What To Do When Boards and Property Managers Abuse A Law Allowing Decisions By Consent Without A Meeting
It is CCOC’s hope that this article will answer questions you may have regarding the ability of a board of directors to vote without conducting a board meeting .
Effective October 1, 2015, Section 47-250 (b)(9) of the Common Interest Ownership Act was amended to allow executive boards to act by not less than two-thirds consent of all executive board members. Prior law required unanimous consent if the board did not meet.
The intent of this change was to assist executive board members to carry out their duties and subsequently meet the burden of time sensitive issues that require immediate action by an executive board benefiting either the common interest community or a specific unit owner.
Reasons offered in support of this change included:
- Some board members never vote by email, even if they are away on vacation or an even longer absence, and thus the board could not get unanimous consents until the board member returned.
- Calling special executive board meeting imposes undue costs to the association for copies and postage
- A special meeting may be outside of a management contract thereby incurring an additional cost for a manager’s time.
However, the law remains clear that the unanimous consent must be documented in a record authenticated by executive board members noting the consent or non-consent of each executive board member. The law continues to require that the board secretary promptly give notice to all unit owners of any action taken by consent .
While the intent of this change was to benefit the board as well as unit owners, unfortunately many unit owners are being harmed because some boards and property managers are not complying with the law’s requirements concerning documentation and notice to unit owners.
For example, in one condominium, unit owners were not notified of actions the board took without conducting a board meeting. Instead the property manager stated that a record of the vote was kept in the manager’s office. In order to learn about the board’s actions and to learn how board members voted, unit owners are required to request this record and pay for copies and administrative time. Instead of automatically getting notice of board actions the burden falls on the unit owner to request it and to pay for it, which is contrary the letter and spirit of the law.
Another problem with this new law is that some property managers and boards are interpreting this law as an excuse to decrease the numbers of board meetings they conduct during the year and thereby the need for their time and presence at a board meeting. When boards make decisions by consent instead of by vote at a meeting, unit owners are deprived of prior notice and an opportunity to object or provide information to the board that might affect the board’s decision. And when property managers and boards refused to comply with the law’s requirements for notifying unit owners what action the board took by consent and which board members consented and which did not, unit owners are deprived of knowing what’s going on in their common interest community and which board members were responsible.
As stated in a recent article, “the implementation of this new law was not an invitation for executive boards to avoid conducting meetings by acting outside of such meetings at all times and yet that is exactly what some boards and property managers are doing. This allows board members to in essence act in secret with no accountability and no opportunity for unit owners to object or provide valuable information to assist the board in making decisions in the best interest of all unit owners.
Property managers especially as licensed professionals should and must know better and should ensure the law is complied with and not ignored or circumvented by setting up expensive and unnecessary barriers for unit owner who simply want to be informed about what the board is considering doing and what the board has done and how individual board members have voted.
What can unit owners do to try to make sure property managers and boards are complying with the law?
First, Any communication with a property manager should be well documented. Telephone conversations cannot be used to document your query of suspected wrong-doing.
Second, unit owners should file a complaint with the Department of Consumer Protection (DCP)and provide information the department might need to handle the complaint including any relevant dates, the issue, and your communications with the property manager. Remember DCP has regulatory authority only over property managers and not over self managed common interest communities. This agency is extremely busy, but will investigate each complaint filed.
Third, send a copy of your complaint filed with DCP to your local legislators. As one unit owner cited in a letter sent to DCP, hiring an attorney would cost between $5,000 and $10,000. If your legislators do not know that the law is not working as it was intended, how can they be expected to fix it? Please let your legislator know every time a property manager or board is breaking the law.
CCOC is continuing to fight to get the legislature to amend the law to provide an inexpensive and expeditious forum, which could force boards and property managers to obey the law. Legislators need to be aware of the problems that plague unit owners in common interest communities. The best way for legislators to know of unit owners problems is to hear it directly from their own constituents.