The Limited Effect of a Board's Failure to Comply with Meeting Requirements

As previously discussed on this blog, the state law that governs common interest associations in Washington state requires those associations to comply with numerous requirements relating to meetings. However, it also limits the consequences associated with a board's failure to comply with those requirements. The law first states that actions of a board that do not comply with meeting-related requirements are valid unless set aside by a court. It goes on to state that an action seeking relief for a board's failure to comply with those requirements may not be brought more than 90 days after the minutes of the meeting at which the action was taken are approved or the record of that action is distributed to unit owners, whichever is later.

New WUCIOA Meeting Requirements for Community Associations on January 1

The meeting requirements contained in WUCIOA (RCW 64.90.445) will apply to all community associations in Washington state on January 1. I have included the full text of the relevant statute below and highlighted certain sections of particular importance. If your association has questions about any of the provisions below, then it should consider seeking guidance from an attorney with experience in this area. 

(1) The following requirements apply to unit owner meetings:

(a) A meeting of the association must be held at least once each year. Failure to hold an annual meeting does not cause a forfeiture or give cause for dissolution of the association and does not affect otherwise valid association acts.

(b)(i) An association must hold a special meeting of unit owners to address any matter affecting the common interest community or the association if its president, a majority of the board, or unit owners having at least 20 percent, or any lower percentage specified in the organizational documents, of the votes in the association request that the secretary call the meeting.

(ii) If the association does not provide notice to unit owners of a special meeting within 30 days after the requisite number or percentage of unit owners request the secretary to do so, the requesting members may directly provide notice to all the unit owners of the meeting. The unit owners may discuss at a special meeting a matter not described in the notice under (c) of this subsection but may not take action on the matter without the consent of all unit owners.

(c) An association must provide notice to unit owners of the time, date, and place of each annual and special unit owners meeting not less than 14 days and not more than 50 days before the meeting date. Notice may be by any means described in RCW 64.90.515. The notice of any meeting must state the time, date, and place of the meeting and the items on the agenda, including:

(i) The text of any proposed amendment to the declaration or organizational documents; and

(ii) Any proposal to remove a board member or, if the declaration or organizational documents provide for the election of officers by the unit owners, any proposal to remove an officer.

(d) Unit owners must be given a reasonable opportunity at any meeting to comment regarding any matter affecting the common interest community or the association.

(e) A meeting of unit owners is not required to be held at a physical location if the meeting is conducted in accordance with subsection (3) of this section.

(f) In the notice for a meeting held at a physical location, the board may notify all unit owners that they may participate remotely in the meeting by a means of communication described in subsection (3) of this section.

(2) The following requirements apply to meetings of the board and committees authorized to act for the board:

(a) Meetings must be open to the unit owners except during executive sessions, but the board may expel or prohibit attendance by any person who, after warning by the chair of the meeting, disrupts the meeting. The board and those committees may hold an executive session only during a regular or special meeting of the board or a committee. A final vote or action may not be taken during an executive session.

(b) An executive session may be held only to:

(i) Consult with the association's attorney concerning legal matters;

(ii) Discuss existing or potential litigation or mediation, arbitration, or administrative proceedings;

(iii) Discuss labor or personnel matters;

(iv) Discuss contracts, leases, and other commercial transactions to purchase or provide goods or services currently being negotiated, including the review of bids or proposals, if premature general knowledge of those matters would place the association at a disadvantage; or

(v) Prevent public knowledge of the matter to be discussed if the board or committee determines that public knowledge would violate the privacy of any person.

(c) For purposes of this subsection, a gathering of members of the board or committees at which the board or committee members do not conduct association business is not a meeting of the board or committee. Board members and committee members may not use incidental or social gatherings to evade the open meeting requirements of this subsection.

(d) During the period of declarant control, the board must meet at least four times a year. At least one of those meetings must be held at the common interest community or at a place convenient to the community. After the transition meeting, unless the organizational documents provide otherwise, and except as otherwise provided in subsection (3) of this section, all board meetings must be at the common interest community or at a place convenient to the common interest community.

(e) At each board meeting, the board must provide a reasonable opportunity for unit owners to comment regarding matters affecting the common interest community and the association. The board must provide at least 15 minutes at the beginning of each meeting for unit owners to comment about agenda items before the board votes. The board may place reasonable time restrictions of not less than 90 seconds per owner per unit, except that the time per owner per unit may be reduced and allocated equally if more than 10 unit owners wish to comment.

(f) Unless the meeting is included in a schedule given to the unit owners, the secretary or other officer specified in the organizational documents must provide notice of each board meeting to each board member and to the unit owners. The notice must be given at least 14 days before the meeting and must state the time, date, place, and agenda of the meeting. Notwithstanding the foregoing, notice of a meeting to address an event or condition that could not have been reasonably foreseen and for which it is impracticable to provide notice as otherwise required by this chapter must be given at least seven days before the meeting and by means of electronic communication to unit owners whose electronic address or phone number is known to the association.

(g) If any materials are distributed to the board before the meeting, the board must make copies of those materials reasonably available to the unit owners, except that the board need not make available copies of unapproved minutes or materials that are to be considered in executive session.

(h) Notwithstanding the governing documents, fewer than all board members may participate in a regular or special meeting by or conduct a meeting through the use of any means of communication by which all board members participating can hear each other during the meeting. A board member participating in a meeting by these means is deemed to be present in person at the meeting.

(i) Prior to the transition meeting, without a meeting, the board may act by unanimous consent as documented in a record by all its members. Actions taken by unanimous consent must be kept as a record of the association with the meeting minutes. After the transition meeting, the board may act by unanimous consent only to undertake ministerial actions, actions subject to ratification by the unit owners, or to implement actions previously taken at a meeting of the board.

(j) A board member who is present at a board meeting at which any action is taken is presumed to have assented to the action taken unless the board member's dissent or abstention to such action is lodged with the person acting as the secretary of the meeting before adjournment of the meeting or provided in a record to the secretary of the association immediately after adjournment of the meeting. The right to dissent or abstain does not apply to a board member who voted in favor of such action at the meeting.

(k) A board member may not vote by proxy or absentee ballot.

(l) Even if an action by the board is not in compliance with this section, it is valid unless set aside by a court. An action seeking relief for failure of the board to comply with this section may not be brought more than 90 days after the minutes of the board of the meeting at which the action was taken are approved or the record of that action is distributed to unit owners, whichever is later.

(3) Notwithstanding the governing documents, any meeting may be held by telephonic, video, or other conferencing process if:

(a) The meeting notice states the conferencing process to be used and provides information explaining how to participate in the conference;

(b) The process provides all participants the opportunity to hear or perceive the discussion and to comment as provided in subsection (2)(e) of this section;

(c) Any votes of the board members are conducted by roll call or other verbal vote; and

(d) Any person entitled to participate in the meeting is given the option of participating by telephone.

(4) Minutes of all unit owner meetings and board meetings, excluding executive sessions, must be maintained in a record. The decision on each matter voted upon at a board meeting or unit owner meeting must be recorded in the minutes.

Conducting a Vote Without a Meeting

Community association boards often ask me whether they may conduct a vote without a meeting. Washington state law does permit this, but only under the conditions stated below. If your board has questions or concerns about how to interpret and apply this law, then it should consider contacting my office to obtain guidance. The association's governing documents may need to be amended to conduct such a vote in the manner that is desired.   

Unless prohibited or limited by the declaration or organizational documents, an association may conduct a vote without a meeting. In that event, the following requirements apply:

(a) The association must notify the unit owners that the vote will be taken by ballot.

(b) The notice must state:

(i) The time and date by which a ballot must be delivered to the association to be counted, which may not be fewer than fourteen days after the date of the notice, and which deadline may be extended in accordance with (g) of this subsection;

(ii) The percent of votes necessary to meet the quorum requirements;

(iii) The percent of votes necessary to approve each matter other than election of board members; and

(iv) The time, date, and manner by which unit owners wishing to deliver information to all unit owners regarding the subject of the vote may do so.

(c) The association must deliver a ballot to every unit owner with the notice.

(d) The ballot must set forth each proposed action and provide an opportunity to vote for or against the action.

(e) A ballot cast pursuant to this section may be revoked only by actual notice to the association of revocation. The death or disability of a unit owner does not revoke a ballot unless the association has actual notice of the death or disability prior to the date set forth in (b)(i) of this subsection.

(f) Approval by ballot pursuant to this subsection is valid only if the number of votes cast by ballot equals or exceeds the quorum required to be present at a meeting authorizing the action.

(g) If the association does not receive a sufficient number of votes to constitute a quorum or to approve the proposal by the date and time established for return of ballots, the board of directors may extend the deadline for a reasonable period not to exceed eleven months upon further notice to all members in accordance with (b) of this subsection. In that event, all votes previously cast on the proposal must be counted unless subsequently revoked as provided in this section.

(h) A ballot or revocation is not effective until received by the association.

(i) The association must give notice to unit owners of any action taken pursuant to this subsection within a reasonable time after the action is taken.

(j) When an action is taken pursuant to this subsection, a record of the action, including the ballots or a report of the persons appointed to tabulate such ballots, must be kept with the minutes of meetings of the association.

Two New Laws Affect Washington Community Associations

Almost every session of the Washington Legislature produces new laws pertaining to Washington condominium and homeowners associations.  This legislative session resulted in the passage of two such laws - one governing speed limit enforcement and one governing meeting notices.

Washington homeowners associations have had the power to establish and enforce speeding rules on private roads within their communities since 2003.  There are four conditions associated with the exercise of that power: 

1. A majority of the association's board of directors must vote to authorize the issuance of speeding infractions and to declare a speed limit not lower than twenty miles per hour;

  

2. A written agreement regarding speeding enforcement must be signed by the association president and the chief law enforcement official of the city or county;

3. The association must provide written notice to all owners describing the new authority to issue speeding infractions; and

4. Signs must be posted declaring the speed limit at all vehicle entrances to the community.

The first new law grants Washington condominium associations the power to establish and enforce speeding rules on private roads subject to those conditions as well.

The Washington Homeowners' Associations Act (RCW 64.38) requires those associations to follow certain procedures when notifying owners of association meetings.  Electronic notice was not mentioned in the original Act.  The second new law amends the Act to permit Washington homeowners associations to notify owners of association meetings using electronic transmissions.  Owners must first opt in to electronic notice by delivering a written notice to the Association requesting to receive notices by electronic transmission.  

The second new law does not affect Washington condominium associations.  The laws specifically governing those associations still lack any reference to electronic notice. 

Both new laws take effect on July 28, 2013.

The Nuts and Bolts of Association Meetings - Notices, Quorums, and Proxies

The Washington Condominium Act states that condominium associations must hold at least one meeting a year. The Act requires meeting notices to be hand-delivered or mailed to the owners at least 10 days before the meeting and no more than 60 days before the meeting. The notice must describe the issues that are before the owners for a vote, including the general nature of proposed amendments to the declaration or bylaws, changes in a previously approved budget that alter assessment obligations, and proposals to remove a director or officer.

Unless the governing documents specify a higher percentage, a quorum is present in a condominium covered by the Washington Condominium Act if 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. This is the minimum acceptable quorum. A proxy is void if it is not dated or if it claims to be revocable without notice. Unless the proxy states otherwise, it terminates 11 months after it was executed.

The Washington Homeowners’ Associations Act largely includes the same meeting and notice requirements in the first paragraph above, but it requires a minimum of 14 days notice of association meetings to be given to owners. Unless the governing documents specify a different percentage, a quorum is present at a homeowners association meeting if owners to which 34% of the votes in the association are allocated are present in person or by proxy at the beginning of the meeting. This is the default quorum, and it can be adjusted in either direction by the governing documents. There is no provision in this law about proxies.

These two laws are not the only source of information about association meetings. The association’s declaration and bylaws must also be consulted. The quorum amounts established by governing documents are often higher than the percentages stated in the laws. It is fairly common for bylaws to elaborate on the content of valid meeting notices and proxies as well. Following the requirements relating to notices, quorums, and proxies will help to deflect any challenges to actions taken at association meetings.

Using Board Meeting Minutes to Communicate with Owners

Condominium and homeowners association boards should strive to communicate effectively and often with owners. One of the main causes of discontent in such associations is boards that do not tell the owners what they are doing. Distribution of board meeting minutes is an excellent way to keep owners informed.

Board meeting minutes should reflect the meeting date, the persons that attended the meeting, the status of the previous meeting’s minutes, the general nature of each topic discussed at the meeting, and actions taken by the board. It is not necessary to record the comments or views of individual board members. Meeting minutes should be signed by the person that recorded them.

Many owners want to know about the decisions the board is making on their behalf, and sending them a regular stream of information about board activities reduces the potential for unfounded accusations and conflict. Making board meeting minutes widely available can also help boards better understand the wishes of their communities.