Written by Benny L. Kass
Question. I am on the Board of Directors of a small condominium association. The annual meeting is scheduled for August, but we would like to begin preparing for that meeting as soon as possible. None of us have any real experience, and would like your comments on how to conduct a proper and efficient condominium meeting.
There are three kinds of meetings generally conducted by condominium and cooperative associations. There are Board meetings — where the Board periodically meets to conduct the day to day affairs of the association. There are special meetings — which can be called either by the Board of Directors itself or by a specific number of unit owners. A special meeting can only discuss and vote on the issues raised in the call for that special meeting. For example, if several unit owners are concerned about expenditures, and do not want the Board to authorize such expenditures, the membership can request that the Board schedule a special meeting for the limited purpose of discussing and voting on those expenditures.
Finally, there is an annual meeting, and the purpose of this meeting is to inform all of the unit owners of the events that transpired during the previous year, discuss future plans, and — most importantly — elect Board members for the next year.
Any discussion of the annual meeting starts with your condominium documents. Generally, the Bylaws of a community association will spell out when the meeting must be held, the purpose of the meeting, and how many Board members will be elected at that meeting. Quorum requirements must also be met, so you must make sure that there are sufficient people present — in person or by proxy — in order to conduct your annual meeting.
Proxies are an important aspect of any community association. Some condominium Bylaws restrict the number of proxies that any one unit owner can hold, although generally the property manager will have the right to use an unlimited number of proxies, so that a quorum can be obtained. But note: the property manager should not be allowed to vote on any issues; that is reserved for owners.
At the end of your Declaration, there will be a list of percentage interests. Generally, in each condominium association, every unit owner has a percentage interest in the entire condominium association. The percentage interest should equal 100. Contrary to popular belief, voting in a condominium association is usuallly by percentage interest, and not units. Thus, if unit owner “A” has a percentage interest of .35 and unit owner “B” has a percentage interest of .41, you must have a calculator present at the meeting so as to carefully compute the votes. There are some associations where it is “one unit, one vote”.
- Roll call;
- Proof of notice of meeting;
- Reading of minutes of proceeding meeting;
- Nomination and election of officers;
- Unfinished business; and
- New business.
The meeting should be conducted formally, but you should keep in mind that this is perhaps the only time during the year unit owners get to participate in the decision making of their association. Thus, do not try to stifle debate, although obviously if someone gets out of hand — or becomes unruly — the President or the Sergeant at Arms can rule that person out of order. It is recommended that at the beginning of the meeting, the President appoint one person to be the Sergeant at Arms, and that same person can also be appointed as parliamentarian. You should obtain a copy of the current issue of Roberts Rules of Order, and that should be the guidelines under which the meeting will proceed. However, most of us do not fully understand Roberts Rules of Order, and you want to make sure that those rules are not used to thwart the ability of the members to speak, or the ability of the association to get business done.
Indeed, in one annual meeting that I recently attended, the membership voted to temporarily abandon reliance on Roberts Rules of Order.
I also recommend the annual meeting be used as a forum to give helpful information to the unit owners. For example, your lawyer, your insurance agent, a fire marshal, or even a local politician could be invited to address the group on issues of concern to the entire community.
You may also want to be a little creative — especially if you believe you may have problems obtaining a quorum — and have a small social event scheduled immediately after the conclusion of the annual meeting. Some associations have raffles, whereby door prizes or other awards are given to one of the unit owners present at the meeting through a lottery arrangement.
Indeed, one community association Board became so frustrated with the lack of attendance at the annual meeting, that they proposed to pay themselves a large salary for serving on the Board of Directors, and announced the vote would be taken at the annual meeting. Needless to say, this drew a large crowd who properly voted that proposal down. However, it did serve the desired effect of having more people show up at the meeting.
Minutes of the meeting should be kept, but as the name implies, minutes should be short; they are not hours or days. The Secretary to the condominium should only record some basic information including:
- The date, time and place of the meeting;
- The number and percentage votes of those attending, including a statement as to whether a quorum was obtained;
- The number of positions to be elected, and who ultimately was elected to serve on the Board of Directors; and
- A report on any motions made, and the votes on those motions.
To the extent possible, minutes should be no more than 2 or 3 pages in length.
Finally, you must begin to address the very important question as to how you nominate prospective Board members. Can anyone volunteer at the annual meeting to serve on the Board of Directors? This is one approach, but generally is not practicable, since proxies may not reflect that individual’s participation. I strongly recommend the Board create a nomination committee, and have the nominations be closed at least a week or two before the annual meeting. The nominating committee’s function should merely be to make sure the person wants to serve, and that he or she is eligible. For example, many Bylaws place limitations on who may serve, such as being current in association dues, and owning a unit in the association. The nominating committee should have no authority to screen an individual who wants to serve on the Board for any other reason. That is a function of the vote, and a function of democracy.
The annual meeting must not be taken lightly. It is perhaps the most important function that any condominium association undertakes, and should be given careful planning. The fact that you are starting now for a scheduled August meeting makes a lot of sense. You can also contact the Community Associations Institute (703-750-3644 or caionline.org for additional guidance and information.