This document is intended to provide general information. It does not and cannot provide specific legal advice. For additional information or answers to questions, you may contact Augustus H. Shaw IV, Esq. of Shaw & Lines, LLC at 480-456-1500 or send questions to [email protected].
Board Member E-mail Use and Unanimous Written Consent:
Are HOAs Unknowingly Breaking the Law?
What is the Real Issue with Unanimous Written Consent and E-mails?
A.R.S. 33-1804(E) (Planned Communities)and A.R.S. 33-1248(E) (Condominiums)states that the Statutes regarding HOABoard meetings shall be interpreted “infavor of open meetings”
What is Unanimous Written Consent?
Unanimous Written Consent is a procedurewhere a HOA Board, without conducting aBoard Meeting, may approve of action items solong as all Board Members sign a writtenconsent (E-mail signatures are allowed).
Unanimous written consent is based on aprovision of the Arizona Non ProfitCorporations Act (A.R.S. §10-3821) or the HOABylaws.
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Common Uses of Unanimous Written Consent
The HOA desires to engage an attorneyto obtain advice, file or defend alawsuit.
This decision may be madeoutside of an open Board Meetingvia e-mail pursuant to A.R.S. §33-1804(A) and A.R.S. §33-1248(A).
Common Uses of Unanimous Written Consent
The HOA has to respond to anemergency situation.
This decision may be madeoutside of an open Board Meetingvia e-mail pursuant to A.R.S. §33-1804(D)(2) and A.R.S. §33-1248(D)(2).
Common Uses of Unanimous Written Consent
The HOA desires to make a decisionregarding an individual owner’sdelinquent account or violation status.
This decision may be made outsideof an open Board Meeting via e-mail pursuant to A.R.S. §33-1804(A) and A.R.S. §33-1248(A).
shaw & lines, llC, focuses its practice to General real estate law and Community Association law. The firm represents Community Associations, developers of Community Associations, developers of Professional office Condominiums, Professional office Condominium Associations and Timeshare Associations.
The firm was founded and continues to operate on the goal of promising and providing efficient, competent and quality legal services to its clients. shaw & lines, llC, distinguishes itself by efficiently and effectively “doing better what is already being done.” shaw & lines, Arizona’s Counselors to Community Associations.
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Common Uses of Unanimous Written Consent
The HOA desires to make a decisionregarding spending funds (non-emergency).
Unanimous Written Consent may beused but waiting for an open BoardMeeting is preferable.
When Should Unanimous Written Consent Be Used?
When it is nearly impossible for theBoard to meet (i.e. Board is gonefor the summer months).
If a Board meets quarterly and anon-emergency issue arises.
Best PracticesUnanimous Written Consent
Make sure the writing or e-mail clearlystates the action authorized.
Ratify the decision at the next open Boardmeeting.
All documents regarding UnanimousWritten Consent are records of theAssociation and should be saved.
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What’s the Issue with E-mail?
A.R.S. 33-1804(D)(4) (Planned Communities) and A.R.S.33-1248(D)(4) (Condominiums) states:
Any quorum of the board of directors that meets informallyto discuss association business, including workshops, shallcomply with the open meeting and notice provisions of thissection without regard to whether the board votes or takesany action on any matter at that informal meeting.
The fundamental phrase of the statute is “todiscuss association business.”
E-mail as Records of the Association
An argument may be asserted that since e-mail is notlisted under the standard records required to be keptunder A.R.S. 10-11601(Non-Profit Corporations Act)and since A.R.S. 33-1805 and A.R.S. 33-1258 doesnot define e-mail as a record, e-mails are not recordsof the Association.
An argument may also be asserted that any e-mailwhere Association business is discussed may beconsidered a record of the Association because it is awritten statement.
E-mail Use Best Practices
Be very careful what you write in an e-mail.
Have to-the-point “RE” Lines.
Save all e-mails – Who Owns the E-mail.
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E-mail Use Best Practices
Try to discourage e-mail “debates” or“discussions.”
Create a HOA specific e-mail addressfor Board Members - Board Membersshould not use personal or work e-mailaddresses for Association business.
E-mail Use Best Practices
If you make a decision via e-mail, ratifythe decision at the next Board Meeting.
Know when an e-mail is confidential –executive session. Keep a separate filefor confidential – executive session e-mails.
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Phone/Fax/Web p 480-456-1500 f 480-456-1515 www.shawlines.com
The Misnomer of Unanimous Written Consent
By Augustus H. Shaw IV, Esq., CCAL
Increasingly, many homeowners associations (HOAs) and their Boards of Directors are using a
method of effectuating HOA business without a Board meeting called unanimous written consent. While the
use of unanimous written consent was fully appropriate a few years ago, recent statutory changes makes the
use of unanimous written consent problematic. This article is designed to explain what unanimous written
consent is and how it should properly be used.
In simple terms, unanimous written consent is a procedure where a HOA Board, without conducting a
Board Meeting, may approve of action items so long as all Board Members sign a written consent (A.R.S.
§10-3821(E) allows for electronic and e-mail signature). Unanimous written consent is based on a provision
of the Arizona Non Profit Corporations Act (A.R.S. §10-3821) which states:
Unless the articles of incorporation or bylaws provide otherwise, action required or permitted by chapters 24 through 40 of this title to be taken at a directors' meeting may be taken without a meeting if the action is taken by all of the directors. The action must be evidenced by one or more written consents describing the action taken, signed by each director and included in the minutes filed with the corporate records reflecting the action taken.
Unanimous written consent is often used to obtain Board approval via e-mail regarding urgent or
confidential matters. The interesting note in said usage is that unanimous written consent is rarely, if ever,
needed in the HOA setting. This is because the common reasons to use unanimous written consent may be
effectuated without actually using unanimous written consent. Some common examples of this are:
1. The HOA desires to engage an attorney to obtain advice or file a lawsuit.
This decision may be made via e-mail pursuant to A.R.S. §33-1804(A)
and A.R.S. §33-1248(A). Unanimous written consent is not needed.
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2. The HOA has to respond to an emergency situation. This decision may be
made via e-mail pursuant to A.R.S. §33-1804(D)(2) and A.R.S. §33-
1248(D)(2). Unanimous written consent is not needed.
3. The HOA desires to make a decision regarding an individual owner’s
delinquent account or violation status. This decision may be made via e-
mail pursuant to A.R.S. §33-1804(A) and A.R.S. §33-1248(A) and
unanimous written consent is not needed.
The use of unanimous written consent has become increasingly problematic due to recent changes in
Arizona law and policy. This may be seen in a recent change to the meetings statutes, as may be found in
A.R.S. §33-1804(E) and A.R.S. §33-1248(E), which states, in part:
It is the policy of this state as reflected in this section that all meetings of a planned community (or condominium), whether meetings of the members' association or meetings of the board of directors of the association, be conducted openly and that notices and agendas be provided for those meetings that contain the information that is reasonably necessary to inform the members of the matters to be discussed or decided and to ensure that members have the ability to speak after discussion of agenda items, but before a vote of the board of directors is taken.
In this current extremely litigious HOA climate, HOAs should shy away from using unanimous
written consent and instead take advantage of the exceptions in the open meeting requirements found in
A.R.S. §33-1804(A), A.R.S. §33-1248(A), A.R.S. §33-1804(D)(2) and A.R.S. §33-1248(D)(2). While
unanimous written consent is still technically able to be used, HOAs should use it only as an absolute last
resort.
Augustus H. Shaw IV, Esq., CCAL is the Founding Partner of Shaw & Lines, LLC. A lecturer for many municipal HOA Academies and continuing legal education seminars, Augustus is a member of the prestigious CAI College of Community Association Lawyers and sits on the CAI Central Arizona Chapter Board of Directors and Legislative Action Committee.
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Augustus H. Shaw IV, Esq., CCAL Member CAI-CAC Board of Directors Member, College of Community Association Lawyers [email protected]
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