While SB 99 from the 2015 legislative session required Board meetings to be open to all Association members, the Utah legislature, effective May 10, 2016, has provided 2 ways by which a Board can take action without a meeting.
The first way by which a Board can take action without a meeting is through unanimous consent of all Board members. Under this approach, a Board member may email the other Board members with a proposed action. If all Board members affirmatively consent, the proposed action becomes effective. Any Board member can revoke consent at any time until the action becomes effective. The action becomes effective when the final Board member so consents unless a different effective date is designated. If a single Board member fails to consent to the proposed action, the matter cannot be decided without a meeting.
The second way by which a Board can take action without a meeting does not require unanimous consent from all Board members. Under this approach, unless the Association’s Bylaws provide otherwise, a Board member may email the other Board members with a proposed action that includes a specific notice. This notice must state and include the following information:
- The specific action to be taken;
- The time by which a Board member must respond to the notice;
- A statement that failing to timely respond to the notice will have the same effect as: (i) abstaining in writing, and (ii) failing to demand in writing that the action not be taken without a meeting; and
- Any other matters deemed necessary by the Association.
The proposed action is approved if the affirmative votes equal or exceed the minimum number of votes that would be required if the action was taken at a meeting (typically this would be a majority of a quorum of Board members); and the Association hasn’t received written demand from a Board member that the action should not be taken without a meeting. In addition, this second approach may not be utilized by an Association if its Bylaws say that they cannot.
To illustrate this new legislation, let’s say the ABC Association has 3 Board members — X, Y, and Z. The ABC Association Bylaws provide that Board decisions require approval from at least 2 Board members. Board member X becomes aware that an Owner’s vehicle is parked contrary to the Association’s rules. Board member X sends Board member Y and Z an email proposing that the Association levy a fine against the Owner for the violation. Board member Y consents to the action, but Board member Z fails to respond. At this point, the Board would not be able to take action under the first approach since unanimous consent from all Board members was not reached. Knowing that the next Board meeting wasn’t scheduled for another 30 days, Board member X tries the second approach. Board member X emails the other Board members and provides them with the specific notice requirements. Board member Y responds consenting to the action, but once again, Board member Z fails to respond. This time however, the action carries because no Board member demanded that the matter be decided at a Board meeting and because it was approved by at least 2 Board members, which fulfills the Board voting threshold required by the Bylaws.
This new legislation can be an effective way for the Board to take action in between regularly scheduled meetings. However, it is not recommended that it be used simply as a way to avoid the open Board meeting requirements.Content on this site is provided for informational purposes only. It is not intended as, and does not constitute, legal advice. While all content is believed to be correct within the scope of its purposes when written, it may be incomplete and/or the relevant law may have changed. Content on this site is not intended to comprehensively cover any subject, does not cover a number of related matters, and does not cover any person or entity's particular situation. As such, it is not reasonable for anyone to rely upon the information herein with respect to any particular legal matter. Rather, readers are encouraged to retain a licensed attorney to provide individualized and current legal advice.fry