North Carolina Planned Community Act Types of Meetings and Meeting Minutes Ed Bedford, J.D.

The North Carolina Planned Community Act applies to all NC planned communities created on or after January 1, 1999

Older communities may adopt the entire Planned Community Act by a vote of 67% of all owners. Certain provisions apply to ALL planned communities regardless of age.

Types of Meetings All Planned Communities  §47F – applies to ALL planned communities regardless of age Regular Meetings Special Meetings Board Meetings

Regular Meetings  §47F-3-108(a) requires all planned communities hold a Regular Meeting AT LEAST once each year.  Similarly, the NC Nonprofit Corporation Act requires “A corporation having members with the right to vote for directors shall hold a meeting of such members annually.” §55A-7-01

Time of Annual Meeting  Typically the Bylaws specify the time for the annual meeting, either in general or specific terms.  But, the failure to hold an annual or regular meeting at a time stated in or fixed in accordance with the corporation's bylaws does not affect the validity of any corporate action. § 55A-7-01(e)

Can Regular Meetings be held more often?  Yes, the annual requirement is a minimum, an Association may choose to hold regular meetings more frequently.  Directors would typically still be elected at an Annual Meeting.

What is done at a Regular Meeting?  At annual and regular meetings, the members shall consider and act upon such matters as may be raised consistent with the notice requirements. § 55A-7-01(d).

Special Meetings  The NC Planned Community Act provides that ALL planned communities may have Special Meetings.  Special Meetings may be called by: the President a majority of the executive board or by lot owners having ten percent (10%), or any lower percentage specified in the bylaws, of the votes in the association.

Notice of Special Meeting The notice of any special meeting shall 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 a director or officer.

Timing of Notice Not less than 10 nor more than 60 days in advance of any special meeting.

Executive Board Meetings  Meetings of the executive board shall be held as provided in the bylaws. § 47F-3-108(b).  At regular intervals, the executive board meeting shall provide lot owners an opportunity to attend a portion of an executive board meeting and to speak to the executive board about their issues or concerns. § 47F-3-108(b).

“Regular Intervals???”  The term “regular intervals” is not defined. Many communities have taken the position that annually is a “regular interval”.  The executive board may place reasonable restrictions on the number of persons who speak on each side of an issue and may place reasonable time restrictions on persons who speak.

Communities subject to NC Planned Community Act For communities created on or after 1/1/99, or who have adopted the full Planned Community Act, there are two other types of meetings.

Budget Ratification Meeting Within 30 days after adoption of any proposed budget for the planned community, the executive board shall provide to all the lot owners a summary of the budget and a notice of the meeting to consider ratification of the budget, including a statement that the budget may be ratified without a quorum. § 47F-3-103

Time of Budget Ratification Meeting The executive board shall set a date for a meeting of the lot owners to consider ratification of the budget, such meeting to be held not less than 10 nor more than 60 days after mailing of the summary and notice.

 There shall be no requirement that a quorum be present at the meeting.  The budget is ratified unless at that meeting a majority of all the lot owners in the association or any larger vote specified in the declaration rejects the budget.

Example A five person Board approves a budget. The community has 500 homeowners. Two hundred come to speak at the budget ratification meeting and all are opposed. The budget is ratified as 251 would need to vote against it for the budget to be rejected.

What if a budget is rejected?  In the event the proposed budget is rejected, the periodic budget last ratified by the lot owners shall be continued until such time as the lot owners ratify a subsequent budget proposed by the executive board.

Combination Meetings The Annual Meeting and Budget Ratification Meeting may be combined if the timing is right for both of them.

Removal Meeting Notwithstanding any provision of the declaration or bylaws to the contrary, the lot owners, by a majority vote of all persons present and entitled to vote at any meeting of the lot owners at which a quorum is present, may remove any member of the executive board with or without cause, other than a member appointed by the declarant.

Any Meeting?  Typically removal is voted on at a Special Meeting called as discussed above.  However, the removal authority applies at ANY meeting of the lot owners at which a quorum is present.

Meeting Minutes Required All financial and other records, including records of meetings of the association and executive board, shall be made reasonably available for examination by any lot owner and the lot owner's authorized agents as required in the bylaws and Chapter 55A of the General Statutes. § 47F-3-118(a).

A corporation shall keep as permanent records minutes of all meetings of its members and board of directors,… § 55A-16-01(a).

What Are Minutes? This is a surprisingly controversial issue, and one that often creates hurt feelings as the Secretary’s minutes are criticized.

Option A – Detailed Minutes The minutes should reflect all matters brought before the board, whether adopted, dismissed without discussion or vote, rejected, deferred, tabled, or simply presented as information. The Board Secretary: Roles and Responsibilities in Community Associations, p. 14.

Option B – Record of Decisions Minutes are a record of decisions made at a meeting, not what was said. There is no need to summarize debate. Minutes are limited to formal motions and votes. Roberts Rules of Order, 11 th Edition, §48.

Option C – Decisions plus X The minutes must include decisions made. They may include other information desired by the Board. Draft minutes don’t become official until approved by, or even modified, by the Board. A Board can decide what they would like to have included in the minutes.

What is best?  Either B or C.  Detailed minutes are a lot more work, contain more errors, and are often used against an Association in litigation. Board members may also be less willing to participate in an open discussion if they believe their statements will appear in minutes.

Minimal Contents of Minutes  Introduction – name of association, type of meeting, date, time, location, attendance.  Approval of prior minutes.  An exact record of every motion made and vote taken.  Time of adjournment.

Length of Minutes  Meeting minutes will often be only one page long, even if the meeting lasted hours.

Do Not Include  Remarks of Guests or Homeowners  Seconder’s name  Withdrawn Motions  Any personal opinions or editorial remarks

Executive Session Minutes  Minutes of Executive Sessions should be kept separate from regular session minutes.  Minutes of Executive Sessions should be reviewed and approved in Executive Session.