Northwest Condo & HOA Law Blog : Washington & Oregon Construction Defect Lawyer & Attorney : Barker Martin Law Firm : Homeowner Associations, Condos : Seattle, Portland

The following is part two of a two-part article recently published in the January 2012 edition of WSCAI Washington Communities'Journal:

Recruit Prospective Board Members Early

Many community associations have difficulty filling officer and director positions. There are multiple reasons for this apathy; however, as with many volunteer positions, serving as a community association officer or director can be a highly rewarding experience.

Generally, voting for board positions occurs at the annual meeting. Boards who simply ask for nominations at the meeting do a disservice to themselves and their communities. Recruitment of board members is one of the common traits of successful common interest communities. A board member should begin thinking about his or her replacement almost from the time they first step onto the board. Identification of charismatic or effective leaders and managers within a community may take up to a year, or more. Persuading, convincing or even cajoling a neighbor to run as a board member may take even longer!

Nominations of directors should be requested well in advance of the annual meeting. A brief bio or “platform statement” of each candidate may be included with the meeting notice and agenda. Voting for director positions must comply with the provisions of the association’s governing documents, most likely found in the bylaws. Most associations allow each candidate a few minutes to speak to the membership prior to the vote. Once the directors are voted in and assume their positions, often their first order of business is to agree upon officer positions. This action ordinarily occurs immediately following the annual meeting.

Overcoming Potential Pitfalls

Though reaching quorum is often stated by associations as a hurdle in achieving a successful annual meeting, following the steps described above in planning and running an effective combined business meeting and social event should result in higher attendance and an ability to reach quorum without difficulty.

Under the Washington Condominium Act (“WCA”), unless the bylaws specify a larger percentage, a quorum is present throughout any meeting of the association if the owners of units to which 25% of the votes of the association are allocated are present in person or by proxy at the beginning of the meeting.[1] Under the Washington Homeowner Association Act (“HOA Act”), unless “the governing documents” specify a different percentage, a quorum is present if the owners to which 34% of the votes of the association are allocated are present in person or by proxy at the beginning of the meeting.[2]

Proxies also allow associations to reach quorum even if many homeowners do not personally attend the meeting. Under the WCA, votes allocated to a unit may be cast pursuant to a proxy duly executed by a unit owner.[3] A unit owner may not revoke a proxy except by actual notice of revocation to the person presiding over a meeting of the association. A proxy is void if it is not dated or purports to be revocable without notice. Unless stated otherwise in the proxy, a proxy terminates eleven months after its date of issuance.[4] Though the HOA Act is silent regarding proxies, general corporations law essentially tracks the WCA on this issue.

Some associations have experienced legal challenges to business conducted at an annual meeting simply because they failed to follow procedural hurdles. Common interest communities in Washington must follow strict notice requirements to ensure a legally binding annual meeting. Under the HOA Act, not less than 14 nor more than 60 days in advance of any meeting, the secretary or other officers specified in the bylaws shall cause notice to be hand-delivered or sent prepaid by first-class United States mail to the mailing address of each owner or to any other mailing address designated in writing by the owner.[5] The notice of any meeting shall state the time and place of the meeting and the business to be placed on the agenda by the board of directors for a vote by the owners.[6] The rules are the same for condominiums in Washington under the WCA, except the minimum notice period is shortened from 14 to not less than 10 days.[7]

Success!

A community association who conducts comprehensive event planning, combines the business meeting with a social activity, includes community members and takes into account renters and families with children, can transform dread into success--turning the annual meeting event into an opportunity for the board and association to shine.

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We've been writing about several Bills on this Blog lately because there is a lot of prospective legislation (both locally and nationally) affecting homeowner associations and individual homeowners.  The level of legislative activity in this area appears to have increased probably in part as fallout from the economic crisis. 

As an update, H.R. 1106 "Helping Families Save Their Homes Act of 2009" remains stalled in the U.S. Senate, with no scheduled date for a vote (click here to keep track of the Bill).  In Washington, ESSB 1393, "Addressing residential real property construction improvements through consumer education, warranty protections, contractor registration requirements, and worker certification standards," is similarly stalled in the state Senate.  An earlier version of the Bill passed in the House, but is undergoing major rewrites in the Senate.  One of the latest versions, Striker 1393-S2.E AMS WM S2889.2, can be found here.  I believe the Striker version is wholly impractical and inefficient.  For example, the Striker establishes  a 7-person "Home Construction Board" to resolve construction disputes.  The Board would be comprised of four construction professionals of varying experience, a governmental building inspector and two members "of the general public."  The board members would be appointed by the governor and meet at least four times per year.  Doesn't sound to me like an effective or efficient way to resolve hundreds, if not thousands, of construction disputes filed in our state each year.  To keep track of ESSB 1393, click here.

The Oregon legislature is also debating several Bills that affect homeowners and homeowner associations, including SB 811 and SB 963.  SB 811 modifies provisions relating to enforcement of liens for association assessments in planned communities and condominiums, including establishment of a "super lien priority" for associations.  SB 963 includes several technical changes regarding governance for planned communities and condominiums in Oregon.  For specific information on the Bills and to track their progress, click here.  

Several Barker Martin, P.S. attorneys remain highly active in the Washington and Oregon legislative process, including serving on legislative committees for homeowner association industry groups.  On occasion, we also are asked to review and help draft prospective legislation.  Keep checking this Blog to obtain the latest legislative developments affecting homeowners.
   

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I believe the vast majority of HOA and condominium board members utilize email in some capacity in their role as board members.  Remember, however, that any formal board action should not be conducted via email, as board action must occur during a regular board meeting (for more information on this topic, see my 2/24/08 blog posting "Email and HOA Board Action").

I have found less than 10 percent of board members utilize discrete email accounts, such as riverplazapres@yahoo.com or gardensquareHOAtreasurer@gmail.com.  I strongly suggest that HOA and condominium board members set up these discrete email accounts (use whatever email server you desire; there are many free services available: yahoo, gmail, msn, etc.).  Using these separate email accounts is beneficial for the following reasons:

   1.  In the event of litigation involving the HOA, the board member will not have to undergo the embarrassment and adverse consequences of having to explain to his or her boss why the company was served with a subpoena regarding a non-work related lawsuit and has to allow unfettered access to its email servers.

   2.  Setting up discrete email accounts helps a board member manage his or her time more effectively.  Rather than feeling obligated to immediately respond to each and every HOA email that comes in during the work day via the work email address, the board member can set up a defined time of the day, evening or week to respond to HOA-related email.  Such action could also decrease the amount of time a board member spends on HOA business during the work day using the employer's email.

   3.  By using a discrete HOA email account, a board member can more easily track time spent on HOA duties.

   4.  Board member turnover is streamlined, simplified and much more comprehensive.  The outgoing board secretary (or president, vice president, treasurer, etc.) merely gives the user name and password to the incoming board member.  All historic emails are already consolidated in a single email account.  The new board member simply changes the password.

   5.  Setting up a discrete email account with a generalized email address allows for transparent transfer from one board member to another.  Boards do not have to update email addresses with homeowners, association managers, vendors, bankers, etc., each time a board member leaves and is replaced.

   6.  The email accounts are accessible anywhere in the world 24/7--assuming one has Internet access.

   7.  Setting up these accounts only takes a few minutes.  Also, these accounts are free. 

I cannot think of a single downside for an HOA or condominium board to set up discrete email accounts.  As shown above, there are multiple advantages of using these accounts. 

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