Update on Legislation Affecting Community Associations: Board Actions without Meeting

On March 3, 2008, the Colorado General Assembly sent this legislative session’s first piece of legislation impacting Colorado community associations to Governor Ritter for signing. Upon enactment, House Bill 08-1089 will amend the Colorado Revised Nonprofit Corporation Act to provide new default procedures for board actions taken without meetings. The new legislation aims to facilitate board actions between meetings and addresses the issue of board members who cannot or do not vote on proposed matters within the necessary time period for board action. House Bill 08-1089 will not take effect until August 6, 2008, at the earliest, and remains subject to the possibility of veto or voter referendum.

On its effective date, House Bill 08-1089 will revise Section 7-128-202, Colorado Revised Statutes, to state:

(1) Unless otherwise provided in the bylaws, any action required or permitted by articles 121 to 137 of this title to be taken at a board of directors’ meeting may be taken without a meeting if a notice stating the action to be taken and the time by which a director must respond is transmitted in writing to each member of the board and each member of the board, by the time stated in the notice:

(a) Votes in writing for such action; or

(b)        (I) Votes in writing against such action, abstains in writing from voting, or fails to respond or vote; and

            (II) Fails to demand that action not be taken without a meeting.

In contrast to the old statutory procedures for board action without meeting, which require a response from every member of the board, the new default procedures will allow for a response deadline. If a board member does not respond by the set deadline, then the board may tally the votes cast without waiting for the non-responsive member to vote. This section of the statute does not expressly address quorum requirements, so quorum requirements will continue to apply to board actions. Additionally, the new procedures do not discuss reasonable time periods for board consideration of a proposed action.

Community associations functioning as nonprofit corporations may utilize the new procedures for actions taken without meeting, unless the associations’ bylaws provide different procedures. In other words, the new statutory language will not change the procedures for associations with bylaws that already specify the requirements for board actions without meetings. Many associations’ bylaws contain procedures that track the old statutory language or state different procedures for board action without meeting; those associations will not directly benefit from this new legislation without first amending their bylaws. 

If your association bylaws contain more cumbersome procedures for board action without meeting, and you desire to amend those procedures to benefit from the new statutory language, please contact our office to discuss the steps for amending the bylaws and to obtain a quote for the legal fees to amend the bylaws.

Stay tuned for future updates on legislation impacting community associations’ notice and hearing procedures, dispute resolution, and restrictions on energy efficiency measures.