Homeowner associations, whether based on condominiums or platted real property, are a useful tool for allowing owners (or co-owners) to have a degree of self-governance and allowing the owners to, together, fund common areas and facilities. However, especially with larger developments, one of the greatest challenges to implementing effective homeowner associations is simply the logistical challenge of securing quorums and the required votes to take action. After all, in the busy lives of everyday people, attending a homeowner association meeting in person will often be too low on the priority list.
However, there is good news. Homeowner associations are typically non-profit corporations, and thus, are governed under the Michigan Nonprofit Corporations Act, Act 162 of 1982 (the “Act”). The Act allows written consent to be used to avoid in person meetings. In other words, the owners in an association can merely sign an agreement, or a consent, to take action, rather than having a meeting. However, the Act requires that the bylaws and articles of incorporation for the association must authorize and allow for such written consents. This is noteworthy as some bylaws and articles of incorporation fail to authorize such written consent and other explicitly ban such action, requiring an in person meeting instead.
To take the convenience factor one step further, some homeowner associations have begun using online ballot and voting systems to further streamline voting. This allows quick access to review proposals and vote for even the busiest owners. However, again, such procedures must be authorized in the governing documents of the association.
Updating an association’s bylaws and articles of incorporation to allow for quick and efficient electronic voting can be a great way to encourage further participation in the association and reduce the administrative burden of other forms of voting. However, doing so without ensuring that the association is authorized to do so in the bylaws and articles of information will leave the association, as well as decisions in an unauthorized manner, in jeopardy.
Our attorneys at Mika Meyers are knowledgeable and experienced in the laws related to homeowner associations. Please feel free to reach out to our firm at 616-632-8000 and ask for Curtis Underwood if you have any questions or think you may need assistance in assessing or updating your homeowner association’s articles of organization or bylaws.