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BruceS8 (California)
Posts: 11
Posted:
Our HOA has been trying to pass a special assessment for over 2 years now. Originally, in 2016 the vote was two fold: a bank loan and to pay back the bank loan. The HOA originally stated that both measures past, then a month later they stated that they failed to make quorum to obtain the bank loan because they need 2/3rds of the homeowners to approve the bank loan per the CC&R's. Well they started this process in July of 2017 again and have failed to make quorum. The board has stated that they can not count the ballots until they make quorum. This makes no sense because how will they know if they have quorum unless they count the ballots. Every board meeting since they sent out the new ballots in July 2017 the board has stated that they have not met quorum and they continue the election. Our by-laws state that if no quorum is met that the community members present at the meeting can vote to adjourn. My concern is that at no meeting has the inspector of election ever been present and no vote to adjourn the election by the membership to a later date has occurred. It just appears that the board is continuing the election until they meet quorum. Is this allowed?
RichardP13 (California)
Posts: 3,868
Posted:
No..

The members present either in person or by proxy are the only ones to adjourn a meeting to a later date, not the Board. The question is, who is receiving the ballots.

The provisions to pass a special assessment will be in your CCRs. Generally quorum is a majority or 51% and the passage is a majority of voting power. For instance a complex of 200, quorum would be 102 and passage would be 101 yes votes.
BruceS8 (California)
Posts: 11
Posted:
No idea. The board in our community has never stated in a board meeting who the inspectors of the election are or how they are selected. We do have a set of election rules that state the board chooses the inspectors and the criteria for who can be an inspector.
RichardP13 (California)
Posts: 3,868
Posted:
If you have a management company and election rules it is a good possibility that the MC is the inspector.
BruceS8 (California)
Posts: 11
Posted:
But is not the board supposed to inform the homeowners who the inspectors are before the election took place?
SheliaH (Indiana)
Posts: 6,964
Posted:
Reread your CCRs - do they require a special meeting where 2/3rds of the homeowners have to show up in order to vote on the special assessment? That first part is important because you may not need a special meeting to take a vote, although I would encourage it - people can discuss the issues, get their questions answered and then the board can schedule another meeting for a formal vote OR have everyone submit ballots by a certain time - at the next special meeting, they would be counted by non-board member (a few people from the community could do this) and if you don't have a 2/3rds majority voting in favor, the idea dies once and for all.

When our community voted to shut down our pool for good, we needed 75% of the homeowners to agree, but that didn't require a formal meeting - we sent out the ballots and people signed and returned them. We didn't have a formal meeting to take a vote to decide on the pool because our bylaws didn't require this. If however, a certain percentage of homeowners presented a petition to hold a special meeting (as required by our bylaws) to discuss a specific issue and/or conduct a formal vote, the Board would be obligated to schedule the meeting and notify everyone. The meeting doesn't happen if the petition doesn't have at least 10% signing the petition or we don't get 10% to show up - we don't use proxies for this because they're only used to cast votes for Board elections.

In your case, I think your board is fighting a losing cause - apparently the homeowners have made it clear they don't want a special assessment, so they need to drop the idea or do a better job at selling it. After 2 years, I'd suggest put up or shut up - hold your special meeting and if no one shows up, the idea is dead. If people show up and object strongly and there are enough of them, the idea dies. If the board decides to call for a vote anyway and holds a special meeting to count them and no one shows up OR they don't get 2/3rds to agree, the idea dies and move on to something else.

And if the board doesn't take a hint? Maybe you and your neighbors need to rally together and elect another board (why haven't you don't that after 2 years anyway?)

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
BruceS8 (California)
Posts: 11
Posted:
I guess my biggest question, is that this vote has been going on for months now as no quorum is present per the board and now this vote has spanned from 2017 to 2018. Just does not seem right that is why I am asking questions.
My concerns are:
1. the fact that no one really knows who the inspectors are as they never have been formally announced
2. The fact the board appears to be continuing this election until they reach quorum
3. No inspector of the election has ever been present and if the property management is the inspector no counting of the ballots has ever been done at a board meeting nor a special meeting ever been announced to count the ballots
SheliaH (Indiana)
Posts: 6,964
Posted:
I'll give your board partial credit for at least trying to get votes (too many attempt end runs around the homeowners when they don't get their way). Did you ask these questions of your board? If so, what was the response?

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
BruceS8 (California)
Posts: 11
Posted:
No one has ever asked. Shame on me I know.
RichardP13 (California)
Posts: 3,868
Posted:
I remember this rule was changed a couple of years ago. The new requirement is that approval is by a majority of a quorum and quorum is defined more than 50%, §5605

SheliaH (Indiana)
Posts: 6,964
Posted:
Well, then you know what you need to do - if you don't speak up, this will keep going, and why continue to sit there pondering the universe? Ignorance isn't bliss, especially in a HOA. Perhaps by your asking the question, a light will go off in someone's head and they'll say "you know, we HAVE been on this for too long and it's time to stop because we aren't getting anywhere...."

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
CjC
Posts: 210
Posted:
We has a special vote to change how assessments are calculated. I even went to the courthouse to see the registered covenant change. The votes were attached as well and the dates span a few years. It took that long to get 67% of the vote. It does not have to be done in a single meeting in our community.
BruceS8 (California)
Posts: 11
Posted:
My last concern is that the board does not appear to have followed any of the rules that they have in place for the special assessment and therefore I feel it may void the election. They did not follow the CC&R's nor did they follow our election rules.
BruceS8 (California)
Posts: 11
Posted:
Quote:
Posted By RichardP13 on 01/30/2018 12:59 PM
I remember this rule was changed a couple of years ago. The new requirement is that approval is by a majority of a quorum and quorum is defined more than 50%, §5605


Hi Richard, I looked at that civil code that is for a regular assessment. Special assessments do not appear to be governed under that civil code. Our CC&R's specifically state 2/3rds
KerryL1 (California)
Posts: 14,550
Posted:
Can you, Bruce, quote the passage in your CC&Rs that 2/3 is needed to approve a special assessment? That just doesn't sound right.

Have you asked the Board how many ballots they've received? They certainly can tell you that. And WHO is receiving and storing the ballots??

I don't think there's any requirement for the Board to name the inspectors of election. But those names should be in the minutes of the meeting when they were selected. I can see why the inspectors wouldn't show up at a meeting if quorum hasn't been met--there's be no ballots for them to open & count.

I believe the board can continue the election until they achieve quorum.

(In CA HOAs mail-in ballots are counted towards quorum.)
BruceS8 (California)
Posts: 11
Posted:
For a bank Loan
"with the approval of members representing at least 2/3rds of the voting power of the association, the power but not the duty to borrow money and to incur indebtedness for the purposes of the association".
RichardP13 (California)
Posts: 3,868
Posted:
Quote:
Posted By BruceS8 on 01/30/2018 1:30 PM
Posted By RichardP13 on 01/30/2018 12:59 PM
I remember this rule was changed a couple of years ago. The new requirement is that approval is by a majority of a quorum and quorum is defined more than 50%, §5605



Hi Richard, I looked at that civil code that is for a regular assessment. Special assessments do not appear to be governed under that civil code. Our CC&R's specifically state 2/3rds

Please see special assessment in BOLD

(b) Notwithstanding more restrictive limitations placed on the board by the governing documents, the board may not impose a regular assessment that is more than 20 percent greater than the regular assessment for the association’s preceding fiscal year or impose special assessments which in the aggregate exceed 5 percent of the budgeted gross expenses of the association for that fiscal year without the approval of a majority of a quorum of members, pursuant to Section 4070, at a member meeting or election. [Old: Civ. Code §1366(b)]
BruceS8 (California)
Posts: 11
Posted:
Thank you for the clarification. But that would not apply for my community as it states: more restrictive limitations placed on the board by governing documents.
BruceS8 (California)
Posts: 11
Posted:
Also, our community's legal counsel also states that the HOA needs to have 2/3 approval. Hence, this is why the entire elections has dragged on for as long as it has.
RichardP13 (California)
Posts: 3,868
Posted:
Quote:
Posted By BruceS8 on 01/30/2018 2:05 PM
Also, our community's legal counsel also states that the HOA needs to have 2/3 approval. Hence, this is why the entire elections has dragged on for as long as it has.

Guess Civil Code has no bearing to your legal council.
RichardP13 (California)
Posts: 3,868
Posted:
Two other points.

1) if you look at the end of what I posted, it says the meeting needs to be a members meeting or election. Members present, either in person or by proxy determine whether the balloting is continued, not the Board.
BruceS8 (California)
Posts: 11
Posted:
Richard thank you for all of your input. Your last reply clarified something that I never truly understood. Like I originally posted our special election was two fold. One part was for the approval of the assessment. That part met the 50% quorum requirement as per CA civil code that you cited. The HOA has stated that our special assessment was approved. However, the second part of our ballot was for the HOA to obtain a bank loan to fund the repairs needed to our community. This loan would result in the over 20% increase to our HOA dues. Our HOA is having difficulty passing the obtainment of the bank loan with the 2/3 quorum requirement is needed as per our CC&R's.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Bruce

People often confuse % required. As an example: 50% maybe required for a Quorum but 2/3rds of all owners required for a Covenant change. It is not 2/3rds of the 50%. It is 2/3rds of all owners.

Quite common when discussing BOD recalls. Yes it might only require 10% to call for a Special Meeting to recall a BOD (Member) but they may still needs 51% of all owners to do a BOD Member recall. Been there, done that.....LOL

Took me a bit of time and getting it shoved up my butt once to understand the differences.

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