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Residential Real Estate
Oct 28, 2021

How To Hold A Productive Annual Meeting

Sponsored Content provided by Mike Stonestreet - Founder, CAMS (Community Association Management Services)

The annual meeting is one of the most significant events held by community associations as it's when elections are conducted, the budget for the upcoming year is presented to members, and important association-related business is discussed. Required by governing documents and state nonprofit acts, these meetings must be carefully planned to be efficient and successful. We at CAMS have dived the purposes of and requirements for annual meetings and come up with some best practices that, with the expert guidance of your community manager, your board can employ at your next annual meeting to ensure it's a success.

What is the Annual Meeting?
Though the term "annual meeting" may seem to have a simple definition – and in some ways it does, it's a yearly meeting after all – there's more to it than having the board and community members get together every year. Annual meetings are usually required by the association's governing documents and can serve several purposes: board member elections, voting on special assessments, review of the budget for the upcoming year, and providing a forum to discuss other pertinent issues.

Requirements in Governing Documents & State Statutes
Most of the provisions surrounding your association's annual meeting can be found in your governing documents – the declaration, bylaws, and sometimes the articles of incorporation. Often the bylaws contain information on quorum requirements (though it may be found in the declaration). The bylaws typically contain additional meeting stipulations such as where the meeting must be held, when and how notice must be given, and some even dictate when the meeting must be held. Both the North and South Carolina Nonprofit Corporation Acts discuss meeting requirements but defer to the authority of the governing documents. However, if your association's governing documents do not address certain aspects of the meeting, there are guidelines within the nonprofit corporation acts that must be followed. These can be found in SC Code of Laws Title 33, Article 7 and NCGS 55-7-01

Proper Notice
How do you notify the membership about the annual meeting? Again, specific requirements will likely be found in your governing documents, but overall, you want to be sure that you provide members plenty of time to plan to attend and send reminders before the meeting.

What must be included in the meeting notice? The annual meeting packet should contain the notice of the meeting's time, date, and location, a proxy form and a ballot if the vote is being held via written ballot prior to the meeting. In addition, the notice packet may contain minutes of the last annual meeting and copies of any additional topics that will be discussed at the meeting (budgets, financial statements, reports, etc.).

There is usually a requirement in the governing documents of when to send the notice.  It may state, "not less than ten nor more than 60 days" prior to the meeting; however, the more notice that is given, the better the attendance.  As far as how to send the notice, many governing documents state it has to be mailed. However, some newer associations do allow for electronic notices in their governing documents. And, with the changes brought on by the Covid-19 pandemic, some states (NC is one) have passed legislation to allow for electronic notices, meetings, and voting. The key here is never to assume – be sure you know what your governing documents say, or you run the risk of low attendance (and no quorum) or the meeting being considered invalid because proper notice wasn't given.

Reaching a Quorum
Simply put, a quorum is the minimum number of members that must be present to hold the annual meeting (though there are occasions where governing documents may be silent on this). Where is this number found? Typically, it is found in the bylaws in the form of a percentage of the total membership. Achieving a quorum at your annual meeting is essential as it's required for the meeting to be considered valid.  

If you're worried about achieving a quorum at your annual meeting, there are a few things you can do to try to boost attendance. First, be sure you send out plenty of reminders via email, your community website if you have one, and post notices in the common areas. Another great way to improve attendance is to provide electronic options for members to participate (e.g., Zoom). If you're considering electronic attendance options, ensure that your governing documents and state statutes allow for such.

Try as you may, the date and time of the meeting aren't going to work for everyone. In these instances, the use of proxies is a great help. What is a proxy? It's one member allowing another member (the proxy holder) to vote on their behalf. Proxies aid in establishing a quorum when members can't be present at the meeting.  

If you're unable to reach a quorum, the best thing to do is reschedule. If you carry out the meeting sans quorum, the business conducted in the meeting will be considered invalid, and your board could even face some legal issues if you proceed without one.

The Meeting Agenda
Most people don't like to sit in meetings that drag on for hours, and chances are you don't either. So how do you avoid this? First, stick to an agenda and follow parliamentary procedure! Then, much as you do at your board meetings, you'll need to call the annual meeting to order, briefly explain the goals and purpose of the meeting, and begin going through the agenda.

Though topics discussed at the annual meeting can vary, some frequently seen agenda items are consideration of the annual budget, the election of board members, any special assessments being considered, a review of the association's financial status, upcoming repairs, and anything else essential for the membership to know.

To keep the meeting flowing, announce each agenda item and explain what it means and why it needs to be discussed. If introducing reports, do so formally. Clearly state any motions that have been made, and the results of the vote. If you've brought in experts to speak at the meeting (attorneys, reserve specialists, etc.), be sure to formally introduce them and explain the purpose of their attendance.

Further, try your best to keep control of the meeting – keep the members focused on the agenda and don't allow side conversations or people talking over one another.  There may be some hot topics discussed at these meetings, so come prepared to keep your cool. Maintaining control of the meeting will keep it short and show the community that you and your fellow board members are united and more than capable of handling community business.

As we said earlier, voting can be conducted in a few different ways, and this is usually explained in your governing documents. Often members attend the meeting and vote in person. But many people can't attend in person. So, how do they vote?

  • Proxies: A member can sign a proxy form to allow another member to vote on their behalf in their absence
  • Mail-in voting: Some associations allow for mail-in voting. Be careful here, though – if your association falls into this category, you want to ensure that each unit records one vote.
  • Electronic Voting: Though this certainly doesn't apply to all associations, it is becoming more common. North Carolina recently passed a bill allowing electronic voting. Electronic voting options bring up a new set of requirements and things to look out for – be sure you're intimately familiar with these before deciding to allow this option in your community.
Tips and Best Practices
Following the requirements in your governing documents and all applicable state statutes is, of course, the top best practice. Still, there are some other things you and your board can do to make the meeting a more enjoyable experience for the membership.
  • Inviting guest speakers may make the meeting more engaging and help members understand the association's specific needs. For instance, if you're facing a large capital repair that will require a special assessment, invite a reserve specialist or engineer to explain the problem and necessary repairs to the membership. Doing this may aid in achieving the vote needed to proceed with the special assessment.
  • Take the time to talk about some good things happening in the community. For example, did you recently start holding a weekly social hour that everyone is enjoying? Or did you recently have a new pool installed that everyone enjoyed all summer? If some community volunteers have put a lot of time and effort into making the neighborhood a better place, give them a shout-out. Mentioning some good things that have happened in the community will put members in a better mood when it comes time to discuss the less-fun things like budgets and assessments.
  • Allow time for a Q&A session after the official meeting adjourns. You, of course, want to stick to the agenda and address necessary business during the meeting. But, once the meeting is adjourned, giving the members a chance to make comments and ask questions will show that you value their opinions and understand their concerns.
Though preparing for and running an annual meeting requires a lot of preparation and hard work, the good news is that your community manager can assist you with the majority of this.

Is your community receiving the trusted guidance it deserves? Reach out to CAMS at 888.798.2624 or on our website to learn more about how we can help prepare your community for its next annual meeting.
Mike Stonestreet, CMCA, PCAM, AMS, is Founder/Co-Owner of CAMS (Community Association Management Services). CAMS began in 1991 with Stonestreet and a few employees in a small office in Wilmington but has since grown to over 300 employees serving eight regions across North and South Carolina.

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