Mountain Law: How HOAs outght to function
Most homeowners associations (HOAs) are nonprofit corporations governed by an elected board. This article discusses a topic that can sometimes be confusing for board members (and owners): What are the ways that the board can decide matters for the HOA, and what notices must first be given?
The first option is that HOA boards can take action by vote at a regular or special meeting. Under Colorado law, regular meetings may generally be held without notice to the board members of the date, time, place or purpose of the meeting, while special meetings require at least two days’ notice to the board members of the date, time and place of the meeting (but generally not the purpose). Notices to the board members may be given personally, by mail or through an electronic means. Notwithstanding the above notice requirements, board members can, and often do, waive formal notice of the meeting either in writing or by participating in the meeting.
Where “available,” HOAs must also send notices of all board meetings by email to any owners who so request. In the case of special meetings, the email notice must be sent to requesting owners at least twenty-four hours before the meeting. The law provides no guidance concerning when email is considered to be available.
In addition to the notice requirements, Colorado law requires HOAs to make the agendas for board meetings “reasonably available” in advance for examination by all owners or their representatives. If there is no formal agenda, then HOAs must make the general purpose and subject of the meeting available instead. HOAs are required to give the owners annual notice of the method by which agendas and other information will be made available, and they may not change the method except upon 30 days prior notice. A good practice is for HOAs to include the notice as part of the annual meeting notice.
Action without meeting
The alternative to holding formal meetings is that HOA boards may take action without meeting. This generally involves voting by email. Action taken without meeting has the same effect as action at a formal meeting.
The proper way of taking action without meeting is for one of the board members (or the manager or attorney) to send the board members an email notice stating (1) the proposed action to be taken; (2) the time by which the board members must respond; and (3) that failure to respond by the time indicated will have the effect of a non-responsive board member abstaining and consenting to taking action without meeting. The proposed action is then deemed taken if, at the end of the time stated in the notice, none of the board members have demanded a meeting and the number of affirmative votes for the proposed action equals or exceeds the minimum number of votes that would be necessary to take such action at a meeting at which all of the board members were present and voted. Even after voting, board members are allowed to change their minds concerning any course of action before the deadline stated in the notice.
Unlike with formal meetings, the owners are not entitled to prior notice of actions taken without meeting. However, all writings relating to action taken without meeting, including all email correspondence between the board members, must be maintained as HOA records and made available to the owners after the fact upon request.
In sum, board members, owners and managers should familiarize themselves with the proper methods by which HOA boards are allowed to take action with and without meeting. Owners, particularly, should understand the extent to which they are entitled to notice of certain actions.
Noah Klug is owner of The Klug Law Firm, LLC, in Summit County, Colorado. He may be reached at 970-468-4953 or Noah@TheKlugLawFirm.com.
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