Most of you will know, that those of us in the “HOA” industry have recently included open Board meeting requirements into both the Utah Condominium Ownership Act and Utah’s Community Association Act. The main point of ‘open meetings’ is to help avoid Board actions being done without any owner participation, knowledge or involvement. This helps avoid suspicion and sometimes abuse of authority.
As such, all HOA’s in Utah are now subject to ‘open’ Board meetings, with certain topics still allowed to be discussed in private (“executive session”).
For a closer look at the open meeting laws, see Utah Code Ann. 57-8-57 for condominium communities and Utah Code Ann. 57-8a-226.
The purpose of this entry is to discuss whether or not Boards can lawfully take action without holding a meeting at all – such as by phone call or by email?
I trust you can see both sides of this issue: 1) members may want all meetings to be open to any member that wants to attend; and 2) Board members often times need to make prompt decisions and do not have time to call a formal meetings. How is this dilemma resolved?
Utah Code Ann. 16-6a-813 provides the answer and DOES allow Boards to take action without a meeting. And, you guessed it, if there is no meeting, there is no owner participation. Section 813 does not even place limitations on the type of issues that can be discussed in this type of forum or how frequently such meetings can be held.
I want to be as concise as possible, so I will refer you to Utah Code Ann. 16-6a-813 for the full text of the statute.
Here is the bottom line:
- Unless your bylaws state otherwise, the Board may take action without a meeting if all of the Board members consent to the action in writing. This means that no Board member has revoked their consent to the action; OR
- Unless your bylaws state otherwise, action without a meeting may be taken if notice is given in writing to each member of the Board and the notice contains a reply deadline. Further, by the deadline stated in the notice, each member of the Board has either (a) signed a writing approving the proposed action or signed a writing against the action; or (b) abstained in writing from voting; or (c) fails to respond or vote.
- After step 2 above, you now know your vote count of the Board on a given issue. Now, we need to see if any Board member has demanded in writing that the action NOT be taken without a meeting. If this type of demand is made, you may not continue with the action without a meeting. You must hold a regular “live” meeting.
- Assuming no Board member has demanded that action NOT be taken without a meeting, then we have to look at the participation and vote.
- If a Board member votes in favor, obviously you count that as a YES vote for the matter;
- A NO vote is simply a no vote;
- If a Board member dose not respond by the deadline, then the effect is that of abstaining.
- So, you then look to your voting approval threshold for a Board vote in your Bylaws. Let’s assume you have 5 Board members. Notice of action without a meeting is sent around via email and a vote is requested on a topic by a certain deadline. Also assume that your quorum for a Board is a majority of Board members, which in this case would be 3 Board members.
- Now assume that 2 Board members vote in favor, 1 votes against and 2 do not respond. Do we have a binding decision? YES. A quorum was present (3) and a majority of a quorum (2) can take action. 2 simply abstained and are not counted. They key is you had a quorum and a majority voted in favor.
- The Board is not penalized for an abstention but the entire concept of Board action without a meeting is defeated if by the deadline for a response, a Board member demands that the action be taken in a “live” meeting and not via “action without a meeting.”
In sum, even with the adoption of the open meeting laws cited above, there was never an intent to NOT allow Boards to take action without a meeting. However, the more you use this “tool,” the more your Board may be scrutinized. At Richards HOA Law, we advise that you use Board action without a meeting sparingly; primarily for emergencies or other urgent types of situations. This will help avoid scrutiny from your members while allowing this important statutory provision to stay in place without someone attempting to modify it.
As always, there are details that are not addressed herein. Each case may be different. This blog entry is for general education purposes only and must not be relied upon as legal advice for any specific association or situation. Please contact our offices at 801-274-6800, or email us at: firstname.lastname@example.org or simply check out our website: http://www.richardshoalaw.com
We look forward to seeing you at our next HOA University to be noticed and held in late July, 2017.
Thanks everyone – John Richards, Esq.