Chapter 5 - § 5.4 • MEMBERSHIP IN ASSOCIATION, MEETINGS, BUDGETS, AND VOTING

• Jurisdiction: Colorado

§ 5.4 • MEMBERSHIP IN ASSOCIATION, MEETINGS, BUDGETS, AND VOTING

§ 5.4.1—Membership in Association

The association is the organization — ordinarily a nonprofit corporation — that governs the common interest community.⁴⁹ Membership in the association is not voluntary. All unit owners are members of the association and subject to its authority.⁵⁰ A purchaser of a unit immediately becomes a member of the association and acquires membership rights, even though the declarant controls the association.⁵¹

§ 5.4.2—Meetings

The CCIOA requires that there be at least one meeting each year — the "annual" meeting — of the unit owners, as the members of the association.⁵² It also provides for "special meetings."

The Act sets out the requirements for notice of a members' meeting. Notice must be given by the association secretary, or other officer specified in the bylaws,⁵³ no fewer that 10, nor more than 50 days before the meeting. Notice must be either hand delivered or sent prepaid by United States mail to the mailing address of each unit or to any other mailing address designated in writing by the unit owner. The notice must state the time and place of the meeting and the items on the agenda, including the general nature of any proposed amendment to the declaration or bylaws, any budget changes, and any proposal to remove an officer or member of the governing board. Under the CCIOA construction defect statute, before the governing board of a common interest community association institutes a construction defect action, it has to mail or deliver written notice of the anticipated commencement of the action to each unit owner at his or her last-known address described in the records of the association.⁵⁴ The notice has to call a meeting of the members — which has to be held no less than 10 days and no more than 15 days after the mailing date of the notice — to consider whether to bring the action.⁵⁵ The CCIOA establishes a procedure for court-ordered amendments to a declaration on the request, by petition, of an association governing board, and the unit owners are entitled to notice of the proposal and at least one meeting to discuss it.⁵⁶

In addition to any electronic posting or electronic mail notices that may be given, notice must also be physically posted in a conspicuous place,⁵⁷ to the extent posting is feasible and practicable. Keeping up with the times, the CCIOA encourages associations to provide all required notices and agendas in electronic form, by posting on a website or "otherwise."⁵⁸ If electronic means are available, the association must provide notice of all regular and special unit owner meetings by electronic mail to all owners who request it and who furnish the association with their electronic mail addresses. Electronic notice of a special meeting must be given as soon as possible, but at least 24 hours before the meeting.

Association meetings must be open to every unit owner or any person designated by a unit owner in writing as the unit owner's representative.⁵⁹

The governing board of the association will also, of course, hold its own meetings. Normally those meetings will be held once a month, but special meetings may be called as well. All regular and special meetings of the governing board — or any of its committees — must be open to attendance by all members of the association or their representatives,⁶⁰ except in the case of an "executive" or "closed door" session for one of the limited purposes permitted by statute.⁶¹ Association members have a legally protected interest in open meetings and courts, therefore, may issue injunctions against violations of that interest.⁶²

While the CCIOA requires that the agendas for board meetings be made reasonably available for examination by all members of the association or their representatives, it says nothing about advanced notice of meetings. On the other hand, the Nonprofit Corporation Act contains a statute regarding board meeting notices under which regular meetings may be held without notice of the date, time, place, or purpose of the meeting, except where the Act or bylaws provide otherwise.⁶³ For special meetings, however, at least two days' notice must be given of the date, time, and place of the meeting, although the notice need not describe the purpose of the meeting except when the Act or bylaws require otherwise.⁶⁴ The Act also provides for waiver of notice by a director, either in writing or through attendance at, or participation in, the meeting.⁶⁵ These notice provisions concern, at least implicitly, notice to directors, whereas in a common interest community, notice to members is important. Because the CCIOA mandates that member-owners be allowed to attend board meetings, a bylaw requiring the board to provide adequate notice to the owners would seem necessary to make that right meaningful.

In addition to being permitted to attend board meetings, unit owners (or a designated representative) must also be allowed to speak during a meeting "at an appropriate time determined by the board, but before the board votes on an issue under discussion."⁶⁶ The board may impose reasonable time restrictions on speaking, however, and if more than one person wants to address an issue, and there are opposing views, the board must provide for a reasonable number of persons to speak on each side of the issue.⁶⁷

If an association member has a disability that impedes his or her ability to participate in meetings, the association may be required under the federal Fair Housing Act to provide a reasonable accommodation. For example, if a member is hearing impaired, the association may need to provide a sign language interpreter or Computer Aided Realtime Translation.⁶⁸

Practice Pointer
There is at least one in almost every common interest community: the unit owner who distrusts the governing board, challenges virtually everything it does, and speaks to every agenda item (and then some). Placing restrictions on speaking to curtail those activities usually seems like a good idea, but it rarely works. Usually the restrictions themselves become yet another topic for disagreement. If the suspicious owner is in the least paranoid, the restrictions only fuel that fire. The association attorney should recommend patience, tact, and as much grace as the board members can muster. Should one represent a disgruntled unit owner, consider that he or she may have lost sight of the forest for the trees. One might recommend the client be more selective in choosing issues to contest and employ a measure of civility. A private meeting with the association president may prove useful. If the attorney shows an appreciation for the board's tribulations and offers some concessions on behalf of the client, that will probably be gratefully received. For example, the client may agree to limit himself or herself to speaking on no more than two agenda items per meeting, to address remarks only to the person chairing the meeting, and to refrain from making personal accusations against board members. Remember also that board members live in the community they govern and, therefore, any disputes occur literally in their backyards. It may be that what concerns them most is calls to their homes or protest letters shoved under their doors. If an attorney — whether representing the association or the unit owner — can negotiate restrictions on those activities, board members may be less defensive and more willing to listen to the unit owner at meetings.

§ 5.4.3—The Right to Call an Association Meeting

Unit owners who have 20 percent (or any lower percentage specified in the bylaws) of the votes in the association may call a special meeting of the owners.⁶⁹ That right does not, apparently, extend to annual meetings, although in most common interest communities the documents require that an annual meeting be held and either set a specific date or time period during which the meeting must be held.

The Nonprofit Corporation Act allows a district court to order that a members' meeting be held.⁷⁰ Unit owners may need to turn to the court in several circumstances: (1) failure, whether inadvertent or intentional, to hold the annual meeting; (2) disputes between members and the governing board about which the board does not wish to have a public discussion; and (3) the board or individual designated to call special meetings is unable to do so because of absence, illness, or vacancies on the board. The Nonprofit Corporation Act provides that a district court may "summarily order" that a meeting of members be held.⁷¹ Any voting member entitled to participate in an annual meeting may apply for a court order if an annual meeting was required to be held and was not held within the proper time.⁷² A person who participated in a call of or demand for a special meeting⁷³ may also apply for a court order if either notice of a called special meeting was not given within 30 days after the date of the call or the date the last demand needed to require the calling of the meeting was received by the corporation or the special meeting was not held in accordance with the notice.⁷⁴

§ 5.4.4—Voting

The declaration that creates⁷⁵ the common interest community must distribute certain "allocated interests" to each unit.⁷⁶ One of those interests is the unit's votes in the association.⁷⁷ Commonly, each unit receives one vote, but votes may be allocated on the basis of size or value of a unit in relation to the other units.⁷⁸ The allocations may not discriminate in favor of units owned by the declarant or an affiliate of the declarant.⁷⁹ The declaration may provide that different allocations of votes will be made to units on particular matters specified in the declaration.⁸⁰ It may also allow cumulative voting for election of members of the governing board,⁸¹ and class voting on specified issues affecting the class, including election of the governing board;⁸² however, declarants are not permitted to use cumulative or class...