Quorum Requirement

It is very clear in our little homeowner's By-Laws that a quorum for our annual (or any special association meeting) is that a majority of the unit owners (in our case 9 of 17) be present in person or by proxy. Note: As proxies are not allowed by law in AZ we use absentee ballots. We were unable to hold our annual meeting as we could not meet that quorum requirement. Very hard to meet a quorum requirement as several units (3) have absentee owners & one unit has a renter. There is basically no interest in participating in any capacity with many of the unit owners. Same Board members have served for several years. We are a retirement community in Sun City, AZ. Our management services company rep, our community manager (CM), advised us to try & hold another meeting to see if we could get a quorum. But get this...our CM told us that if we did not again get a quorum our Board of Management, the 3 of us, could unilaterally approve our yearly budget & increase everyone's monthly assessment fee.
The community manager said she had an attorney's word that we could do it based on one line in our CC&Rs which trump anything in our bylaws according to our CM. That line reads, "The Board of Management shall have the right & power to levy monthly assessments against each unit owner". I call this the nuclear option. Basically our CM is telling us that 2 of our 3 Board members (a majority of the Board) could do basically anything we want. I feel damn uncomfortable with ever doing that.
Update: Thank God we barely achieved a quorum at our rescheduled annual association meeting.
Need your valued input as usual.

Rich

Maybe you should work toward lowering your Quorum requirement. We did. From 50% to 20%.

Our bylaws allow members to vote either absentee or by submitting ballots in person at the annual meeting. There is no actual vote taken at the meeting so if we don't get a quorum, the election still counts. I think its a good system if it doesn't contradict your CC&Rs or state law.

I agree that you should be wary about the board increasing the assessments but if the membership is aware it is on the agenda and don't show up, I would take that as consent to allow the board to make the decision, if it is in your CC&Rs.

Rich,

As others have said, you may want to attempt to amend the governing documents to reduce the quorum (ours is 10%). This doesn't change the numbers needed for specific votes, it simply allows you to hold meetings and get normal business done.

In Florida, absent restrictions in the gov docs, an HOA board can raise annual assessments as it sees fit with no percentage cap or owner approval required. The same goes for special assessments.

In theory, a small group could gain control of the board, triple the assessments to drive people out, buy up those homes at a steep discount, drop assessments back down to earth, re-sell the homes and realize a hefty profit. I'm surprised it doesn't happen more often.

Such options are normally found within the Covenants or Bylaws.

In our Bylaws it is called Adjournment of Meetings. Basically says if we cannot reach Quorum, a majority of the Voting Members in attendance may adjourn the meeting to a time not less then nor more then 30 days from that day...

In my last SC HOA there was an additional statement that said Quorum requirement for the reconvened meeting was reduced by 50% and by 50% more if another Adjournment. We went from needing 350 (59% of 700) 175, to 88 before we could have the meeting. Meaning it required 3 meetings.

My present HOA Bylaws say no such thing so in this SC HOA, we could not do it like we did in my prior SC HOA. Just shows docs can vary even within a state.

PS

We originally had a Quorum requirement of 50% but we changed it to 20% and we have met Quorum since.

Excuse the typos

Jonil

To change from a 50% to a 20% Quorum was a Bylaw change thus requiring 51% of all owners to approve.

There is a major difference between 50% of a Quorum versus 50% of all owners. Covenant and Bylaw changes typically call for a % of all owners approving.

Some Bylaws allow for adjourning a meeting and Quorum requirements get lower (typically 50%) for the reconvened meeting> This has nothing to do with needing a specific % of all owners approving a Covenant/Bylaw change.

A % of all owners is not the same thing as the % of a Quorum. With 200 owners one can have a Quorum requiring 20% with 40 owners. A Covenant/Blaw change requiring 51% approval still needs 101 of the 200 owners approving. It is not 51% of the 40 but 51% of the 200.

Many confuse this.

In SC, State Statues call for 10% of owners being a Quorum. Pretty low is you ask me.

I would agree that is too low. When individuals purchase they agree per the current contract and any such contract should be difficult for those owners to change without having a larger number of participants at meetings. When it is too low I have seen where new residents want all these new rules and changes after purchasing and then try to railroad the owners who have lived there for a long time.