Condo talk: Emergency decision making of a board

From time to time the board of a condominium or common interest community association may find it necessary to make decisions and take action outside of a duly noticed board meeting, due to what is perceived as an “emergency.”

The Condominium Property Act and Common Interest Community Association Act govern the forum in which decisions of the board are to be made. These laws require decisions of the board, or portions thereof, be open to all owners at meetings called with at least 48 hours prior notice. This would include any vote on matters discussed in meetings or portions of meetings permitted by law to be “closed” to owners (executive session).

However, neither Act provides for “emergency” board meetings called on less than 48 hours notice, or for informal board decisions (emergency or otherwise) to be made outside of duly called and held board meetings.

That said, a custom and practice has developed in the industry that may excuse strict compliance with the 48 hour notice requirement for a board meeting under “emergency” or “exigent circumstances.” In its strictest sense, an “emergency” or “exigent circumstance” would be a situation requiring swift action when there is an immediate danger to the structural integrity of the association property or to the life, health, safety or property of the unit owners. A more liberal standard would permit emergency board meetings when there is a demand or need calling for immediate action or remedy that would justify holding a board meeting on less than 48 hours notice.

In determining exigency, the board should consider the degree of urgency involved. That is, why must a decision be made in less than 48 hours, and what is the impact of waiting until a duly called board meeting can be held to make a decision? Nonetheless, there is no standard for determining whether such circumstances exist, and in each case the extraordinary situation must be measured by the facts known by the board at the time.

If the board meets on less than 48 hours notice, notice should nonetheless be issued and posted, and owners should be permitted to attend the meeting (unless the meeting is held for one of the purposes for which meetings may be “closed” to the owners). The decision of the board made at such an emergency meeting must be ratified at the next duly called and held board meeting.

Related to this is the issue of a board making informal decisions outside of a board meeting, when board members cannot meet in person; that is, a decision made by phone or email. The same guidelines would control as to when such a procedure could be utilized, as is described above for emergency board meetings.

The informal decision of the board made without a meeting must be ratified at the next duly called and held board meeting.

When the board makes a decision at an emergency board meeting or outside of a board meeting, the board should be confident its decision will be ratified at the next board meeting. I have seen board members change their mind between an informal vote and the vote to ratify at a board meeting. If board members take action on behalf of the association without proper authority, because the action is not ratified by the board, those board members taking the action are exposed to some risk of being personally liable for their actions.

The procedures I have discussed here should be used carefully and for the limited purposes stated above, and not routinely or as a substitute for duly called and held board meetings. I strongly suggest using these approaches as a very last resort and only in a true emergency.

Nonetheless, there may be exigent circumstances where emergency meetings must be held on less than the required notice or where a decision must be made without a meeting at all. It is important for decisions of the board made under these circumstances to be properly ratified at a duly called and held board meeting.

The board always needs to be mindful of the political ramifications of holding meetings, even in an emergency, on less than 48 hours notice and of making decisions outside of a board meeting, as it is easy for owners to mischaracterize such activity as nefarious.

Ÿ David M. Bendoff is an attorney with Kovitz Shifrin Nesbit in Buffalo Grove. Send questions for the column to him at CondoTalk@ksnlaw.com. The firm provides legal service to condominium, townhouse, homeowner associations and housing cooperatives. This column is not a substitute for consultation with legal counsel.