Conducting HOA Meetings & Parliamentary Procedures

CONDUCTING HOA MEETINGS & PARLIAMENTARY PROCEDURES BEST PRACTICES FOR HOAs IT IS THE HOA BOARD’S DUTY TO: • Preserve the nature and character of the community • Provide services and amenities to residents • Protect property values • Meet the established expectations of owners

INTRODUCTION Accomplishing the business of your HOA requires some basic knowledge about meetings, HOA regulations, and laws governing California corporations. HOA board members are held to the highest legal standards with an expectation that directors will conduct the business of the HOA in a way that is fair, transparent, and in the best interest of the entire community.

Parliamentary procedures are established by the board to create a consistent, fair, and easily understood pathway for the board to discuss and take action on pending business issues. Parliamentary procedures also help residents (members) to follow the discussions and actions of the board. California law requires that boards adopt parliamentary procedures as a safeguard during membership meetings. It is a best practice to use parliamentary procedures to ensure board actions are clear, accurately recorded in the meeting minutes.

CONTENTS AUTHORITY TO TAKE ACTION............................................................. 3 FIDUCIARY DUTY TO TAKE ACTION..................................................... 3 PREPARING TO TAKE ACTION............................................................. 3 WHAT PARLIAMENTARY PROCEDURES DO WE USE? ......................... 3 SAMPLE PARLIAMENTARY PROCEDURES Motion-Making Process and Board Resolutions................................. 4 LEGAL DEFINITIONS FOR HOA MEETINGS.......................................... 5 BEFORE YOU MEET – PREPARATION FOR HOA MEETINGS ................ 5 PREPARING THE AGENDA AND BOARD PACKET.................................. 5 CONDUCTING MEETINGS & ORDER OF BUSINESS............................. 6 SAMPLE ORDER OF BUSINESS.......................................................... 6 SAMPLE PATH FOR ITEMS OF BUSINESS........................................... 7

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AUTHORITY TO TAKE ACTION

PREPARING TO TAKE ACTION

Governing Documents

ESTABLISHING PARLIAMENTARY PROCEDURES

The HOA’s governing documents give the board its authority to act on behalf of resident members. It is important for every board member to familiarize themselves with the association’s governing documents that typically include the Covenants, Conditions, and Restrictions (CC&Rs), Articles of Incorporation, Bylaws, and Rules & Regulations.

Before addressing the business of the HOA, the board must establish parliamentary procedures.

Parliamentary procedures are a set of rules for conducting business at board and membership meetings built on a foundation supported by the following pillars: 1. Parliamentary rules should provide a framework for the orderly conduct of meetings.

Davis-Stirling Act In California, HOAs also get authority to act from the Davis-Stirling Act that went into effect on January 1, 1986, and was reorganized and renumbered into Civil Code §§4000-6150 effective January 1, 2014. This includes the Open Meeting Act §§4900-4955.

2. Parliamentary rules should be clear. Simple rules lead to wider understanding and participation.

3. Parliamentary rules should be user friendly. Rules must be simple enough that board members feel they are able to participate in the process.

California Corporations Code

WHAT PARLIAMENTARY PROCEDURES DO WE USE?

Most HOAs are incorporated as nonprofit mutual benefit corporations. As such, board members of HOAs have authority to act on behalf of resident members under the California Corporations Code.

Most parliamentary procedures are based on Robert’s Rules of Order. However, there is no requirement that board meetings be conducted under any specific system of parliamentary procedure. According to “The A-B-C’s of Parliamentary Procedure,” any procedures can be adopted to fit the needs of any organization, unless the association’s own governing documents require otherwise.

Remember that the rules you use will only work if they are simple enough for everyone to understand.

FIDUCIARY DUTY TO TAKE ACTION HOA board members have fiduciary duties. Fiduciaries act for someone else’s benefit, while subordinating their personal interest to that of the other person or organization. It is the highest standard of duty implied by law. This fiduciary relationship is governed by the statutory standard that requires directors to exercise due care and undivided loyalty for the interests of the corporation.

When establishing parliamentary procedures for your HOA, it is important that you begin with reviewing your governing documents for any requirements. Typically, rules related to board actions can be found in the association’s bylaws.

However, there may be requirements in the Articles of Incorporation or the CC&Rs. After compiling a list of governing document requirements (if any), it is important to understand the current legal requirements found in various regulations, the DavisStirling Act, and the California Corporations Code.

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SAMPLE PARLIAMENTARY PROCEDURES Motion-Making Process and Board Resolutions To Do This:

You Say This:

May you interrupt speaker?

Do you need a second?

Is it debateable?

Can you amend it?

What vote is needed?

Can it be reconsidered?

Adjourn meeting

“I move to adjourn.”

No

Yes

No

No

Majority

No

Call an intermission

“I move to recess for...”

No

Yes

No

Yes

Majority

No

Complain about heat, noise, etc.

“I rise to a question of privilege.”

Yes

No

No

No

No Vote

No

Temporarily suspend consideration of an issue

“I move to lay the motion on the table.”

No

Yes

No

No

Majority

No

End debate and amendments

“I move the previous question.”

No

Yes

No

No

2/3

Yes

Postpone discussion for a certain time

“I move to postpone the discussion until...”

No

Yes

Yes

Yes

Majority

Yes

Give closer study of something

“I move to refer the matter to committee.”

No

Yes

Yes

Yes

Majority

Yes

Amend a motion

“I move to amend the motion by...”

No

Yes

Yes

Yes

Majority

Yes

Introduce business

“I move that...”

No

Yes

Yes

Yes

Majority

Yes

The motions listed above are in order of precedence ... below, there is no order Protest breach of rules or conduct

“I rise to a point of order.”

Yes

No

No

No

No Vote

No

Vote on a ruling of the chair

“I appeal from the chair’s decision.”

Yes

Yes

Yes

No

Majority

Yes

Suspend rules temporarily

“I move to suspend the rules so that...”

No

Yes

No

No

2/3

No

Avoid considering an improper matter

“I object to consideration of this motion.”

Yes

No

No

No

2/3

Yes

Verify a voice vote by having members stand

“I call for a division,” or “Division!”

Yes

No

No

No

No Vote

No

Request information

“Point of Information...”

Yes

No

No

No

No Vote

No

Take up a matter previously tabled

“I move to take from the table...”

No

Yes

No

No

Majority

No

Reconsider a hasty action

“I move to reconsider the vote on...”

Yes

Yes

Yes

No

Majority

No

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LEGAL DEFINITIONS FOR HOA MEETINGS

(2) If a nonemergency board meeting is held solely in executive session, the association shall give notice of the time and place of the meeting at least two days prior to the meeting.

Board Meetings Civil Code §4090

(3) If the association’s governing documents require a longer period of notice than is required by this section, the association shall comply with the period stated in its governing documents. For the purposes of this paragraph, a governing document provision does not apply to a notice of an emergency meeting or a meeting held solely in executive session unless it specifically states that it applies to those types of meetings.

(a) A congregation, at the same time and place, of a sufficient number of directors to establish a quorum of the board, to hear, discuss, or deliberate upon any item of business that is within the authority of the board.

Membership Meetings Civil Code §5000(a)

(c) Notice of a board meeting shall be given by general delivery pursuant to Section 4045. (d) Notice of a board meeting shall contain the agenda for the meeting.

(a) Meetings of the membership of the association shall be conducted in accordance with a recognized system of parliamentary procedure or any particular parliamentary procedure the association may adopt.

PREPARING THE AGENDA AND BOARD PACKET

(b) The board shall permit any member to speak at any meeting of the membership of the association. A reasonable time limit for all members to speak at a meeting of the association shall be established by the board.

Board meeting agendas must be posted along with the notice of any meeting. The agenda is typically prepared by the board Chair and the community association manager and constitutes the board’s agreed-upon roadmap for the meeting. The meeting agenda must contain enough information so resident members can easily understand what will be discussed at the meeting. For example, if the board intends to discuss installation of a new sprinkler system, using a generic agenda item like “maintenance” does not provide enough information. In this case, the agenda should clearly list “installation of new sprinkler system on south lawn.” That way, members can decide if they want to attend and give their opinions.

BEFORE YOU MEET – PREPARATION FOR HOA MEETINGS HOA boards must give notice to their member residents prior to meeting on any business matter. Additionally, as part of the notice, an agenda must be provided. Boards should not take action on any issues not on the published agenda. Special provisions exist for emergency actions.

The board packet provides board members with the agenda and supporting documentation for each agenda item. The board packet is also typically prepared by the board Chair and the community association manager and is distributed to board members far enough in advance of the meeting that they have time to review it carefully prior to the meeting.

Notice of Board Meetings Civil Code §4920 (a) Except as provided in subdivision (b), the association shall give notice of the time and place of a board meeting at least four days before the meeting.

The Open Meeting Act, Civil Code §4910, gives owners the right to see the meeting agenda but not to see the board packet. Information distributed to the board frequently consists of member correspondence, bid proposals, personnel issues, delinquencies, etc., all of which are protected under various privacy rights and executive session privileges. Board members are required to keep protected information confidential.

(b) (1) If a board meeting is an emergency meeting held pursuant to Section 4923, the association is not required to give notice of the time and place of the meeting.

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CONDUCTING MEETINGS & ORDER OF BUSINESS

Approval of Previous Meeting Minutes Minutes from the previous meeting are typically included in the board packet and are listed among the first items on the agenda. Minutes are reviewed for accuracy and are approved or amended and approved by the board.

The Chair conducts the meeting. While all members of the body should know and understand the rules of the adopted parliamentary procedures, it is the board Chair who is charged with applying the rules of conduct of the meeting and should be well versed in those rules.

The Chair is usually the President, but the board may appoint any officer of the Corporation to serve as Chair.

(Corporation Code §7213)

Meeting minutes are a recording of the actions taken by the board on every agenda item and are taken at every meeting. The purpose of minutes is to record actions, not discussions. Like the agenda, minutes should be simple, clearly stated, and easy for everyone to understand.

California Corporations Code §8320 requires the board to keep minutes of their actions at each meeting, and these minutes become part of the historic legal documents of the corporation.

The sequence in which business is taken up during a meeting is known as the “Order of Business.”

SAMPLE ORDER OF BUSINESS

Reports of Officers, Manager and Standing Committees

Establish a Quorum

Following the approval of the minutes, the board will hear reports from the various officers and then from the manager on administrative issues, and then from the committees. For example, most boards start with the Treasurer’s report on the finances. Then, a report from the manager on administrative items. These reports are at the beginning and from those who are working on the day-today operations of the HOA because they set the tone for the rest of the meeting. The committees report next. The Chair may set limits on the length of these reports and is responsible for conducting the meeting efficiently.

The starting point for a meeting is the establishment of a quorum. A quorum is defined as the minimum number of members of the board who must be present at a meeting for business to be legally transacted. The default rule is that a quorum is one more than half the board.

Call to Order After establishing that a quorum is present, the Chair calls the meeting to order. The formal manner of doing this is for the presiding officer to announce, “The meeting will come to order.” At that moment, the meeting becomes official and the members present can transact business on behalf of the entire organization. In the absence of a quorum, any business transacted (except for the procedural actions) is null and void.

Conducting HOA Business Following the order set forth in the agenda, the Chair announces each item of business, providing the subject and item number so the board, and all present, can follow the discussions. Usually, unfinished business items from a previous meeting are addressed first. The agenda may show these items under a category called “Unfinished Business.” Then, the agenda will show “New Business” items for discussion. HOAs should have rules that require business items to be submitted in advance so they can be properly documented and published to residents on the agenda by the “notice” date. If a new business item is submitted during the meeting, it can be added to the next meeting’s agenda. Boards should not take action on any business items that don’t appear on the published agenda.

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SAMPLE PATH FOR ITEMS OF BUSINESS Vote

Boards decide how to run their meetings.

However, consistency is important.

When the debate is concluded, the Chair restates the motion and calls for a vote. Following the vote, the Chair announces the results. The motion, second and vote are recorded in the minutes. The debate and public comments are not typically included in the minutes. Board members may abstain (refrain from voting) or recuse (leave the room during the vote) themselves if they feel they have a conflict of interest. Abstentions do not count in the vote tally. In the event of a tie, the motion fails.

Issue Introduction Upon being recognized by the Chair, the person responsible for each item will provide a brief description of the issue and the type of action needed by the board.

Questions & Clarifications

Closing the Meeting

The Chair will invite questions and clarifications. Board members should be recognized by the Chair before speaking.

When the busines on the agenda is completed, the Chair may ask if there is any further business. If no one responds, the Chair can state, “Since there is no further business, the meeting is adjourned.”

Public Comment

Conducting HOA Business After a Meeting

Accepting public comments from residents is a best practice. However, the board must set time limits. Public comments are sometimes referred to on the agenda as “open forum” and may appear on the agenda at any point during the meeting. The board may also request public comments in writing prior to the discussion.

Once the meeting is closed, there should be no further discussion of HOA business. When approached with HOA business outside of a published meeting, any director should refer the issue to the community association manager to be considered for the next meeting agenda.

It is usually a good idea to ask that HOA issues from residents be submitted to the community manager in writing.

Taking Action HOA board members have the authority to and are expected to act in the best interest of the entire community, leaving their own personal interests at home.

Delaying or purposefully deferring tough decisions can open the board to potential litigation.

Courtesy and Decorum The rules of order are meant to create an atmosphere where the members of the body can attend to business efficiently, fairly and with full participation. At the same time, it is up to the Chair and the members of the board to maintain common courtesy and decorum. Unless the setting is very informal, it is always best for only one person at a time to have the floor, and it is always best for every speaker to be first recognized by the Chair before proceeding to speak. The Chair should attempt to hear from every member of the board and ensure that the discussions are focused, but free and open. The Chair is responsible to limit discussions to the agenda items, and to begin and end the meeting on time.

Motions When it is time for the board to act, the Chair asks for a motion. A motion is a formal proposal for consideration and action. If a motion is made, the Chair asks for a second. A second must be made before moving to debate and vote. Motions can only be made by board members and are recorded in the minutes.

Debate The Chair states the motion, “It is moved and seconded that …” The board may then debate the motion. The Chair may set limits to the debate.

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Educating Your Board – Join CAI HOAs are permitted to budget for and pay the expenses for board member education. In fact, board education should be part of every HOA’s risk management plan. Educated directors are less likely to make costly mistakes. HOAs are also permitted to pay for annual membership in an organization like CAI that provides education, resources, and best practices to both current and future board members. CAI is the primary source of education for HOA board members internationally with chapters in all 50 states and nine countries.

For more information about joining CAI, go to www.caionline.org or call the local Coachella Valley office at (760) 341-0559.

75410 Gerald Ford Drive, Suite 102 Palm Desert, CA 92211 Phone (760) 341-0559 Fax (760) 341-8443 Admin@cai-cv.org