Proper Formation and Procedures for Condominium and HOA Committees - Weiss Attorneys at Law

minutes on bindersFrequently, when something novel is proposed to a condominium or subdivision association, or when an issue seems to dog an association, the board looks to approve a committee to study the issue, suggest options and report back to the board at some point in time. We’ve all served on boards and committees at some time, and committees can, and generally do, provide a valuable adjunct to the ability of the board of directors (or board of managers in a condominium association) to timely address issues confronting the community. But far too often, the committee is formed in haste or without consultation with the association’s attorney, and in that haste or oversight, errors can be made.

Unlike condominium associations, homeowner associations do not have any laws in Missouri governing their formation, governance, procedures or authority, and thus the authority or procedures of committees are not addressed. But even condominium associations with their extensive framework of governance and rights are silent regarding the scope, authority or procedures of committees. Only if the HOA or condominium association is a Missouri nonprofit corporation are there any regulations in place.

As a Missouri nonprofit corporation, an HOA or condominium association has the power to create committees unless either the articles of incorporation or the association’s by-laws prohibit or limit doing so. The board of directors/managers must approve the creation of a committee, and the approval must be by the greater of a majority of all directors then in office when the action is taken or the number of directors required to take action or required under the association’s articles of incorporation or by-laws.

Just the same as with a board of directors/managers, committees are governed by formalities regarding notices of meetings, quorums, powers to act and recordkeeping.

Unless the articles of incorporation or by-laws provide otherwise, regular meetings may be held without notice, while special meetings require at least two (2) days’ notice to each committee member of the date, time, place and purpose of the meeting. Special meetings may be called by the chairperson or not less than twenty percent (20%) of the committee members.

Occasionally, disputes will arise over whether notice should have been given of a meeting, the detractors characterizing the meeting as “special,” while the proponents of holding the meeting view the meeting as a “regular” meeting. Generally, a “regular” meeting is one that is established by the by-laws (especially in the case of standing committees) or resolution (in the case of creating an ad hoc committee) as to time and place or agreement of the committee itself to meet at regular intervals.

In the case of a committee, the resolution approving the creation of an ad hoc committee, or in the case of a standing committee generally the by-laws, may establish the dates on which such committee is to meet, e.g., “the second Monday before each regularly scheduled meeting of the board.”

The distinction between “regular” and “special” meetings is more important than just legal linguistics. Unless the articles of incorporation or by-laws provide otherwise, a regular meeting requires no notice of the date, time, place or agenda. In the case of a special meeting, each committee member must be provided notice of the date, time, place and agenda. Furthermore, the notice must be given not less than two (2) days prior to such “special meeting” or if the articles of incorporation, by-laws or resolution creating the committee provides for greater notice, such provision trumps the statute. (Note that under Chapter 1 of the revised Statutes of Missouri, any act that is to be performed within a statutorily defined time period is to be computed by excluding the first day and including the last, except if the last day is a Sunday, in which case the day for performance is to be the following Monday.)

Notice may be given either orally or in writing. Oral notice may be in person or via telephone and is effective when communicated. There are no Missouri decisions determining whether oral notice via voice message is in compliance with the Missouri statute, and thus the likely better course, to avoid becoming the test case on the manner of giving notice, is to also comply with the written notice requirements.

Written Notice must be in a comprehensible form and is effective at the earliest of:

  1. When received;
  2. Five (5) days after deposit in the U.S. mail, as evidenced by the postmark, with first-class postage prepaid and correctly addressed;
  3. On the date indicated on a return receipt card if the Notice is sent via certified or registered mail, and the receipt is signed by or on behalf of the addressee; or
  4. Thirty (30) days after deposit in the U.S. mail, as evidenced by the postmark, if correctly addressed and sent by other than first-class, certified or registered mail.

Thus, merely placing an envelope in the mail deposit box, stamped and correctly addressed, will not permit holding a Special Meeting two (2) days hence. Adequate time must be incorporated into the notice period so as to comply with these statutory mandates.

Records are required to be preserved as “permanent records” of all meetings of the organization’s members, its directors/managers and committees of the board. These records are to include both meeting minutes as well as written consents in lieu of a meeting. It is also recommended that notices of meetings and either an affidavit or some other less formal record memorializing the manner of serving notice be preserved, as challenges to actions purportedly taken in compliance with statutory and governing document procedures can be derailed for failure to properly convene a meeting.

While all these details can seem to be overwhelming, using this guidance as a checklist can make the task a little less daunting. And after a while, you will be able to speak with authority. If you get stuck or an issue does arise with your association, contact Weiss Attorneys at Law, P.C. at law@weisslawstl.com.

David Weiss Business AttorneyDavid P. Weiss is the Managing Officer of Weiss Attorneys at Law (www.weisslawstl.com). David counsels business owners, homeowner associations, condominium associations, nonprofits and individuals in a variety of legal matters central to business and ownership issues, including corporate governance, owner rights, contracts, employment, security interests, succession planning, real estate, tax and entity formation matters.  David also represents clients in business litigation involving business disputes, shareholder matters, and community associations. He can be reached at 314-588-9500 or dweiss@weisslawstl.com.

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