What is the year’s hot topic? Special meetings! Special meeting requests from owners have been coming up quite a bit this year, and oftentimes boards do not know what to do when receiving such a request, and as a result do not take the proper statutorily-required steps upon receipt.
A special meeting demand may involve a request for a recall meeting, or it could be a request to discuss a particular issue in the community. Regardless of the cause for the demand, there are certain requirements and steps a Board must take when it receives the request. Fortunately, Colorado law provides excellent guidance on how to handle them.
The Colorado Common Interest Ownership Act (“CCIOA”), in Section 308(1), specifically addresses meetings of unit owners and sets forth the criteria requiring an association to call a special meeting. It is important to note this provision applies both to pre- and post-CCIOA communities, i.e., communities created before and after July 1, 1992.
Section 308(1) requires associations to call special meetings of members if any one of the below criteria are met:
- Board president calls the meeting
- A majority of the board calls the meeting
- 20% of all owners request a special meeting
- A lower percentage of owners as specified in the governing documents requests a special meeting.
Based on the above, any provisions contained in the association’s governing documents requiring more than 20% of the owners to request special meetings are contrary to CCIOA and unenforceable.
In addition to CCIOA, the Colorado Revised Nonprofit Corporations Act (the “Nonprofit Act”) supplements CCIOA, and, in the event owners request a special meeting, the Nonprofit Act requires such requests to be in writing and state the purpose, e.g., recalling a board member. Additionally, the Nonprofit Act requires the written request to be signed by all owners who are requesting the special meeting.
Once an association receives a demand for a special meeting from owners, it must carefully review the signatures to ensure the request truly represents at least 20% of the owners (or lower amount if so specified in the governing documents), which means reviewing the signatures themselves to ensure they are from owners and not renters or individuals who are not on the deeds.
The association only has 30 days from the receipt of the request to perform the verification of signatures, as required by the Nonprofit Act, in addition to sending notice of the special meeting by the 30th day of receipt. If a board fails to send notice of the special meeting within the specified 30 days, the owners requesting the meeting may set the meeting and mail out their own notice on behalf of the association, and the association will have no control over the date, time, or location of the meeting.
It is also important to note that pursuant to CCIOA, meeting notices must be sent at least 10, but not more than 50, days before the meeting. Therefore, notices of special meetings must also comply with this timeline. Based on these requirements, it is possible for an association to technically wait 80 days from the date a request is submitted before holding a special meeting, i.e., notice is mailed at the 30-day mark after receipt and the meeting date is set for 50 days after notice date. However, utilizing this approach may been seen as bad faith by a board and cause political ramifications due to poor optics.
For more information concerning special meetings and requirements upon receipt of such a request, or if you have specific questions, please contact an Altitude attorney at 303.432.9999 or at [email protected].