For those who own property in homeowners’ associations, it is important to understand the different types of association meetings that take place throughout the year. It is especially important that board members not only understand the different types of meetings but the rules surrounding who can and should attend these meetings, how to properly and efficiently run them and what types of business is to be discussed at each meeting. Though it may sound simple, having a clear understanding of the differences between annual meetings, special meetings, and regular membership meetings will allow board members to be better prepared to serve their associations.
Annual Membership Meetings
In both North and South Carolina, most homeowners’ associations are considered nonprofit corporations and therefore are subject to their state’s nonprofit acts. Because of this nonprofit corporation designation, they are required to hold annual meetings. The business typically transacted at annual meetings is the election of board members and the approval or ratification of annual budgets. It is important to note that the annual budget doesn't have to be ratified at the annual meeting, but the majority of associations choose to do it at this time for the sake of efficiency.
One of the most important things to keep in mind for the annual meeting is that it has to be properly noticed, meaning that you must let the membership know what items are going to be voted on at this meeting ahead of time in the annual meeting package.
Though annual meetings can take place at any time during the calendar year unless the association's bylaws specifically dictate otherwise, the vast majority of them occur during the last quarter of the calendar year and that is something CAMS recommends. This is because it allows time to get billing out prior to the beginning of the new year once the budget is ratified or approved and it also allows for new board members to get in place prior to the holidays and the new year. Really anytime from September to November and even early December is good for an annual meeting but waiting too late into December can cause billing to get overly complicated. This is because if budgets aren't ratified or approved in time and your assessments are billed monthly or quarterly, you may have to rely on the previous year's budget for the first billing period even though assessments might be increasing.
Special Membership Meetings
Special meetings are held for just that - special circumstances that need to be voted on may arise outside of a regular meeting schedule. These can be things like amending documents, approving special assessments, if a common area needs to be used for collateral for a loan, removal of one or more board members, things like that.
Though governing documents will address when and how special meetings should be conducted and the board of directors typically calls for special meetings, there are instances when the membership of an association can force a special meeting if needed. In NC, if the members of an association have an issue they feel isn't being addressed by the board or they feel board members need to be removed and they want to be the ones to call a special meeting versus the board calling it, they can have a petition signed by 10% of the property owners. The petition must state the purpose in which the meeting is being called. A special meeting called by the members can only be on matters that the members have the ability to vote on. It cannot be for matters on which the board has the authority and responsibility to make decisions. Once they've gathered this petition, they then file it with the association secretary and the meeting for whatever purposes stated in the petition must be held.
Board of Director Meetings
Though some associations, especially large-scale communities, may meet monthly or every other month, the majority of associations meet quarterly. In these meetings, boards go over prior meeting minutes, financial reports, vendor bids and review and approve contracts. In NC, these meetings are required to be open to members at regular intervals though the law is a bit murky here as it doesn't define what regular intervals may be. CAMS recommends that boards conduct meetings quarterly and that prior to the beginning of each meeting, there be a time allotted for owners to comment and ask questions. Once this is completed, the actual meeting begins - owners can stay if they choose but they cannot interact with the board as that can lead to very long, inefficient meetings. However, in such instances where legal issues surrounding employees, liens, foreclosures and things like that come up, boards should always go into executive session which means that everyone must leave. This not to hide things but rather protect the privacy of association members and discuss sensitive matters.
Community managers play a large role at board meetings and in fact often run these meetings because they're familiar with parliamentary procedure as well as the reports, proposals, bids, compliance issues, etc. being discussed. Some boards do like to run their own meetings and in those instances the community manager plays more of an assisting role in that they help send out notices, help ensure quorums are established, help set up the room, things like that. It really just varies by board and what they're looking for, but an experienced community manager can run an extremely efficient meeting.
Some associations, especially larger ones, have lots of committees which will hold their own meetings. Say you have a landscaping committee, they might meet once a month to go over their particular business, what they'd like to plant and discuss projects they're working on. If an association has committees, they should have charters that lay out the charge and authority of those committees, the frequency at which those committees should meet and how they should report back to the board. It is important to note that committees don't have the authority to make decisions unless the board specifically gives them that authority. Committees may do a lot of research and vetting in their area of expertise - if we're using the landscaping example again, they might solicit proposals to find a new landscaper and submit the top proposals back to the board for approval.
One of the keys to any successfully run association is always going to be transparency. Keeping members informed about what is going on in their associations while at the same time maintaining efficiency will always lend to a more positive environment in any community association meeting.
Mike Stonestreet is a 30-year veteran of the professional HOA management industry who has achieved one of the highest education-based designations in the field, that of Professional Community Association Manager (PCAM). Community Association Management Services (CAMS) has been a leading association management company since its inception in 1991. CAMS is a trusted provider of management services, dedicated to holding themselves to a higher standard of service to the community associations they serve throughout North Carolina and South Carolina. To find out how CAMS can benefit your community or visit www.CAMSmgt.com.
Christina Haley O'Neal - Jul 31, 2020
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