduced in half again and finally held. The other issue is that the quorum requirement can be changed by the board to be more achievable for the community, as long as the quorum is specified in the bylaws and not the cc&r’s. 10% for large communities’ or 20-25% for smaller to mid-size communities. The issue is if the board really wants to hold the meeting required by law, they will do everything in their power to turn out the vote the first time to reduce the cost of room reservation and mailings. Failing to meet quorum is a board issue not a membership issue. An annual meeting of the members is not and has never been optional. The election of board members must be conducted every year and once boards finally acknowledge that fact, they will work to make that happen.
Dennis