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Colorado law requires all board meetings to be open to the members of the association, unless the board goes into an executive session. Colorado law (C.R.S. 38-33.3-308(4)) allows the executive board or any committee thereof, to go into executive or closed session and can prohibit owner attendance for the following limited matters:
Prior to the time the members of the executive board or any committee thereof convene in executive session, the chair of the body shall announce the general matter of discussion as enumerated in the statute.
The executive board can allow attendance of such other persons as requested by the board (such as their attorney, committee members, employee(s), homeowner(s), etc.).
The right of a member to speak prior to any action being taken by the board of directors only applies to meetings of the board that are open to the members.
No rule or regulation of the board or any committee thereof shall be adopted during an executive session. A rule or regulation may be validly adopted only during a regular or special meeting or after the body goes back into regular session following an executive session.
The minutes of all meetings at which an executive session was held shall indicate that an executive session was held, and the general subject matter of the executive session.
Usually the minutes of an executive session do not state the details of what was discussed during that executive session. A new Colorado law, HB12-1237 (effective January 1, 2013) allows associations to withhold executive session records from inspection by owners.
To promote responsible governance, associations shall adopt policies, procedures, and rules and regulations concerning the investment of reserve funds. A board has an obligation to invest and manage reserve funds in a prudent and responsible fiduciary manner.
To promote responsible governance, associations shall adopt policies, procedures, and rules and regulations concerning certain matters, such as a reserve study. Under the Colorado Common Interest Ownership Act (CCIOA), an association is not required to undertake a reserve study; however, it must have a policy in place to address:
A reserve study is a planning tool designed to assist the association to anticipate, and prepare for the property's major repair and replacement projects and expenditures. Some examples can include: roof replacement of the buildings, replacement of building siding, resurfacing of the roadways, or the replacement of the building elevator. It is a budgetary planning tool that consists of two parts, the physical analysis and the financial analysis, and it identifies the current status of the reserve fund and a funding plan to offset the anticipated future major common area expenditures. The study can determine the remaining useful life of the physical components of the association that are required to be maintained, as well as the time frame and expenses associated with the repairs and replacement of those components. The study can be completed by a hired professional, or it can be done internally.
Look first to your association bylaws, as they usually include a provision to remove board members, as well as the procedure for removal and under what circumstances. Commonly, there is a requirement that a certain number or percentage of owners must sign a petition requesting a special meeting to remove a board member or members. The association must then schedule and notice that special meeting to allow the owners a vote to remove those board members. Typically, this is done at a special owner meeting instead of an annual owner meeting due to the timing of the removal and meeting notice provisions.
The Revised Colorado Non-Profit Act does allow members of a nonprofit corporation to remove board members at an owner meeting noticed specifically for that purpose, or by a judicial proceeding below:
(1) Directors elected by voting members or directors may be removed as follows:
(a) The voting members may remove one or more directors elected by them with or without cause unless the bylaws provide that directors may be removed only for cause.
(b) If a director is elected by a voting group, only that voting group may participate in the vote to remove that director.
(c) Subject to section 7-127-208 (3), a director may be removed only if the number of votes cast to remove the director would be sufficient to elect the director at a meeting to elect directors.
(d) A director elected by voting members may be removed by the voting members only at a meeting called for the purpose of removing that director, and the meeting notice shall state that the purpose, or one of the purposes, of the meeting is removal of the director.
(e) An entire board of directors may be removed under paragraphs (a) to (d) of this subsection (1).
(f) A director elected by the board of directors may be removed with or without cause by the vote of a majority of the directors then in office or such greater number as is set forth in the bylaws; except that a director elected by the board of directors to fill the vacancy of a director elected by the voting members may be removed without cause by the voting members, but not the board of directors.
(2) Unless otherwise provided in the bylaws:
(a) An appointed director may be removed without cause by the person appointing the director;
(b) The person removing the director shall do so by giving written notice of the removal to the director and to the nonprofit corporation; and
(c) A removal is effective when the notice is received by both the director to be removed and the nonprofit corporation unless the notice specifies a future effective date.
(3) A designated director may be removed by an amendment to the bylaws deleting or changing the designation.
At an appropriate time determined by the board, but before the board votes on an issue under discussion, unit owners or their designated representatives shall be permitted to speak regarding that issue. The board may place reasonable time restrictions on persons speaking during the meeting. If more than one person desires to address an issue and there are opposing views, the board shall provide for a reasonable number of persons to speak on each side of the issue.
Frequently however, problems and disputes arise at meetings between board members and the membership. Having meeting procedures in place can assist with running an effective meeting, such as parliamentary procedure.
Parliamentary procedure (Roberts Rules of Order) is specifically designed to help debates and discussions go smoothly, especially when you have a large number of people or contentious issues. It helps to ensure that everyone in such a meeting gets a fair and equal opportunity to participate and speak, utilizing formal motion procedures
Many times an association may only have to consider adopting these rules on a temporary basis when that particular need arises and when they would be useful for effectively running the meeting.
For instance, these rules can:
At the heart of parliamentary procedure is the rule of the majority with respect for the minority. The objective is to allow deliberation upon questions of interest to the association and to arrive at the sense or the will of the membership upon these questions. Everyone should have an opportunity to speak at owner’s meetings at the appropriate time and in a well-mannered way.
The Duty of Loyalty
Oftentimes an association board must handle very complex or time-consuming matters where they may be tasked with issues that require specialized knowledge, expertise and experience. At other times in the board decision-making process, it may be valuable to the board and community to understand the history and reasoning behind past board practices and decisions.
An advisory board or advisory board member(s) may be able to assist with providing that information, experience and knowledge to the present board of directors. Advisors could be utilized to handle a specialized project and act as a supporting role to the board. Some specialized areas of expertise and backgrounds could be in the areas of business, accounting, legal, insurance, management, construction and real estate. Past board presidents could be very helpful explaining and filling in the history of the community.
Not only can advisory members fill any gaps that may be missing on the present board with regard to specialized knowledge or expertise, they could also be considered potential future board members, learning the board process and gaining experience for the benefit of the community.
If you consider these types of advisors, it is important to have written policies in place in the association’s governing documents. Consider this type of advisor’s purpose, membership, appointment, termination, orientation, attendance, duration, authority, restrictions, guidelines, conflict of interest issues, and ethical concerns. Discuss this advisor concept with legal counsel to make sure that it is workable with the association’s declarations and bylaws.