Annual Meeting Notice: How to Strike the Right Balance

Sometimes the notice that’s sent to co-op shareholders and condo unit-owners to announce the annual meeting contains too much information, leading to pushback from residents. And sometimes the notice contains so little information that it fails to draw a quorum. How can boards strike the right balance? 

Not Enough Information

Greg Finger, the vice president and director of property management at Finger Management, handles a 90-unit condominium that needed funding for a major capital project. The board’s options were to increase common charges significantly or take out a loan. Since the loan would require the approval of a majority of unit-owners, the board sent out a notice for the annual meeting stating that unit-owners would be voting not only on board vacancies but also on whether to approve or reject the loan.

Mention of a major loan is usually enough to draw a standing room only crowd to the annual meeting. Not this time. What happened?

“The initial notice that went out did notify unit-owners that they would be voting on a loan approval,” Finger says, “but unfortunately that wasn’t enough information to entice everybody to come out. I think it didn’t occur to the unit-owners that approving the loan meant they were going to have to pay more money. So we did not have a quorum, and we had to reschedule the annual meeting.”

Do some boards err on the side of caution — afraid that giving too much information about details of a loan might give residents the opportunity to organize a protest?

“I’d say there’s always a possibility of that happening,” Finger says, “and sometimes that may drive a board to be a little reluctant to give too much information. But if you need a majority of the shareholders or unit-owners to vote to approve a loan, you need to have them there. So you might as well give all the information, let everybody know what’s on the table and have everybody there to vote.”

Back to the Drawing Board

It was time to rewrite the notice. “We drew up a new notice to advise everybody again of the purpose of the meeting,” Finger says. “But this time we gave a little bit more information on how extensive the common charge increase would be if we weren’t able to get this loan approved. And then we added a bit more detail on the reasoning for the loan and what it was going to fund.”

More information turned out to be more effective. The meeting drew a quorum, and the loan was approved. In hindsight, Finger says he thinks holding an informational meeting prior to such an annual meeting might be a good idea.

Information, Please

“The board could use this informational session to explain the reasoning for the loan,” Finger says. “And you could run that session on Zoom two or three weeks before the annual meeting. Zoom is a good platform to get a good turnout.”

For the annual meeting, though, Finger says he prefers to have residents show up in person. “I think there’s a lot more interaction,” he says, “especially when you talk about a building like this size. If you put 90 unit-owners onto a Zoom meeting, even with the hand-raising function, it still can be a little hysterical. So I think the annual meeting is a good place to have an in-person meeting.”

Finger says he believes that this condo board’s experience carries a valuable lesson about composing notices for annual meetings. “Be detailed,” he says. “If you’re making a decision that affects every one of your unit-owners or shareholders, explain the importance of attending, and explain the benefit of them being there. You might as well give all the information and let everybody know what’s on the table. That way you’ll have everybody there to cast their vote.”