A Meeting Primer: Is this a Board Meeting? An Association Meeting? Does it Matter?
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ecently, after I had completed a presentation for community associations, a director of an association approached me to ask a question about a meeting the association was planning. When I asked whether it was a meeting of the board of directors or a meeting of the association membership, I was sure I must have asked the question in Greek based on the look the director gave me. (For the record, I am not Greek and don’t speak Greek. I am, however, reasonably fluent in English most of the time.) His next question: “What difference does it make?” As I explained to him, it makes a big difference. The basics of association-related meetings
Board meeting vs. association meeting While a board of directors typically has significant power to administer to and govern the association it serves, some matters and decisions must be addressed by the association membership. If a decision that is supposed to be made by the association membership is made by the board alone, the effectiveness and enforceability of that decision may be called into question. Conversely, if the board repeatedly allows association members to vote on decisions that should be made by the board—on issues within the board’s purview—the board gives the membership the impression that association members are entitled to vote on such matters. That practice may create difficulties if the board later seeks to make a decision on a similar matter without a vote of the membership. Association members may cry foul, since the board has created an expectation that the vote of the entire association membership is not only needed, but somehow required. Once a determination is made as to whether the issue at hand is a decision for the board or for the association, the board must then ensure that the proper notice requirements are followed. There are, in fact, differences in notice requirements for an association meeting and for a board meeting. Using the wrong notice provisions can jeopardize the validity of decisions made at that meeting. 10
Minnesota Communit y Living
It is important, then, for both associations and boards to have a clear understanding of what matters are within theboard’s purview, and what matters require meetings of the association membership. Typically, the board is empowered and authorized to make decisions regarding: • Budgeting and collection of assessments • Adopting, changing or revoking rules • Determining late fees and fines for violations of the association’s governing documents • Engaging the services of professionals— attorneys, property managers, vendors, etc. • Maintaining the common areas and those portions of units which the association is obligated to maintain • Appointing, regulating and dissolving committees1 On the other hand, some decisions require the participation of the association membership. These issues include: • Amending the declaration, bylaws or articles of incorporation • Removing a director before his or her term has expired • Electing directors Open meeting of board vs. association meeting Under the Minnesota Common Interest Ownership Act (Minnesota Statutes Chapter 515B), commonly known as “MCIOA,” meetings of the board of directors must be open to all unit owners to attend.2 Some homeowners—and indeed, some boards—believe that being permitted to attend a board meeting is the same as being permitted to participate in that meeting. That belief is erroneous. In associations working under that misguided premise, many decisions within the purview of the board of directors are “voted on” by the association membership at a board meeting. Such votes can create several misperceptions: (1) that the meeting is actually a meeting of the association rather than the board; (2) that the issue is one that requires a vote of the association members rather than the board alone; (3) that association members are entitled to participate in
By Nancy T. Polomis, Esq.
board meetings and that the members’ votes are binding on the association. For those associations governed by MCIOA or whose governing documents require open board meetings, it is important for the board to establish clear guidelines for the administration of board meetings. Boards must be clear with homeowners that, once any “open forum” an association may allow is completed, homeowners not serving on the board are welcome to stay for the meeting (provided, of course, it is not a closed meeting, as permitted under MCIOA in certain circumstances), but may not participate in the meeting unless invited to do so by the board. Homeowners are, in essence, an audience for the board meeting: they are not permitted to participate in discussions, offer opinions or information or vote on matters before the board. By establishing clear ground rules from the outset, a board of directors can avoid disputes and controversy about the homeowners’ role in board meetings. Regular meeting vs. special meeting Most meetings of the association and the board of directors are “regular” meetings, scheduled and held in the normal course of business. A board of directors generally deals with, for example, budgeting issues, collection issues, and contracting with landscapers and roofing contractors in the board’s normal course of business. Generally, the routine business for association members consists primarily of electing directors each year at the only “regular” meeting of the year—the association’s annual meeting. Occasionally, however, business of the association or the board requires immediate attention. Storm damage may require emergency board meetings to engage contractors. Health or safety issues may require the board to call a special meeting to make decisions on matters that simply cannot wait until the next regularly scheduled board meeting. For associations, controversy regarding board membership may result in a special meeting at which a vote to remove one or more directors may be considered. If the association is amending its governing documents, A Meeting Primer continued on page 18