Planning Keeps Annual Meetings Sane
QUESTION: The annual meeting for our 200-unit homeowner association is often a time when the board of directors receives a lot of criticism from the owners. Last year, the board president was disorganized and became angry when the owners expressed their frustration. The atmosphere was ruined and the board president was not reelected, primarily because the owners felt that he showed poor leadership.
Since I am now the board president, I want to be prepared for the next annual meeting so that it runs smoothly and efficiently.
What advice can you give to me and our board members so that we can get a quorum and have a pleasant business meeting?
ANSWER: As you have witnessed, an annual meeting can be a frustrating experience for not only the person conducting the meeting, but also those who are just the attendees.
Planning is important but you must also review the requirements in the association’s legal documents to be sure that you are complying with all aspects of the meeting procedures.
About three months prior to the date of the annual meeting, read both the association’s declaration of covenants, conditions and restrictions (CC&Rs;) and the bylaws to find out about board member term limits, proper notice, voting percentages, quorum requirements and nominating committee requirements.
At the board meeting three months prior to the annual meeting, discuss with your board members the agenda items, especially those that require advance planning such as proposed CC&R; amendments or bylaw changes.
The most important agenda item is the election of the board of directors. The annual budget is a hot topic at many annual meetings when, in fact, it is not an action item for the members.
Another important agenda item is the association’s tax requirements. To comply with Internal Revenue Service regulations, I recommend that the members approve the allocation of any excess income for the current year to be used to reduce the assessments for the next fiscal year.
The board should discuss appointing a nominating committee and if they choose to do so, make sure that it is set up in accordance with the legal documents.
If the association does not have sufficient space to have an on-site meeting, choose a location and appoint someone to make the arrangements for room rental and any special needs such as the rental of chairs, podium, microphone and other equipment.
Before confirming the meeting date, determine if the association’s attorney is available to attend, if needed. Legal questions often arise during the election and the attorney should be well-versed in handling any unforeseen occurrence or controversy.
Two months prior to the meeting, the board should review the first draft of the contents of the mailing to the owners, including:
1--the official notice of meeting
2--the agenda for the meeting
3--the proxy form, which must give the owner the option of designating the proxy for quorum purposes only for voting
4--cover letter with pertinent information about the location with directions and parking information.
The proxy should include the names of any individuals who have been nominated at the time that the notice is mailed.
If the association documents provide for suspension of voting rights of owners who are delinquent in paying their assessments, the board should send proper written notification to the delinquent owners giving them an opportunity to appear at a hearing prior to the meeting.
One month prior to the meeting, or as directed in the bylaws, the meeting information should be mailed to all the owners. Some associations include a return envelope with prepaid postage to encourage the return of the proxy.
The board should organize a proxy gathering campaign if good attendance seems doubtful. Most associations require 50% or 51% attendance for a quorum.
The secretary should see that copies of last year’s annual meeting minutes are available to bring to the meeting so that the minutes can be approved by the members.
Two weeks prior to the meeting, the president should designate the officers and committee chairmen who will present reports at the meeting, decide on potential inspectors of election to verify proxies and tally the votes, plan some type of recognition or awards for the volunteers who have served on the board or committees, and decide on refreshments, if desired.
One week prior to the meeting, confirm any special arrangements for the meeting room, remind board members about their proxy gathering duties, and put together the meeting materials which may include:
1--oath of the inspector(s) of election stating that they will oversee the voting procedure with fairness and diligence
2--a form or affidavit that the secretary will sign regarding the number of persons voting and the number of proxies held
3--an official tally sheet for counting the ballots
4--the ballots
5--a copy of the legal documents to have at the meeting for reference
6--sign-in sheets to register the voters, some extra pens, name tags
7--copies of the agenda and last year’s minutes
8--other handouts pertaining to agenda items
9--awards, if desired.
The president or secretary should get additional volunteers to assist in the registration of the voters and make arrangements for ballots with the voting percentages, if required.
This advance planning and organization will help to make your annual meeting a better experience for everyone. Remember to check the requirements in the legal documents as you go through the planning stages since some of my advice may conflict with specifics in your documents.
Failure to adhere to the legal documents could result in a contested election. If you have questions about the interpretation of the documents, contact an attorney who specializes in community association law. A property management company that specializes in the management of community associations will be able to assist you if you need advice about the content of the meeting notice, the agenda or the effective methods of registering the proxies and voters.
