Annual Meetings and Special Meetings: FAQs for Homeowners Associations and Shareholders

Why have we called this meeting?  To once again talk about meetings, an important and necessary part of homeowners association governance.  As you may recall, in our recent article “Board Meeting Basics,” we provided a helpful go-to- guide to help homeowners associations hold more effective and successful… you guessed it, Board meetings.  Now we’re following up with the scoop on two additional – but just as important – types of association meetings:  annual meetings and special meetings.

As we discussed in our previous article, HOAs, condo associations and community associations operate as businesses, so they’re required to hold regular meetings of their shareholders and officers – i.e. homeowners and Board members.  So in addition to Board meetings, associations must hold annual meetings at least once a year, as well as special meetings, on occasion, where they can address important issues that arise in between.  When it comes to planning and holding annual and special meetings, associations must comply with their bylaws – that’s where they’ll find the criteria they must follow, such as providing advance notice, obtaining the required quorum, and the procedures they must follow for voting and naming a proxy… we’ll explain all that in a moment. 

If you’re looking for comprehensive information about the different types of association meetings, you can ask seasoned Board members, or consult with an experienced property management company for information and guidance.  But to get you started, we’ve put together some answers to your most common questions about annual and special meetings. 

What is an annual meetings? 

By law, all associations are required to hold annual meetings of their resident shareholders and unit owners.  Annual meetings are held primarily to inform and update homeowners about important Board business and key association issues, such as finances, projects and upcoming capital improvements, as well as to conduct the community’s Board elections. 

What goes on? 

Activities like officer and committee report presentations, information about staff or management changes, voting on proposals requiring shareholder approval, such as special assessments and/or proposed amendments to the governing documents, rules or regulations, and other key  association issues.  And importantly, annual meetings provide a forum where homeowners can speak, ask questions and participate in discussions about important association business – hopefully, amicably and productively. Open forums on the agenda provide structure for community members to speak.

In addition, the agenda usually includes time for discussing, voting on and approving the annual budget.  If you’re a homeowner, we probably don’t have to tell you that the budget directly impacts your HOA fees, which you and your fellow owners are required to pay.  So while it’s always beneficial to attend your community’s annual meeting, it’s especially critical if you don’t want to see your dues rise or new amendments pass.  By attending, you can express your concerns before the final vote. 

But that’s not all. Annual meetings are often scheduled to coincide with Board member elections.  Board members – homeowners who volunteer to protect and manage the community’s interests – are elected by a majority vote of shareholders, who may vote in person at the annual meeting, or by naming a proxy, if permitted by the community’s governing documents (the association bylaws and state statutes will determine your quorum for voting.  Which leads us to…

Quorums and proxies.

When it comes to voting at both annual and special meetings, HOA bylaws or state statutes usually require that the association obtain a quorum – a specified number or percentage of homeowners who are present to vote, either in person or by proxy.  Bylaws also specify whether shareholders are permitted to vote by proxy, i.e. assigning another individual to cast their vote.   Again, your property management company will have the knowledge and expertise to ensure you comply.

Who can attend? 

Many annual meetings are open, meaning anyone who is an owner can attend, but each community’s attendance rules and requirements are defined by its governing documents and state statutes.  Typically, all shareholders can attend annual meetings, but as for others, like tenants, family members who reside at the property, potential homebuyers and proxies, it’s up to your bylaws and state to determine participation.  In addition, homeowners’ legal guardians, trustees, personal representatives and those with power of attorney can attend and vote.  But keep in mind that homeowner voting rights are not absolute – in certain circumstances, members can lose their voting rights. 

What about vendors and other professionals, like attorneys?  While they may be invited to attend specific meetings to provide information or make presentations to homeowners, they may be restricted otherwise.  And it bears repeating – if you’re a homeowner, it’s highly beneficial to attend your community’s annual meeting – the best way to stay informed about association business, make your voice heard on issues you feel strongly about, and cast your vote for Board members, as well as bylaw amendments, special assessments and other key association issues.  And even if you don’t attend and are therefore uninformed about new rules affecting your community, you’re still are responsible for following them. 

Advance notice. 

The association is required to notify homeowners in advance of the meeting, providing complete information, including date, time and location – either mailed or displayed in a conspicuous location on the property.  How notification must be given is explicitly stated in each association’s governing documents and state statutes.  If your community is professionally managed, you can also ask your property management company for guidance.

What is a special meeting? 

Unlike annual meetings, which take place once a year to handle association business and major issues, special meetings may be called to handle specific concerns, suggestions or problems that arise between meetings – or those not typically addressed in routine Board or annual meetings.  But special meetings must remain on point – only the issue stated in the meeting notice can be discussed.  That means that if an issue arises that was not specifically stated in the notice, it’s not open for discussion at the special meeting.

How can I request a special meeting? 

Most association bylaws allow homeowners to call special meetings, and they spell out the criteria -- usually by creating a petition outlining the reason for the meeting, obtaining a certain number of signatures, and presenting the petition to the Board president or secretary.  If the Board approves the request, a special meeting will be held to address this concern.  Just like with annual meetings, special meetings require advance notice to all owners within a specified timeframe, but the timeframe may be different – as always, check your community’s governing documents and state statutes. 

Annual meetings and special meetings are both necessary and integral parts of association management – and valuable ways to ensure smooth operations, enhance the lifestyle of homeowners and residents, and position your community for success, both now and in the future.  For more information on annual and special meetings and how to ensure yours are effective, visit FirstService Residential.