The obligation, the opportunity, the challenges

Annual meetings are a requirement of every HOA.  But the annual meeting is a little different for a small community. Small associations don’t have a lot of amenities, maintenance, social calendars and common obligations like large HOAs have to discuss. Larger communities have long lists of ‘establishing community vision 'and ‘planning for infrastructure’ that just don’t apply to the small HOA experience. Let’s look at annual meetings from the small HOA perspective. 

Here’s the good news: There are fundamentals to small HOA meetings, and the list is not long. We have guides and templates to help you. More on that below. 

Here’s the (not-so) secret: Although an annual meeting is essential, small HOAs don’t always keep up with requirements of their bylaws and state.    The volunteers who have accepted board leadership roles have many challenges to making meetings happen. And if they don’t have reminders and support from professional management, associations can easily fall behind. This can affect the HOA’s ability to legall operate, and potentially affect the owner’s property value.  

Here's six reasons why annual meetings are so crucial: 

This meeting is required by your bylaws and most states.  

It’s a primary responsibility of the board. Review your bylaws on ‘duties and responsibilities of board members’; it’s in there. If there is conflict in the future, it will complicate resolution if annual meetings have not been held. 

Not holding the meeting may affect the owner’s ability to sell their property to a buyer with a federally backed mortgage (more below).  

It’s an opportunity to establish good communication and avoid conflict. Small HOA neighbors need these meetings so residents can understand each other's concerns in a productive setting(tenants can attend too!).  

It’s a time to provide important information: There are new laws on the state and federal level that affect HOA ownership. Owners don’t always have time to keep up with---or know how to connect to HOA rules, or how old and new state and federal laws are affecting their HOA property. 

It’s a time to establish board roles and boundaries. Boards have a duty to report to the owners, but that doesn’t mean when an owner texts at 9:30 at night asking about association business. The annual meeting and the availability of minutes of that meeting meet the board’s obligation to report to owners.

The obligation  

Annual meetings need to happen to meet obligations set out in the community bylaws. Although the list isn’t long, there are things that need to be done. Most bylaws stipulate that board elections and budget approval must be part of the annual meeting.

The election of board members is a part of the annual meeting. Even if the same officers are continuing, this must be confirmed at the meeting. Other owners can also volunteer for board service so that those who have already served can take a break.

Presentation of the annual budget for the next year is an important part of the meeting. Many associations require that owners vote to approve the budget. This discussion and vote are a part of the annual meeting. All homeowners share an ownership of the association, and it’s financial health and management affect their property value. Annual meetings are the time to review financial reports, budgets, and expenditures together as a group.

There are obligations outlined in your community bylaws for what needs to be included in the meeting, how owners need to be notified, and what needs to happen after the meeting.

The opportunity 

The annual meeting is also an ideal time to do a maintenance review so owners understand how the community is protecting property values.

The meeting provides homeowners with the opportunity to give input and have their voice heard about community policies and plans. The time for this communication is in the meeting, not through outside communication.

It’s a good time to review basics of community rules: Rules of living in the HOA aren’t top of mind for owners, until one gets broken, or one runs contrary to what an owner wants to do. Reminders of basic rules and how an HOA works on a routine basis can help prevent misunderstandings. The annual meeting is one opportunity to do so.

It’s a way to show evidence of board service: Get some credit, board volunteers! You do a lot for the association, and this is the opportunity to present that volunteer work.

What if we don’t hold the meeting? 

One of the most tangible consequences of not having meetings is that it may put sales in the HOA at risk.   When a buyer is looking at a purchase in the community, their mortgage lender will examine aspects of how well the community is run.  Keeping up with dues collection and having meeting records are two of the main elements for small HOAs. Jump to this article for more information on what lenders want to see to easily approve loan purchases in your association. It’s not just possible, but likely that these records will be needed in the future. 

There is potential for board members’ liability if annual meetings aren’t held. If an owner has a problem with the HOA at any point and it gets contentious, one of the first things attorneys look for is whether the board has fulfilled its duties. If it hasn’t, it could mean trouble.  

The challenges 

Challenges of the annual meeting for board members are preparation, owner attendance; and running the meeting. MicroHOA provides resources for meeting preparation, participation, and running the meeting are in your community portal under Board Resources.  

More resources in your community portal under Board Resources:  

-Agenda planning tool 

-Budgeting

-Meeting notice message template 

-Meeting minutes templates 

-Tips to run a better meeting that accomplishes goals and prevents conflict.  

An annual meeting is a required activity to keep your small HOA compliant with bylaws and statutes. The board volunteers have accepted the roles of keeping the community compliant with those rules. Use MicroHOA’s support tools to make your annual meeting easier.