Privilege...or Pain in the Neck? Annual Meetings

Privilege...or Pain in the Neck?

Thousands upon thousands of people in New Jersey live in condos, HOAs or co-op buildings. Although it naturally varies from one development to another, many, possibly the majority, of association members pay very little if any attention to the actual business of their board or association.

But there's one time of year that residents can't help but be aware of their board's activity: the time of the annual meeting. For weeks, signs are posted, fliers slipped under doors, e-mails sent. Finally, the big day comes. And, surprise, surprise, large numbers of residents still don't attend! Some buildings or developments will even sponsor raffles or door prizes to entice unit owners to come to annual board meetings.

What exactly is the annual board meeting, and how can management and the board itself make unit owners aware of the benefits of participating—or even make them look forward to going?

The Legal Angle

From a legal standpoint, according to Stephen Kotzas, an attorney with the law firm of Berry Kagan Sahrandnick Kotzas & Riordan in Toms River, the frequency of, and requirement for, board meetings is usually governed by the bylaws, not by the law itself. He says, however, "It's always held a minimum of once a year, but of course it can be held more frequently."

Attorney David Byrne, of the Lawrenceville-based law firm of Stark & Stark, adds that, "There is no requirement that condo or HOA boards meet a certain number or frequency of [annual meetings.] However, New Jersey law requires most binding decisions to be made at open meetings," a requirement that makes open board meetings a necessity.

According to the professionals, most boards are pretty good about giving their community residents plenty of notice of when the annual meeting will take place. But what exactly is a board's obligation to publicize their meetings? What are the rules governing how (and how far in advance) residents must be alerted about upcoming meetings?

Again, says Kotzas, the amount of advance notice required is usually spelled out in the given association's bylaws—sometimes even a maximum number of days. "The minimum is five to 10 days, by practice, if not by law," he says. "If the bylaws are silent, [one would] fall back on the New Jersey Condominium Act."

When dealing specifically with condos, Byrne adds, "The law is clear." The state's current administrative code requires that condos provide adequate notice of board meetings at which binding decisions of the board will be made.

The code provision, N.J.A.C. 5:20-1.2, defines "adequate notice" as being at least 48 hours in advance, with the notice posted prominently in at least one place on condo property that is accessible to unit owners. It must also be, either— mailed, telephoned, e-mailed, or hand-delivered to two newspapers, as well as filed with the condo association's business office.

Byrne points out, though, that if the condo posts and keeps posted an annual schedule of meetings for the upcoming year, with their locations, "at places at which meetings are posted" within a week after the last annual meeting, none of these things are necessary. If the date, time or place changes however, the board is responsible for informing unit owners seven days after the change is decided upon.

None of this applies to closed (usually monthly) board meetings or meetings where private decisions, such as those with outside contractors or employees, are made.

What about the worst-case scenario: a board that refuses to hold public meetings? Hoboken attorney Frank Marciano says that, "Not having annual meetings does not trigger any penalty or any real negative [legal] consequence to a board member or unit owners. As a law without any meaningful means of independent enforcement, the only way to force an association to have meetings is to threaten a lawsuit, which usually works."

Fortunately, legal action is usually a last resort after all other means of persuasion have been exhausted.

Why Don't More People Come?

Now we know why board meetings are scheduled, and how they must be publicized. But that still doesn't explain why so relatively few people come to meetings.

"Why don't they? I'm going to use a broad term: apathy," says James Magid, a property manager with Wentworth Property Management Corp. in Lawrenceville, which manages more than 450 associations in the tri-state area. "You can potentially define apathy a couple of different ways. If the homeowners are generally happy, then anything else is more important than coming to the meetings. On the other hand, sometimes people feel that if it doesn't make a difference what they do—the board will choose their contractors and make their decisions. This shouldn't be the case, but it seems to be so."

Often, unfortunately, attendance at meetings goes up in times of trouble or when problems arise, such as a big increase in insurance, increases in maintenance payments or special assessments.

But when things are seemingly running smoothly, unit owners often think, in effect, that they'd rather just leave all these boring details to the small, core group of people who seem to be interested in running this thing. After all, they seem to be doing a good job!

If it Ain't Broke…

Is this situation universal? For example, is there a difference between high-rise condo and co-op buildings in cities like Hoboken and Jersey City and the more typical spread-out suburban association? Does living closer together make for closer, more involved communities?

Paul Santoriello, head of Taylor Management in Morristown, thinks so. "Typically, in a high-rise building, the association impacts [the unit owners] more on a daily basis. They look at services—we provide their heat, we manage their mail, there are so many things we get involved in."

On the other hand, he says, in more suburban condos, residents can hop out of their cars and go right into their homes, and the affairs of the development may seem to have little effect on them.

However, it can work both ways. Marciano, for example, says that in Hoboken, the "Mile-Square City" with its young population, "the vast majority of people see their condo as a temporary living arrangement and don't care to participate unless they are faced with a specific problem or an increase in fees."

Nicolas DiMeglio of Superior Property Management in Somerset, says he doesn't think it makes that much of a difference. "Homeowners are all busy working or taking care of their own schedules that don't allow for time to come to meetings," he says. "I have seen the best turnout of residents at meetings in 55-and-older communities."

According to the experts, this may be because these older residents have both their days and nights free, and have more time to devote to communal affairs.

Other professionals offer more reasons. Magid says that a new association or building typically has a higher interest level among unit owners because they have new issues that they want to get resolved, new committees they want to get established. Kotzas believes that communities that mail out ballots, solicit proxy votes and, in general, keep up frequent communications with the unit owners will get a higher turnout than others.

Regardless of the community demographic, communication is definitely important. Nowadays, with board members and managers able to produce large numbers of fliers at a click of a button, not to mention sending out group e-mails or posting material on the community's website, getting the word out is much easier than it was in the past.

And, of course, associations that are, on the whole, occupied by the owners will get higher turnouts at meetings than those developments where many units are rented to tenants, and the actual owners often live far away from the development.

Making Meetings More Attractive

Now that you've hopefully gotten people to the meeting, what are some ways to make the meeting more attractive to residents so that they'll come back next year? Of course, you can try the obvious—cookies, coffee, raffle drawings.

Making the meeting more efficient will also get more owners back next year. Some of the tools for this can include visual presentations, guest speakers, distributing the agenda in advance so that people will know what to expect, including coffee breaks so that people can refresh and refocus their attention, and making sure the meeting doesn't go on for hours. And of course, try to start on time!

On another level, you'll find that you'll get more unit owners at the meeting if you limit discussion to issues concerning the development as a whole, not just those of one or two people. You know the type—the person who always says his or her faucet is leaking or is constantly complaining about the noise from the next unit.

Santoriello, whose company manages more than 100 communities, says, you'll be more successful if you concentrate on the common areas and common issues, and invite people who have personal issues to discuss them after the main part of the meeting is over. Not that these individual concerns aren't valid—they absolutely are—but that's not why most people come to the meeting.

What definitely doesn't work, says Magid, is when unit owners are not given the opportunity to comment, and are just expected to vote. "[The residents] should be able to just tell the board what's on their mind—certainly what they're happy with, since it's nice to hear, and also if they're unhappy."

And cookies, bagels, coffee and orange juice aren't the only benefits residents get from going to the board meeting. They'll know what's going on in their own community and won't be shocked when, for example, a month-long elevator repair project starts or scaffolding is put up.

They'll also have the opportunity to come face-to-face with the board and management, whereas most of the year, especially in a large development, they often will deal mainly with clerical people at the office.

"The most tangible benefit," says Marciano, "is the ounce of prevention for a pound of cure theory. If you take the management of the building seriously, it will result in a better upkeep and a higher price on resale."

Ranaan Geberer is a freelance writer and editor living in New York City.

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