 Think Tech Hawaii. Civil engagement lives here. Thursday, 3 o'clock. It's time for another edition of Condo Insider, Hawaii show about association living. Pretty much designed to educate board members and homeowners alike. And the purpose of the show today is called Meetings, Meetings, Meetings, or the 3Rs. The rules, regulations, and risk within a meeting. So I like the person called Meetings the practical alternative to doing real work. I know when I'm working in the company, they schedule meetings after meeting after meeting, and then I have no time to do the work I'm supposed to do. So I call it the practical alternative to doing real work. I brought with me my lovely friend forever, Nalaan attorney, and who will talk about the various types of meetings of associations, and I want everybody to know where you are now, because you have switched firms maybe six months ago or so, and that's where you are and again, what you do, kind of your background. Aloha, my name is Nalaan. I'm an attorney with a law firm, Damon Key Leong, Cupchuck-Hastard. We provide full services, legal services to our community in Hawaii, including condominium, community association representation. I also practice immigration law. I'm from China. I was born and raised there. So speak Mandarin. I also help a lot of matters, speaking clients in the section on litigation matters. Such a pleasure to be back again. You do some immigration work, too. Yes. Do you enjoy that? I do. I think I deeply feel that's an area there where I'm touching people's life, making such a big difference. I would imagine that in today's world, there's been a lot of changes in the law and the philosophy and the rules and regulations with all the stuff going on all over the borders across our countries. Is that true? Yes. It's a very hard-debated area with all the new administration bringing all these new policies, extreme wetting by America, high America, not only for family-based immigrants, but also for employment-based and westman-based across the board, asylum, all areas of immigrants that are facing definitely challenges in this new political climate. Well, thank you for all you're doing. I think taking care of the—I don't want to call them a little people. That sounds demeaning, but the ordinary Joe on the street or Jane on the street or Joe and Jane's children on the street, make sure I'm politically correct, cover everybody, but it's a tough job, but we're certainly on new ground in some ways. I think that this area is an area that's kind of had fallen into a routine and needs to be looked at again to kind of correct the laws and make it clear what the requirements are, because it's been pretty much—there are laws, but they've been pretty much ignored in some respects in certain areas and I know it's a tough job, but thank you for doing it anyway. My pleasure. I mean, I really hope—join the other people who's been working towards this great goal, you know. Might be a fun to do a show on that one day. I'll consider about that. I think it'd be interesting. But anyway, we know condo associations particularly have meetings and basically the kind of meetings we're going to cover today are you have the annual meeting, you have a special meeting of the members, which would be like an annual meeting of the members, then you can have a regular board meeting, a special board meeting, an executive session, there's something called a written consent, and then kind of thrown in there somewhere are committee meetings. I'd like to kind of go through the general legal requirements and concept of each of them, and let's begin with the annual meeting. Why do we have annual meetings and why do they have to have annual meetings? Well, annual meeting, annual meeting. So, at least once a year. I mean, this is just you know, for example, some very important things for the association to do, like for example, you've approved last year's annual meeting minutes and make sure any, you know, access funds from the association collected will be rolled over to next year's maintenance fee expenses so that you don't, you know, affect your nonprofit organization tax status. You know, something other things like you want to, you know, like for example you have any changes to your association documents. This is an area for owners to vote on it adopting important resolutions or policies that requires ownership approval. You know, of course completing last year's certain business like changing managing agents or, you know, appointing an auditor, things like that just to keep the operation going for the association. And probably the number one thing is elect directors. Yeah, for that very important. Like when the terms up, you want to have a new batch of officers and directors. So one of the things that I've seen before is I'll go to an annual meeting and owner will be who, who, about something. He'll say, I want to make a motion. And he's in new business the appropriate time in the, in the meeting. He says I want to make a motion that the board of directors immediately reduce the maintenance fees by 10%. Is that a lawful or correct motion? That's probably invalid because you are kind of interfering with an area or function that is within the board's so discretion to exercise on. You know, the chair of the meeting may consider not to entertain this motion because it's lacking legal policies. Yeah, I think that most things I've been told is that your governing documents provide certain authority to the board. And so if in fact you're trying to tell the board to do something within its own authority, that in fact then you're violating the bylaws because the bylaw gives the board majority the discretion to make those decisions. And so you can't make any motion but you can make what we call an advisory motion, which will be something in a sense that I'd like to make a motion of the board reconsider the annual budget and take a closer look at it to see if there's anything we can do to reduce the maintenance fees by 10%. Worth advising that they want the board to know that the owners are concerned about something. They're not instructing them specifically to do something like mandating a reduction of 10%. We're making a motion on an advisory basis of the board that we as the more owner majority are concerned about this, we'd ask you within your discretion of the bylaws to look at this again. It would be a proper motion. Yes, exactly. And of course if you get enough ownership approval you can do a special petition on certain important things like amending your project documents or limiting the board's powers or removing certain board directors. Definitely if you get a 25% of ownership approval, you can do it via a special vehicle. And so when you go to the meeting, they usually publish the agenda which we call technically the order of business. Where does that come from? I would say like the Roberts Roof order, but most important thing is you should first look at your bylaws. If there's something that's not provided in your bylaws then you can always go to Roberts Roof. In most associations I've seen the bylaws say this is the order of business. Why I bring this up? Because parallel to the thing that I was saying a moment ago is that so you have an order of business that will say notice of meeting, reports, new business, old business, election, whatever it may be. So someone will go, the meeting will be called to order and someone will immediately say I want to make a motion to advise the board we want to have you look at the budget again. Well the proper thing would be it's out of order because the bylaws provides the order of business. The appropriate time will be a new business to bring up that motion. It's not the wild, wild west. The order of business defines by the bylaws what you will discuss in one specific order. And so a person who's all hoo-hoo and huffing and puffing and wants to get right to the bottom line and make a motion may be told he has to wait. Yes and the number one thing for any meeting to conduct official business you have to make sure you have a quarrel. If without a quarrel you can't do any business basically. And that's an interesting point because I've seen this argument. We scheduled the annual meeting and we didn't have a quorum. So we've had our annual meeting this year. We just didn't have a meeting because we had no quorum and now we'll just wait until next year to hold a meeting. And we won't elect directors, everybody will be able to stay where they are and stay in place. And what's your first reaction to that? I think any general counsel for that association would definitely advise against that because that's literally a violation of the law already. It has some really hidden consequences to it. First of all to answer the question, no, you've got to take efforts to adjourn a meeting to a future date or to do something to hold that meeting. It's not just electing directors because it affects the terms and could affect in theory some of the legality of the board of what they do. But more importantly I want you to think about this. And I had a CPA on the show that what about the tax resolution? If you don't pass that tax resolution in a lawful meeting you now no longer have that defense of why you don't pay taxes on the excess gain of money you didn't spend that year by taking a position and we rolled it over without passing it. So holding the meeting is kind of a critical thing and just because you don't want to stand up to the owners and explain what you've done and why or you don't want to have an election because you don't want the board to change is not in the spirit of the governing documents and the bylaws and you have to hold an annual meeting. Pretty much true? Yes. So let's see what else I have. Fixed by your phone here. How about the form? Is that a part of the annual meeting? The form? What form? The order is form. Yes, that's usually a good area for give owners about opportunity to talk about the issues they are concerned about. Forms technically are not an official part of the annual meeting because it's not in the order of business. However, it's strongly recommended you have a form either before or after the annual meeting and there's debate on which is better. To me, the answer is straightforward. If you have issues of contention, you're probably better off having the form so people aren't interfered with or have false understandings by fake news what the real issues are. That you're better off if you have contentious issues to do the form basically you call the meeting to order and say if there's no objection we're going to adjourn to a 30 minute form to discuss the painting project, whatever the issue of contention is, and then call the meeting back to order. 30 minutes is not enough, you can also call the meeting back to order and say if there's no objection, we're going to extend the form for another 15 minutes in a parliamentary way, deal with that. But if it's just basically, well we want to hear from you, you took the time out of your day to come to the meeting, we finished the official business more times than not astound after the meeting, but it's not in the minutes and it's not a part of the official meeting, but indirectly it's a part of the annual meeting because you want to have that relationship with your owners that they can talk about things that may be important to them. Yes, and also I think the most effective actually to prevent disputes or reduce disputes between owners is to improve your communication between the board and the association owners, and think about it, people manage to take the time to attend the meeting, such a precious opportunity for you to have people together to have a meaningful discussion about the association issues, so you should really make full use of that opportunity. Well the annual meeting is a very important part of the condominium process, it's certainly you want to have the minutes and the record because of that, so we're going to take a break in one minute, but I want to ask you one quick question. Special meeting, what's the difference? The special meeting usually is called for specific purpose, so you need to just give an audience and hold the meeting just for that special purpose, usually for some important issues. So special meetings are member meetings, but it's limited to the notice of the meeting which you can discuss, although I'd point out a removal of directors can be done without notice at an annual or a special meeting. Now in that note we're going to take a short break, but this time went really quickly in talking about meetings, but we'll be right back in one minute. When I was growing up, I was among the one in six American kids who struggle with hunger. But with the power of breakfast, the kids in your neighborhood can think big and be more. Go to hungryis.org to make breakfast happen for kids in your neighborhood. One in three teens to smoke will lose years of these moments. It's your life. Don't miss a thing. Hey baby, that's you. I want to know will you watch my show. I hope you do. It's on Tuesdays at one o'clock and it's out of the comfort zone and I'll be your host, R.B. Kelly. See you there. That prior person on the commercial R.B. Kelly has his bodies in motion things, so I'm here trying to add that to my show. Anyway, we're talking about meetings, meetings, rules, regulations and risks and we've talked about annual meetings and special meetings and now we're going to talk about the basic business of the association board meetings and there's regular board meetings and special board meetings. So let's talk about regular board meetings, which is really the meat and potato the whole thing. So what is it and what is the regular board meeting? A regular board meeting would be all the board directors, you know, it's opportunity for them to regularly me to conduct a business that's within their authority to do for the association operation and stuff like that and owners has the right to participate except of the executive session. And sometimes I see boards do a lot of things offline by email and vote by email, not through the regular meeting. Is that a good idea? Generally not a good idea, but sometimes it's sort of necessary when you have urgent issues, I would recommend my clients for whatever they discussed over the email vote by email. They have to do a ratification officially at the next regular board meeting to sort of endorse that prior decision. If you look under parliamentary procedure, just a little footnote to that of let's just say you voted to spend $10,000 to do something by email vote and then you went ahead and signed the contract and then you go to the regular meeting and you say you want to ratify our earlier decision. You originally said yes could say no and you could be up the creek. Business has to be done in a regular meeting. I can understand that we had a situation where there was a gas leak and we had to shut the gas off making emergency repair because the building had no gas for their kitchens and in that case we went ahead and did an email vote that we were going to hire such and such a plumber to take care of this. Maybe the president had the authority to make that decision on an emergency like that. You have to do something. That's a true emergency but a lot of boards, they kind of extend what is an emergency or not and so it's highly recommended against email votes you should take action at a meeting. So we're going to have a meeting. Do I have to tell anybody about it? Oh yeah, you have to set out notices 72 hours in advance and post the notice at the project. And what does that notice include? The notice has to have basically a agenda telling people the date and time, the place of the meeting and what's going to be discussed at the meeting and the items. Yeah, it's interesting because originally under the old law until last year it was a daytime and place of meeting. Now it has to have the expected agenda on the notice as well. And so this is what we think is going to be on the agenda How does that prevent them at the meeting from adding or deleting things from the agenda? No, I mean things happen in real life business, yeah. Yeah, the board meeting is a business meeting and this is what we expect to discuss but they're not limited to that. It's not like a public hearing it's a business meeting of the board and this is what we expect to discuss so owners have some idea if they have a topic they're interested in but they're not limited to changing the agenda and adding or deleting items depending on their business needs of the night. But again, there's a good faith guideline there. When I just started my practice I remember we were working on a litigation case where certain board directors intentionally added on some agenda items near the very end of the meeting without any advance notice to the owners and they try to just do their business their own way. That's not appropriate and it's subject to contest by other owners so I would caution against doing that often. True. So speaking of the other, can I speak at the meeting? Can I participate? Yes and no in a way because the board meeting the whole purpose is actually for the board to conduct their business. If an owner wants to be, let's see, they definitely cannot make a motion to do something like that but I would see there would be opportunities if the board is seeking input from an owner or there's an owner's forum then that's your opportunity to really talk and communicate. Yeah because the statute last year was changed also requiring boards to adopt owner meeting participation rules. I've always recommended they put that at the bottom of the notice and basically the law says that on any agenda item the board should be, and actually the owner should be allowed a reasonable time to make an input. So we suggest the board should we paint the building blue or pink in my example. Okay the first the board will discuss it I like blue I like pink blah blah blah Okay before we vote on that though any owners have any input I like blue I like pink and I like blue because and then okay thank you we're going to vote now. It's not meant as a debate between the board and owner in a shouting match and disrespectful but the law is pretty clear that owners have a right to participate in the meeting on items on the agenda for a limited time and the board has a right to limit the time because most boards will are small and they work well together and they're not really into you only get two minutes most people all get along and they have a discussion but they do have the right to limit the participation if it gets out of hand so the business can get done for the need. You know the other thing I've heard of and have you heard of the expression committee of the whole the committee of the whole is under Robert's rules where the board might meet as a board to have a quote work session but they can't take any votes there and owners don't go it's just a private meeting of the board called a committee of the whole it's defined under Robert's rules where boards can sit down and talk about an issue in greater detail and then when it's ready for the regular agenda the regular board meeting is brought up at the regular board meeting and then they will have a discussion and vote at that time. I think our viewers ought to know that there is something called committee of the whole that boards can do and they do occasionally meet on a kind of board right now and they have construction issues and on some repairs and we occasionally meet as a committee of the whole with the architect or engineer and a lengthy session because it would really extend the board meeting so long that it wouldn't be productive and the kind of things being talked about or more specifications and what did you pick this product and that's done as a committee of the whole and it's certainly lawful. So how about voting in board meetings? Board directors cannot vote by proxy but you know they can't participate let's say by phone if you know the documents the project documents does not prohibit that. Is it important that the board members individual votes be recorded in the minutes? Yes sometimes if there's dissenting opinions you know that's also very important to notify that in the meeting minutes and if there's conflict interest standing for more voting those should all be reflected in the meeting minutes. In theory and I didn't warn you of this potential question I never know what I'm going to say. So you go to a board meeting and there's a motion to do something and some people think it's a breach of their fiduciary duty and so the vote is four in favor and one against so if there's a lawsuit against the board and maybe the directors individually assume the one who said no I don't want to do that would be protected. I think so and that's the purpose where you should have accurate meeting minutes reflecting you know the different opinions and the basis for that. So special board meeting what's the difference? A special board meeting you know similarity is called for a special purpose and you also have to follow the notice requirements and talk of you know like to do the business notifying the agenda. So it's kind of like a special meeting of owners except it's the board and you're again limited to the item for the call of the meeting the only difference would be at a special members meeting you can remove the board at a special board meeting other than the official notice there's nothing you can do we're going to talk about the settlement of the lawsuit that's what we're going to talk about and I've seen often special meetings called where it's published the notice there an agenda says our only agenda item is to go to executive session to discuss the current lawsuit on such and such and they do it that way because the statute requires that executive sessions be called from a regular meeting or special meeting and the notice be what it's going to be talked about but they don't want owners all running down there thinking they're going to do other business when they're limited because of special meetings so they put in a notice the only thing we're going to do is go to executive session to discuss the ongoing lawsuit with the contractor whatever it may be so going into that what is an executive session? Executive session usually if the association has some sensitive matters let's say personnel or you know like any lawsuit or in the process of negotiating a certain contract or any topic that's like attorney kind privilege or you know that's the collection you have an owner dispute you want you know resolve between the owners those kind of things you want to go into a private session you know and then talk about it and then you know that's not part of the regular meeting it's not reflected in the meeting minutes either. The thing I've seen often beside the personnel and legal things where they have a dispute with a specific owner on something and they want to deal with it so the owners can speak freely and the board can speak freely to try to resolve it as it's only involving the board and that owner so I often see the owners are invited to that portion of an executive session related to their dispute it may be to negotiate a payment plan under delinquency it may be they have a dog violation problem or something they want to talk to the board about and try to resolve it we often see that in an executive session because it's somewhat a private matter it's only an association matter but they have that free discussion but as required when they come out of an executive session if they've decided to do something finitely not just they'll never do something they'll put the association at risk but if they've decided we've approved in general we've approved a payment plan for a delinquent owner they would just make a general statement what they did at the executive session. Yes correct and before you go to that you also need to reflect in the meeting minutes you know what's the general nature of the thing you're going to talk about at the executive session. We're down to our last minute so in 30 seconds you'll ask to find a written consent Yes so that's a vehicle used for getting ownership approval if you are unable to get it through a vote at an annual meeting or association special meeting then you should consider using written consent you know it's very effective for a lot of stuff that you're making in the association business like a loan approval like amending certain project documents or passing certain resolution policies affecting ownership interests then you should consider using that it's only good for a year the consent you get back if you couldn't get enough percentage you got to restart the whole process. Well we're out of time but I want to thank you again for being here it's always fun to talk with you about these issues I feel like we never have enough time because these issues are somewhat complex. We hope you as our viewers learn a little bit to spark your attention and spark your interest. We always say in technical issues you should confer with your attorney to make sure because every issue is kind of a little bit different. We want to thank you for watching Kondo Insider we'll see you again next week in aloha.