BYLAW AMENDMENTS

[Arthur541]

My HOA just amended our bylaws to start staggered terms.  They also contradicted what the bylaws used to say for the number of directors, between 5 an 9.   The bylaws read "The affairs of the Association shall be governed by the Board composed of not less than five (5) nor more than nine (9) Directors, the exact number to be determine from time to time by Board resolution.  All Directors shall be members.  All officers of a corporation, trust, partnership, or other such ower shall be deemed to be members so as to be eligible for Board membership 

Amendment   "All Directors will be elected for a Two(2) year term.  The Directors shall be divided into two classes, each class consisting of at least three (3) Directors and such classification based on the time for which they hold office. At the annual meeting held in 2018, the four (4) Directors who received the highest number of votes shall be elected for a term of two yers and the three directors who received the next highest number of vote shall be elected for a term of one (1) year.   ..."  

There is more. I think you get the gist of it.  Question is about the amendment.  As I see it, the amendment contradicts the provision allowing for between 5 and 9 directors by fixing the board at 7 directors.   In that case, is there a priority? Does the amendment fixing the number at 7 take precedence?  Or does the amendment fixing the number at 7 take effect?    

[Bruce Lages]

I agree that this amendment appears to introduce an inconsistency in the number of board members. Is there a priority?  Yes, there is - it's resolving this contradiction before a final vote is taken. Ideally, this should be taken care of before the amendment is submitted. If it's too late for that, it may be possible to fix the inconsistencies by the process of amendment while the bylaw proposal is pending, but there is a risk that this procedure could get you outside the scope of notice for the amendment as submitted (see RONR, pp 594-596 for a discussion of bylaw amendments and scope of notice).

As a last resort, you might end up with bylaws containing contradictory language, and then need to submit another amendment to remove the contradiction. Unfortunately for an organization like an HOA, that could be a tedious and time-consuming process.

edited to add - note that if the new amendment is adopted, a board of seven members will be in accord with the 'not less than five nor more than nine' provision, so there is no immediate risk of not being in compliance with that provision. But you will still have contradictory language, which should be addressed as quickly as possible.

Edited March 24, 2018 at 09:02 PM by Bruce Lages

[Arthur541]

Excellent Bruce!  Thank you for your reply and analysis.  You say there is a contradiction and a priority involved.  You see the contradiction too, then.  Unfortunately, the amendment has already been voted on by the owners.   And yes it is tedious and time consuming, and with this manager and board, not  likely to go anywhere.  This manager has written two books, one on condos and one on HOAs and teaches classes.  As a formerly licensed property manager and a member of the NAP, I know a little something about RONR and bylaws.  Half the time she is wrong about rules and what she tells people.   But the board takes everything she utters as gospel.  She hands the board something and they give it their blessing without proof reading.  It is astonishing and discouraging.  She will likely tell me the amendment overrules the existing bylaw provisions and she will hear nothing else.   That is until I bring in an attorney.  

That said, I seriously doubt this board will put anything to the owners now for a vote.  You said you see a priority?   I seemed to have missed what that priority is in your reply .  Are you saying that the existing bylaws should overrule the amendment somehow?  I don't how to prove it, but I submit the existing bylaws should overrule the amendment.   What is the priority you see?  

[Guest Who's Coming to Dinner]

2 hours ago, Arthur541 said:

 I don't how to prove it, but I submit the existing bylaws should overrule the amendment.

Bylaws should be interpreted in as whole and harmonized a way as possible. There is no such rule that older bylaws prevail over newer ones. In fact, it can be argued that greater weight should be given to the amendment since it is more specific and reflects current concerns.

As Mr. Lages notes, there is no serious conflict here. The amendment appears to meet the spirit of the existing bylaws because it falls within the bounds of "not less than five (5) nor more than nine (9) Directors." The number is fixed at seven only for the 2018 election and sets the minimum to six thereafter. There is a contradiction with the pre-existing bylaw which should be resolved as soon as possible, but I would not vote to ignore the amendment in the meanwhile.

[Joshua Katz]

I want to clarify something.  Was this amendment added to the bylaws, leaving the contradictory part in place, or did it replace the other section?

[Bruce Lages]

6 hours ago, Arthur541 said:

 

  You said you see a priority?   I seemed to have missed what that priority is in your reply .  Are you saying that the existing bylaws should overrule the amendment somehow?  I don't how to prove it, but I submit the existing bylaws should overrule the amendment.   What is the priority you see?  

The priority that I was referring to is the obligation to ensure that any proposed bylaw amendment - before it is presented to the membership for a vote - does not introduce inconsistencies and contradictory language with respect to other portions of the bylaws. It should be the responsibility of the member or members proposing the amendment to review the amendment's potential conflict with the rest of the bylaws and address those issues in their proposal before it is submitted.

Clearly, it's too late for that in your case, but perhaps the lesson will be learned for next time. I think this is especially important in the case of an HOA, where the bylaws may well have more direct legal consequences than those of a private association.

[Arthur541]

Gentlemen.  Sorry for the delay    I was reading through the replies. Thank you.  I guess I stand corrected on a few issues.  Joshua, yes the amendment was added to the bylaws, leaving the contradictory part in place.  I was going to attach a file with the rest of the bylaw amendment. I can't seem to do it.   The bylaw, with amendment reads as follows:  

"The affairs of the Association shall be governed by the Board composed of not less than five (5) nor more than nine (9) Directors, the exact number to be determine from time to time by Board resolution.  All Directors shall be members.  All officers of a corporation, trust, partnership, or other such owner shall be deemed to be members so as to be eligible for Board membership.   "Directors shall be elected by the voting interests on the date of the annual membership meeting for a one year term. "All Directors will be elected for a Two(2) year term.  The Directors shall be divided into two classes, each class consisting of at least three (3) Directors and such classification based on the time for which they hold office. At the annual meeting held in 2018, the four (4) Directors who received the highest number of votes shall be elected for a term of two years and the three directors who received the next highest number of vote shall be elected for a term of one (1) year. In the event there is a tie in the number of votes which would determine if a Director would serve a one (1) year or a two (2) year term, the remaining Directors shall decide amongst themselves by a majority vote who shall esrve either a one (1) year of a two (2) year term. In the event all seven (7) Directors receive an equal number of votes, the directors shall decide amongst themselves by a majority vote who shall serve either a one (1) or a two(2) year term. At each subsequent annual meeting and election thereafter, the successor to the class of Directors whose terms shall expier that year shall be elected for a term of two (2) years, so that the term of one class of Directors shall expire in each year. “

I think there seems to be another issue here. The state law reads

“ANNUAL MEETING.—The association shall hold a meeting of its members annually for the transaction of any and all proper business at a time, date, and place stated in, or fixed in accordance with, the bylaws. The election of directors, if one is required to be held, must be held at, or in conjunction with, the annual meeting or as provided in the governing documents. “

It appears to me that in deleting the part “Directors shall be elected by the voting interests on the date of the annual membership meeting for a one year term.” someone has deleted the bylaw requirement for the election of directors at the annual meeting?    Yes? No?

Are the comments about contradictions or not still stand? 

Guess Who You say the amendment sets the board at 7 directors, then allows for six directors thereafter?   Does anyone think this amendment still allows the board to increase or decrease its numbers?     

I appreciate everyone's indulgence here. 

[Guest Who's Coming to Dinner]

15 minutes ago, Arthur541 said:

Guess Who You say the amendment sets the board at 7 directors, then allows for six directors thereafter?   Does anyone think this amendment still allows the board to increase or decrease its numbers?

When read in conjunction with the pre-existing bylaw, it allows the board to set a number from six to nine after 2018.

[Arthur541]

Guess Who.   Interesting.   How do you see it setting the number at between 6 and 9?  By stating that the directors shall be in classes, each class consisting of at least three directors?  You see that as setting the stage for at least three directors after 2018?  Does that not contradict the existing bylaw allowing between 5 and 9?   Or is it irrelevant?  

[Dan Honemann]

18 minutes ago, Arthur541 said:

Guess Who.   Interesting.   How do you see it setting the number at between 6 and 9?  By stating that the directors shall be in classes, each class consisting of at least three directors?  You see that as setting the stage for at least three directors after 2018?  Does that not contradict the existing bylaw allowing between 5 and 9?   Or is it irrelevant?  

There is no contradiction. 6 is between 5 and 9.

[Guest Who's Coming to Dinner]

1 hour ago, Arthur541 said:

By stating that the directors shall be in classes, each class consisting of at least three directors?  You see that as setting the stage for at least three directors after 2018?  Does that not contradict the existing bylaw allowing between 5 and 9?

You wrote, "The Directors shall be divided into two classes, each class consisting of at least three (3) Directors…." Two times three is six.

[Joshua Katz]

1 hour ago, Guest Who's Coming to Dinner said:

You wrote, "The Directors shall be divided into two classes, each class consisting of at least three (3) Directors…." Two times three is six.

I think the question is on the degree of freedom.  If it helps, more specific provisions govern over more general (but that's not a reason to include two statements on one topic).

[Gary Novosielski]

But two classes of four directors each (four is at least three) would yield a board size of eight, which is still within the allowable range.

[Arthur541]

Fascinating.  Allow me to add another twist.  At least one attorney I have asked tells me the amendment contradicts the existing bylaw by changing the number of directors, then contradicts itself.  it first states that the directors shall be elected for two year terms, then requires two classes, with one elected for only one year.  LWith these contradictions the attorney claims the board should either rewrite the amendment, or be sued for violating the existing amendment.  If he is correct, is there something in RONR that restricts an amendment from contradicting an existing motion?  Why would an amendment that changes the number of directors and the range of them be allowed to exist in the byIt laws? They contradict each other  The statement that directors are to be elected to two terms contradicts the requirement for two classes, and the staggering of the terms in 2018.  If he is wrong, would you allow seemingly contradictory requirements to remain in the bylaws?  

[Josh Martin]

59 minutes ago, Arthur541 said:

Fascinating.  Allow me to add another twist.  At least one attorney I have asked tells me the amendment contradicts the existing bylaw by changing the number of directors, then contradicts itself.  it first states that the directors shall be elected for two year terms, then requires two classes, with one elected for only one year.

My understanding is that one of the classes in the first election will have one year terms, but in the future, all elected directors will have two year terms. Transitioning to a system of staggered terms will necessarily involve some of the directors first elected under that system having a longer or shorter term. This could, however, be clarified.

1 hour ago, Arthur541 said:

LWith these contradictions the attorney claims the board should either rewrite the amendment, or be sued for violating the existing amendment.

I have no disagreement that the amendment should be rewritten. As to a lawsuit, the attorney will be more knowledgeable on that subject than I am.

1 hour ago, Arthur541 said:

If he is correct, is there something in RONR that restricts an amendment from contradicting an existing motion?

Not in the case of bylaws. The bylaws should not be amended in such a way that they contain internal contradictions, but an amendment to the bylaws cannot be ruled out of order on the basis that it contains a contradiction.

1 hour ago, Arthur541 said:

Why would an amendment that changes the number of directors and the range of them be allowed to exist in the byIt laws?

Because the assembly has the power to amend its bylaws to read however it sees fit. An amendment to the bylaws could only be ruled out of order on the basis that it conflicts with a higher-level rule, not on the basis that it conflicts with the bylaws.

1 hour ago, Arthur541 said:

If he is wrong, would you allow seemingly contradictory requirements to remain in the bylaws?  

No, of course not. I would seek to remedy this situation as soon as possible (preferably before the amendment was adopted).

The proper course of action, as pretty much everyone (including the attorney) has told you, is to amend the bylaws as soon as possible so that there is no conflict.

[Arthur541]

Thank everyone very much  for your comments and questions.   I am surprised at what RONR will allow that I would think would be forbidden.   I would have thought that if an amendment to a motion that contradicts the motions would extend to a contraction in bylaws.   

if you can believe it, this amendment was drafted by the association attorney.   I have another attorney looking at it for her take.  

Another wrinkle I just thought of.  RONR discusses proxies.   I just attached a Limited Proxy that was used after the annual meeting to gain enough votes for the amendment to pass.  There were not enough ballots thus not enough votes with the ballots to pass the amendment.   The property manager then sent out this limited proxy I attached, without scheduling another meeting to use the proxy.  

First, as I understand proxies, they are intended to be used at a meeting when an owner cannot attend.  The owner gives someone their proxy and that holder then votes at a meeting with that proxy in hand.   Instead, this property manager mailed out the Limited Proxy I attached, and without holding a meeting to vote, simply collected and tallied the votes. 

To me, that is not how it works.  As I understand it, proxies are to be used at meetings.   There was no meeting held.   Was she still correct in simply tallying the proxies that were returned?  There was no meeting and no deadline for the limited proxy you see.  She just collected them and announced the vote.  

Comments please. 

HOA OAK HOLLOW AMENDMENT PROXY 2018.pdf

[Richard Brown]

What happened sounds improper for several reasons.

First, proxies are not permitted  at all by RONR unless authorized in the bylaws or specifically required by state law.

Second, if proxies were going to be used, they should have been submitted prior  to the counting of votes at the meeting.  Requesting proxies after the vote has been conducted in order to try to get enough votes to do whatever someone wants to do regardless of the outcome of the legitimate vote would constitutes a continuing breach and causes the result of a vote count that includes proxies to be invalid unless there were not enough proxies to affect the outcome of the vote.

Edited to add:  I doubt seriously that the property manager had any authority to send out the proxy forms, but, even if he did, I think using the proxies in this manner was improper and taints the outcome, probably rendering it invalid.  I also feel quite certain that the board also lacked the authority to  direct the property manager to send out the proxy forms after the fact.

Edited March 29, 2018 at 04:14 PM by Richard Brown
Added last paragraph

[Josh Martin]

2 hours ago, Arthur541 said:

I would have thought that if an amendment to a motion that contradicts the motions would extend to a contraction in bylaws.   

RONR does not permit a motion to conflict with a previously adopted motion unless the new motion is a motion to amend the previous motion. The same principle applies here. A motion which conflicts with the bylaws is not in order unless the new motion is a motion to amend the bylaws.

[Arthur541]

Richard     

22 hours ago, Richard Brown said:

First, proxies are not permitted  at all by RONR unless authorized in the bylaws or specifically required by state law.

Understood.  It so happens proxies are allowed for HOAs under Florida Statutes FS 720.306.   

22 hours ago, Richard Brown said:

Second, if proxies were going to be used, they should have been submitted prior  to the counting of votes at the meeting.  Requesting proxies after the vote has been conducted in order to try to get enough votes to do whatever someone wants to do regardless of the outcome of the legitimate vote would constitutes a continuing breach and causes the result of a vote count that includes proxies to be invalid unless there were not enough proxies to affect the outcome of the vote.

You say requesting proxies after vote has been conducted in order to try to get enough votes constitutes a continuing breach.  Am I missing something?   What is the  "continuing breach" part.   It causes the result of a vote count that includes proxies to be invalid unless there were not enough proxies.    The amendment was sent out as a ballot.  I have a copy.  Then th manager sent out the proxies with the amendment on it.    

22 hours ago, Richard Brown said:

Edited to add:  I doubt seriously that the property manager had any authority to send out the proxy forms, but, even if he did, I think using the proxies in this manner was improper and taints the outcome, probably rendering it invalid.  I also feel quite certain that the board also lacked the authority to  direct the property manager to send out the proxy forms after the fact.

You say you doubt the property manager had any authority to send out proxy forms, or the board to direct her, and that it was still improper.  You mean improper in that there was no meeting?  Can you elaborate?   

I am considering a letter to the board and the state about this.   Sadly, this property manager has broken a number of  rules and violated laws.     

RONR talks about proxies used for voting purposes.  That tells me they are intended for use solely at meetings.  There was no meeting. 

Another issue is the 90 days for the proxies.   is the 90 days for an adjourned meeting?   If so, then  Is that a correct assumption?  

[Josh Martin]

2 hours ago, Arthur541 said:

RONR talks about proxies used for voting purposes.  That tells me they are intended for use solely at meetings.  There was no meeting. 

A proxy is a means by which a member authorizes another person to vote, in person at a meeting, on that member’s behalf. Simply submitting a vote directly, outside of a meeting, is an absentee ballot, which is a separate procedure and must also be authorized in the organization’s bylaws or applicable law.

[Gary Novosielski]

On 3/30/2018 at 11:05 AM, Arthur541 said:

It so happens proxies are allowed for HOAs under Florida Statutes FS 720.306.   

Actually, it says they are allowed "unless otherwise provided ... in the governing documents".  This appears* to allow the bylaws to prohibit proxy voting. Do your governing documents [bylaws] provide that RONR is your parliamentary authority?  If so:

RONR says: 

If the law under which an organization is incorporated allows proxy voting to be prohibited by a provision of the bylaws, the adoption of this book as parliamentary authority by prescription in the bylaws should be treated as sufficient provision to accomplish that result (cf. footnote, p. 580).

So, do your bylaws permit proxy voting, or are you relying on the Florida Statutes, which appear* not to apply.

__________
* I am not a lawyer and this is not legal advice.

Edited March 31, 2018 at 11:50 PM by Gary Novosielski

[Arthur541]

Richard     

On 3/29/2018 at 12:09 PM, Richard Brown said:

First, proxies are not permitted  at all by RONR unless authorized in the bylaws or specifically required by state law.

Understood.  It so happens proxies are allowed for HOAs under Florida Statutes FS 720.306.   

On 3/29/2018 at 12:09 PM, Richard Brown said:

Second, if proxies were going to be used, they should have been submitted prior  to the counting of votes at the meeting.  Requesting proxies after the vote has been conducted in order to try to get enough votes to do whatever someone wants to do regardless of the outcome of the legitimate vote would constitutes a continuing breach and causes the result of a vote count that includes proxies to be invalid unless there were not enough proxies to affect the outcome of the vote.

You say requesting proxies after vote has been conducted in order to try to get enough votes constitutes a continuing breach.  Am I missing something?   What is the  "continuing breach" part.   It causes the result of a vote count that includes proxies to be invalid unless there were not enough proxies.    The amendment was sent out as a ballot.  I have a copy.  Then th manager sent out the proxies with the amendment on it.    

On 3/29/2018 at 12:09 PM, Richard Brown said:

Edited to add:  I doubt seriously that the property manager had any authority to send out the proxy forms, but, even if he did, I think using the proxies in this manner was improper and taints the outcome, probably rendering it invalid.  I also feel quite certain that the board also lacked the authority to  direct the property manager to send out the proxy forms after the fact.

You say you doubt the property manager had any authority to send out proxy forms, or the board to direct her, and that it was still improper.  You mean improper in that there was no meeting?  Can you elaborate?   

I am considering a letter to the board and the state about this.   Sadly, this property manager has broken a number of  rules and violated laws.     

RONR talks about proxies used for voting purposes.  That tells me they are intended for use solely at meetings.  There was no meeting. 

Another issue is the 90 days for the proxies.   is the 90 days for an adjourned meeting?   If so, then  Is that a correct assumption?  

[Arthur541]

Gentlemen I apologize for the delay   I just wrote the HOA about issuing threats to owners about entering their properties.   Thank you for your responses about the proxies.  I am writing to the board about the bylaw amendment and asking that it be re-drafted.   I have since heard a complaint from another homeowner that the proxies were simply piled in a box when they were received, there was no security, and there was no meeting.   He complained the whole count was done improperly and should be investigated.   Guess I am not the only one.   The manager seemed to have taken the proxy votes did mass mailings,  with no deadlines, and simply counted the votes at various times, until she had enough votes to pass the amendment.   I have been told by board members that instead of having another meeting within the 90 days, the board first voted for a 30 day limit, then voted to extend the 30 days, then she simply counted the votes.   Ever heard of a board voting for 30 days at at time on proxies?   

A mass mailing, as opposed to a meeting,  for bylaw amendments is authorized in our bylaws.   If there were a mass mailing for a bylaw amendment, should there not be a deadline for the ballots to be received and counted?  

[Atul Kapur]

You had not indicated earlier that " A mass mailing, as opposed to a meeting,  for bylaw amendments is authorized in our bylaws." (or, if you did, I missed it). Any further comments would need you to provide the exact wording of the sections of your bylaws that authorize mass mailings to make decisions and it would be helpful to have the exact wording of the section on amending your bylaws.

[Gary Novosielski]

On 4/4/2018 at 6:14 AM, Arthur541 said:

Understood.  It so happens proxies are allowed for HOAs under Florida Statutes FS 720.306.     

Unless RONR is your parliamentary authority.  See above.