This is a very interesting time of year in the condo and HOA world. Of course everyone’s thoughts turn to the holidays. We start thinking about Christmas, Chanukah, New Years and all of the days off we get to spend with friends and family. The problem is that this is typically the busiest time of year as well, and the most important time not to make any mistakes.
Many of you hold your annual meetings and budget meetings in December and January of each year. That means budget meetings have to be scheduled, annual meetings have to be scheduled, and lots of different mailings need to go out. Over the past few weeks, listed below are actual problems I have dealt with that can result in having to start the budget or election process all over again:
Budget Issues:
Failing to provide sufficient advanced notice of your annual meeting: The condo statute clearly provides that the budget must be mailed to the owners at least 14 days prior to the budget meeting. Make sure you don’t blow the deadline.
Reserves Issues:
Remember that in a condo, the budget must show the reserves as fully funded. If the Board wants to give the owners the opportunity to waive or reduce the funding of reserves, a meeting must be scheduled before the budget meeting in order to count the votes or proxies necessary to waive the full funding of reserves. If the waiver occurs, at the budget meeting the board will adopt the budget that does not contain fully funded reserves. If the vote does not pass, fully funded reserves it is, like it or not. Remember to include the following language in your proxy in big bold type: WAIVING OF RESERVES, IN WHOLE OR IN PART, OR ALLOWING ALTERNATIVE USES OF EXISTING RESERVES MAY RESULT IN UNIT OWNER LIABILITY FOR PAYMENT OF UNANTICIPATED SPECIAL ASSESSMENTS REGARDING THOSE ITEMS.
Election Issues:
Your annual meeting must take place in the month called for in your bylaws. Are you following that schedule?
Are you electing the right number of directors? Remember that if your documents call for a range of directors, like no less than x and no more than y, the number of directors is automatically set at 5.
Are you allowing everyone to vote? Remember that even if an owner is 90 days delinquent in payment of assessments, their right to vote can only be taken away from them if your governing documents allow for it or if your documents contain the “as amended from time to time language. In addition, , the board must specifically vote to suspend the rights of an owner at a properly noticed meeting and the owner must be notified of the suspension in writing.
Slow down:
The year is almost over. You vacation is nearly here. Although it’s tempting to think about anything but numbers and votes, now is the time to stay focused. And if you’re not sure about what’s required or how a problem should be tackled, that’s what we are here for.
