Gary Daddario, Winer & Bennett, LLP

In late June, New Hampshire governor Margaret Hassan signed into law an amendment to the New Hampshire Condominium Act (RSA 356-B) is effective on August 1. Associations around the state will need to address these amendments and undertake necessary actions in order to be in compliance with the law going forward. Associations may need to amend bylaws and will need to adapt their procedures and operations in order to comply. Below is a review of some but not all of the amendments that will impact New Hampshire condominium associations.

Governing Board The first section of RSA 356-B impacted by the new law is Section 35. In fact, the new law repeals Section 35 and reenacts it with the new language. Noteworthy changes include the fact that associations are now required to elect a governing board. The prior version allowed election of a governing board as an option. In addition, the new law explicitly states that those serving on the governing board shall have a fiduciary relationship to the association. The new law also requires that association bylaws provide for the following: 1) election of officers to the board; 2) qualifications, manner of election and removal, powers and duties, and terms of board membership; 3) officers to execute and record amendments to the declaration; 4) method of amendment of the bylaws; 5) that the association act on behalf of each unit in condemnation proceedings; 6) provisions necessary to satisfy the Act’s requirements on meetings, voting, quorums and other association activities; and 7) provisions necessary to comply with other applicable laws of New Hampshire required in bylaws of similar organizations. Some associations may need to amend their bylaws to insert necessary provisions.

The new Section 35 also contains permissive measures. Association bylaws may require: 1) employees of managing agents or condominiums complete a background check; and 2) provisions governing any other necessary or appropriate matters, including adoption of rules.

Annual, Special Meetings and Open Meetings Next Sections 37-40 of RSA 356-B are repealed and reenacted according to the new language provided. Language presented includes the requirement of at least an annual meeting, as well as the requirements and appropriate notice for both annual and special meetings. Notice may now be served by mail or electronic mail. In fact, meetings may be held by telephonic, video or other conferencing processes. Except as otherwise provided in the bylaws, meetings shall be conducted in accord with the latest version of Roberts’ Rules of Order. Associations must now, at least quarterly, hold open meetings at which unit owners may speak regarding association issues. Materials provided to the board in advance of meetings must be made available to unit owners. Executive sessions are limited only to regular or special meetings of the association and may not include the taking of a final vote or an action by the board. Executive sessions may only be called for purposes enumerated in the new Section 37-d of the Act.

Quorums and Voting When it comes to quorums, associations of fewer than 25 units may now require a larger percentage than that requires by the Act (one third) in their bylaws. If a quorum is not reached at an annual meeting, the same must be rescheduled within sixty days, with both notices and proxies to issue.

Changes have been made with respect to voting as well. Where more than one owner of an individual unit is present at a meeting, the vote associated with the unit may now be cast by agreement of the majority of interest (as opposed to unanimous agreement) of the owners present. A single person may not cast undirected proxies representing more than ten percent of the entire voting interest of the association. On a “post-developer” basis, if a single person acquires more than fifty percent of the entire voting interest of the association, then a 2/3 majority is necessary to amend bylaws, budgets or contracted property management. Unless prohibited by the association’s governing documents, associations may now conduct a vote in the absence of a meeting pursuant to the requirements set forth in the new Section 39-a.

Board Authority The new Section 40 contains explicit restrictions on the exercise of authority of the board. It also mandates that the board act on behalf of the association. The declarant’s board must act with the degree of care and loyalty required of a trustee. Board members appointed other than by the declarant must act with the degree of care and loyalty of an officer or director of a corporation. Similarly, board members will be subject to the conflict of interest rules of corporate directors and officers. The new Section 40 also includes a list of actions which members of the board are prohibited from taking. While this section prohibits board members from financially benefiting from service on the board, this prohibition may be waived by a 2/3 majority vote at a properly called meeting of the association.

As mentioned at the outset, the amended version of RSA 356-B will result in numerous changes in addition to the ones addressed here. CAINE will host a webinar on September 14 and programs on October 22 and November 3 to address the amendments.

Visit www.caine.org for more information and to register.

Gary Daddario, Esq, CCAL, is partner at Winer & Bennett, LLP, Nashua, NH