Condo talk: Use of committees and commissions-part 2

Last week, I discussed committees, and how they are established by the board of an association. Today, I will address the specific authority of committees and commissions, how to establish commissions, and what an association can do to revise its governing documents if they do not authorize committees.

Each committee, to the extent specified by the board, in the articles of incorporation, or bylaws, can exercise the authority of the board regarding management of the affairs of the association. That is, action taken by the requisite majority of a committee is as effective as action taken by the board itself!

Actions of a committee should be memorialized by written resolution. Although not necessary, the board can ratify, by appropriate resolution, the acts of a committee. If for no other reason, ratification provides a record of the approval or disapproval by individual members of the board to a committee’s actions.

There are limitations upon the authority of a committee. For example, a committee may not:

Ÿ Approve or recommend to members any acts that the law requires be approved by members of the association, except that committees relating to the election, nomination, qualification or credentials of directors or other committees involved in the process of electing directors may make recommendations to the members relating to electing directors;

Ÿ Fill vacancies on the board or on any of its committees;

Ÿ Elect, appoint or remove any officer or director or member of any committee;

Ÿ Adopt, amend or repeal the bylaws or the articles of incorporation;

Ÿ Authorize the sale, lease, exchange or mortgage of all or substantially all of the property or assets of the corporation; or

Ÿ Amend, alter, repeal or take action inconsistent with any resolution or action of the board when the resolution or action of the board provides by its terms that it shall not be amended, altered or repealed by action of a committee.

Committees can potentially wield a tremendous amount of power and responsibility, thereby exposing their members to potential liability. To manage that risk, the association’s insurance agent should be consulted with respect to liability coverage to be provided to members of the committees.

Not all associations governing documents provide for the creation of committees. The association can consider amending its governing documents to permit committees. An association’s articles of incorporation or bylaws can generally be amended to provide for the appointment of committees. Articles of incorporation can be amended by the affirmative vote of the members having not less than twothirds of the votes, or the minimum specified in the articles of incorporation or bylaws. Both the association’s articles of incorporation and bylaws should be reviewed with counsel to determine the amendment procedure.

Even if the association’s governing documents do not provide for the appointment of committees, the board can still delegate to a lesser extent by use of commissions. While a committee can make decisions binding on the association, a commission may not act on behalf of the association or bind it to any action.

The board can create and appoint persons to a commission, advisory body or such other body. None of the appointees to commissions have to be members of the board. So, a commission can be composed entirely on non-board members.

A commission can make recommendations to the board. However, only the board can take action with respect to recommendations made by a commission. In this regard, a commission is essentially an information gathering body, providing the board with data it will consider in making a decision. Commissions are often used, for example, to conduct searches for property managers, vendors like landscapers and roofers, and to prepare suggested rules.

Meetings and action of commissions can generally be conducted and performed on an informal basis. Unlike committees, since commissions do not conduct board business, meetings of commissions are not subject to notice requirements, even if the commission includes a quorum of the members of the board of a condominium association.

The use of committees and commissions may enhance an association’s operations, and permit the board to leverage its time. Successful participation on a committee or commission by a non-board member can be a springboard to election to the board. The association’s articles of incorporation and bylaws must be reviewed to determine if committees may be established. If the documents do not provide for the appointment of committees, the board may consider an amendment to the documents to permit committees or, in the alternative, the board could consider the appointment of commissions.

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.