Fri, Nov 8, 2024 at 5:03 PM
Good afternoon, Providence Board of Directors,
Over the past week, members of the Providence Board have reached out to Chaparral and have requested a meeting. While trying to schedule a meeting to discuss the recent events and operations of the Board, some alarming matters have been brought to our attention. Many events occurred while not being compliant with the Association’s Governing Documents as well as Texas Property Code.
Please review the following events that occurred:
1. The meeting of November 1, 2024, did not constitute a valid meeting of Providence Community
Association, Inc.’s board of directors at which Association business could be conducted.
A: The meeting of November 1, 2024, was not properly noticed to the Association’s homeowners.
Section 209.0051(c) of the Texas Property Code requires that all regular and special property owners’ association board meetings be open to owners. (During the course of an open meeting, property owners’ association boards have the right to adjourn such meetings into executive session to discuss certain confidential items.) Texas Property Code Section 209.0051(e) requires that “members shall be given notice of the date, hour, place, and general subject matter of a regular or special board meeting, including a general description of any matter to be brought up for deliberation in executive session.” The Texas Property Code mandates specific methods by which property owners’ associations may provide this notice and a timeline for providing notice.
Providence Community Association, Inc., did not provide the Association’s homeowners notice of the November 1, 2024, meeting. Therefore, this meeting did not constitute a valid meeting of the Association’s board of directors at which business could be conducted. No decisions made at the November 1, 2024, are effective.
B: A quorum of directors was not present at the November 1, 2024, meeting.
Article VI, Section 3 of the By-Laws of Providence Community Association, Inc., requires a quorum of “a majority of the number of directors” for meetings of the Association’s board of directors. If a quorum is achieved, then a simple majority of that quorum is required to act for the Association. (“Every act or decision done or made by a majority of the
directors present at a duly held meeting at which a quorum is present shall be regarded as the act of the Board.”)
As of November 1, 2024, the Association’s board of directors consisted of four directors. Three directors constitute a majority of a four-director board. Therefore, to achieve quorum at a November 1, 2024, meeting of the Association’s board of directors, at least three directors must have been present.
It is our understanding, only two directors attended the November 1, 2024, meeting of the Association’s board of directors. Therefore, a quorum of directors was not achieved, and a meeting could not properly be held. Because a quorum was not achieved, no business could be conducted at the November 1, 2024, meeting.
2. The November 1, 2024, meeting did not effectively appoint Association officers or fill the vacancy created by Paul Weider’s resignation.
Section 209.0051(h) of the Texas Property Code requires fifteen specific areas of property owners’ association business be conducted only in open and properly noticed board meetings. Section 209.0051(h)(13) of the Texas Property Code requires that any vacancy on a property owners’ association board of directors be filled only in an open and properly-noticed meeting of the board of directors. Similarly, Section 209.0051(h)(15) of the Texas Property Code requires that property owners’ association officers be elected only in an open and properly-noticed meeting of the board of directors.
Providence Community Association, Inc., is permitted to elect officers and fill director vacancies only in open and properly-noticed board meetings. The Association did not properly notice the November 1, 2024, meeting. Moreover, a quorum of directors was not present at the November 1, 2024, meeting. As a result, no board meeting was actually held on November 1, 2024. Therefore, the November 1, 2024, meeting could not elect officers or fill vacancies on the Association’s board of directors.
3. The November 1, 2024 meeting did not effectively declare Nadeem Naik’s board seat vacant.
The Texas Property Code allows property owners’ associations to conduct some association business outside of open and properly-noticed board meetings. However, the Property Code imposes strict notice and participation requirements for conducting such business. As noted above, Section 209.0051(h) prohibits conducting certain specific types of business outside of an open and properly-noticed meeting. Section 209.0051(h) of the Texas Property Code allows a property owners’ association board of directors to conduct all other areas of Association business outside of open and properly noticed meetings. However, a board may take action outside of a meeting on those permitted areas of association business only “if each board member is given a reasonable opportunity to express the board member’s opinion to all other board members and to vote.”
Providence Community Association, Inc., did not afford Director Naik or Director Blakeman a reasonable opportunity to express their opinion at the November 1, 2024, meeting, as to the decision to declare Naik’s seat as vacated by reason of absence. Further, the Association did not allow Director Naik or Director Blakeman the opportunity to vote on whether to declare Director Naik’s seat vacant due to absence. Therefore, Providence Community Association, Inc., did not satisfy the requirements for conducting business outside of an open and properly noticed meeting. As a result, the vote to declare Director Naik’s seat vacant is not effective.
4. Providence Community Association, Inc.’s board of directors cannot remove directors from the board,
and the vote to remove Blakeman is therefore ineffective.
The By-Laws of Providence Community Association, Inc., outline how sitting directors may be removed from the board. (I address the issue of declaring a vacancy in the board, above.) Article IV, Section 3 of the Bylaws states that “any director may be removed from the Board, with or without cause, by a majority vote of the members of the Association.” This is the only method for removing directors, for reasons except absence, outlined in the Association’s governing documents.
Providence Community Association, Inc.’s board of directors does not have the authority to remove a director from the board of directors. The Association’s board can, in some circumstances, declare a seat vacant. Otherwise, only the Association’s homeowners have the right to remove a director from the board of directors. Therefore, the vote to remove Director Blakeman from the board of directors is not effective.
Please note, the provisions for removing officers outlined in Article VIII, Section 5 of the Bylaws, do not apply to removing directors. Article VIII addresses Association officers; it is Article IV of the Bylaws that governs directors. Article VIII, Section 5 of the Bylaws governs the board of removing “any officer” from the board, whereas Article IV, Section 3 governs removing directors. Officers are those offices to which the board elects directors: president, vice president, and secretary. Removing a director from their officer position does not remove that director from the board. That power is not available to the Association’s board of directors.
In conclusion, the board of directors for Providence Community Association, Inc., currently consists of directors Director Jones, Director Ates, Director Naik, and Director Blakeman. A purported board consisting of Jones, Ates, and Muerer cannot conduct business or make decisions on the Association’s behalf. Jones and Ates are two of the four directors currently serving on the board. Muerer is not a director at all. Providence Community Association, Inc., cannot act except through its validly constituted board of directors (i.e., Jones, Ates, Naik, and Blakeman). Any Association acts approved or decided without the lawful and proper participation/opportunity to participate of the directors are invalid and could potentially expose Providence Community Association, Inc., to liability.
So long as Director Naik and Director Blakeman remain on the Association’s board of directors, any acts Jones and Ates take unilaterally without the input or involvement of Director Naik and Director Blakeman are ultra vires acts and Jones and Ates are likely not shielded from personal liability for the results of such acts. To the extent Naik and Blakeman are excluded from Providence Community Association, Inc.’s board, these directors may have personal causes of action against the Association. However, as this management company does not represent any director in their individual capacity, we cannot further address these issues of personal liability or potential causes of action.
In closing, it would be prudent of the board to come together and work in harmony for the betterment of the Association.
Should the Board still wish to have a meeting with Valerie Overbeck and myself, we would be happy to meet with you at our office, located at 6630 Cypresswood Dr., Spring, TX 77379. This would be the legally installed board of Willie Jones, Nadim Naik, Karen Blakeman, and Michael Ates. We will need at least the confirmation from the majority of the board of their attendance.
Lindsey Hall-Wikenczy, CMCA, AMS
Director of Community Management
Chaparral Management Company | 6630 Cypresswood Dr, Suite 100 | Spring, TX 77379 Tel: (281) 537-0957
Web: www.chaparralmanagement.com