Projected no quorum at annual meeting: what to do?

AdamD1 (Indiana)
Posts: 179

Posted:

If history serves us right, we will not achieve quorum at our annual meeting in November. Our state law allows Directors to continue on and we may pass a budget (not to exceed 10% of current dues) absent quorum at annual meeting.

Our governing docs. allow for us to reschedule the meeting with lowered quorum requirements. This has never been done since even with the lowered quorum threshold, we still wouldn't be able to make quorum (homeowner apathy).

What we have done in the past is this:

We have the meeting and when no quorum is met, we continue the meeting as if we had quorum. However, we do not vote on Directors nor a budget. Our secretary even keeps minutes for these annual meetings, even though quorum wasn't met.

Is this customary under such circumstances? Appreciate any advice!

CathyA3 (Ohio)
Posts: 6,299

Posted:

1. Our annual meeting packets contain a nicely designed flyer with big print saying why the proxies are important.

2. Our property manager, who collects the proxies, keeps track of the count. If it looks like we may have a problem, the board president (yours truly) knocks on doors until she collects enough to reach quorum.

3. If your declaration and state law allow, you may consider using multi-year proxies - ours can be good for five years - to avoid the annual scramble. Of course somebody has to keep track of these if people sell their homes.

4. If state law allows, consider amending the declaration to allow a lower quorum. However, amendments require a super majority to pass, so if you're having an issue reaching quorum at the annual meeting, you'll very likely have trouble getting enough votes to pass the amendment.

5. >>> Have a hot button topic or an interesting speaker on the meeting agenda. <<< This works well, at least for that particular year.

TimM11
Posts: 354

Posted:

It happened at mine a few years ago, and the meeting was adjourned and rescheduled a couple months later, with more communication sent out ahead of time. Since we always rent a room for ours, the MC at the time included wording in the mailing that we waste money when we schedule a meeting and don't get quorum.

RichA3 (Arizona)
Posts: 48

Posted:

I did not know proxies were allowed any longer, at least not in Arizona. We can only use absentee ballots. On those absentee ballots we not only vote for the election of Board members and allow a place to vote 'yes or no' on the proposed budget for the next year, but we also have a box to check that says, "I am not voting but I want this ballot to count towards the quorum so that the association can conduct its annual business".

BarbaraT1 (Texas)
Posts: 821

Posted:

How many homes are in your association and what constitutes quorum?

GeorgeS21 (Florida)
Posts: 3,808

Posted:

Apathy ....

If I were on the BoD, I would support immediately passing a budget 10% higher than the last.

I would continue as a Director, and support passing another budget 10% higher than the last.

Do this a few years in a row, and spend the money on things the Board likes.

Repeat until you start generating interest.

AdamD1 (Indiana)
Posts: 179

Posted:

Quote:

Posted By BarbaraT1 on 09/14/2018 10:21 AM
How many homes are in your association and what constitutes quorum?

442 single family homes. Quorum is 60%.

AdamD1 (Indiana)
Posts: 179

Posted:

Quote:

Posted By GeorgeS21 on 09/14/2018 11:37 AM
Apathy ....

If I were on the BoD, I would support immediately passing a budget 10% higher than the last.

I would continue as a Director, and support passing another budget 10% higher than the last.

Do this a few years in a row, and spend the money on things the Board likes.

Repeat until you start generating interest.

Oh now I like this! Our "treasurer" who doesn't even know basic details about our finances, did come up with a budget (after I insisted).

We only pay $95 a year. Yes, that's right, 95 bucks a year. He wants the budget lowered to $85 a year. FML! lol

AdamD1 (Indiana)
Posts: 179

Posted:

Quote:

Posted By AdamD1 on 09/14/2018 12:02 PM

Posted By GeorgeS21 on 09/14/2018 11:37 AM
Apathy ....

If I were on the BoD, I would support immediately passing a budget 10% higher than the last.

I would continue as a Director, and support passing another budget 10% higher than the last.

Do this a few years in a row, and spend the money on things the Board likes.

Repeat until you start generating interest.

Oh now I like this! Our "treasurer" who doesn't even know basic details about our finances, did come up with a budget (after I insisted).

We only pay $95 a year. Yes, that's right, 95 bucks a year. He wants the budget lowered to $85 a year. FML! lol

Needless to say, I got the Board to agree to have a Special Meeting to discuss only the 2019 budget so we can come up with a more appropriate budget than what our treasurer presented.

AdamD1 (Indiana)
Posts: 179

Posted:

Quote:

Posted By RichA3 on 09/14/2018 9:56 AM
I did not know proxies were allowed any longer, at least not in Arizona. We can only use absentee ballots. On those absentee ballots we not only vote for the election of Board members and allow a place to vote 'yes or no' on the proposed budget for the next year, but we also have a box to check that says, "I am not voting but I want this ballot to count towards the quorum so that the association can conduct its annual business".

We almost fell into RECEIVERSHIP last summer. We mailed out proxies.. only get a handful returned. In order for that meeting to take place and elect a Board (to avoid receivership) we had to go door-to-door to collect signatures.

We tried to make the proxies sooooo simple for homeowners who don't care or are too busy. Yet they wouldn't even sign a proxy. So, proxies won't work for us unless we go door-to-door (over 442 homes)... and that ain't happening again!!!

BarbaraT1 (Texas)
Posts: 821

Posted:

Quote:

Posted By AdamD1 on 09/14/2018 12:01 PM

Posted By BarbaraT1 on 09/14/2018 10:21 AM
How many homes are in your association and what constitutes quorum?

442 single family homes. Quorum is 60%.

Well that's bananas. And of course you can't lower the quorum unless you get a quorum to amend the bylaws. Your declarant really set you up for failure there.

I was going to suggest going door to door but I see from further comments that's not going to be an option.

GenoS (Florida)
Posts: 4,276

Posted:

Quote:

Posted By GeorgeS21 on 09/14/2018 11:37 AM
Apathy ....

If I were on the BoD, I would support immediately passing a budget 10% higher than the last.

I would continue as a Director, and support passing another budget 10% higher than the last.

Do this a few years in a row, and spend the money on things the Board likes.

Repeat until you start generating interest.

I'm glad I read the whole thread before replying because this is exactly what I was going to say.

AdamD1 (Indiana)
Posts: 179

Posted:

Quote:

Posted By GenoS on 09/14/2018 7:35 PM

Posted By GeorgeS21 on 09/14/2018 11:37 AM
Apathy ....

If I were on the BoD, I would support immediately passing a budget 10% higher than the last.

I would continue as a Director, and support passing another budget 10% higher than the last.

Do this a few years in a row, and spend the money on things the Board likes.

Repeat until you start generating interest.

I'm glad I read the whole thread before replying because this is exactly what I was going to say.

Good advice all around. However, this one suggestion (keep raising it 10% each year) really stands out as the best approach based upon my viewpoint of the neighborhood. Thanks so much!

JohnC46 (South Carolina)
Posts: 14,265

Posted:

At 10% increase per year, dues will be doubled in 7 years.

JenniferG12 (Texas)
Posts: 103

Posted:

Quote:

Posted By JohnC46 on 09/15/2018 10:47 AM
At 10% increase per year, dues will be doubled in 7 years.

I think the idea is to get people's attention.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

In my last HOA (700 members) the Members in attendance at the Annual Meeting could vote to discontinue the meeting and call for another one within 30 days where the Quorum requirement was reduced by 50% and keep doing it. One year, we had to discontinue twice before we finally achieved a Quorum which ended up being 25% of the original requirement. 351, 126, 73.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By JohnC46 on 09/15/2018 1:27 PM
In my last HOA (700 members) the Members in attendance at the Annual Meeting could vote to discontinue the meeting and call for another one within 30 days where the Quorum requirement was reduced by 50% and keep doing it. One year, we had to discontinue twice before we finally achieved a Quorum which ended up being 25% of the original requirement. 351, 126, 73.

ADDED

Proxies counted and were worded to allow them to be carried forward.

JenniferG12 (Texas)
Posts: 103

Posted:

Our docs are pretty smart. If no quorum, adjourn, call a new meeting, and whoever is present constitutes a quorum. If people don't like a few deciding for all, they can show up, or at least turn in a proxy. Either way, the beat goes on.

PaaN
Posts: 219

Posted:

perfect

GeorgeS21 (Florida)
Posts: 3,808

Posted:

My voluntary HOA Bylaws say however many members show up at a duly called meeting constitutes a quorum!

ArtL1 (Florida)
Posts: 140

Posted:

Quote:

Posted By JenniferG12 on 09/15/2018 1:40 PM
Our docs are pretty smart. If no quorum, adjourn, call a new meeting, and whoever is present constitutes a quorum. If people don't like a few deciding for all, they can show up, or at least turn in a proxy. Either way, the beat goes on.

Have you actually done that? I'd thought about trying for an amendment to make quorum for the annual meeting half the normal % in years following years in which the annual meeting doesn't achieve quorum. I think I like your version even better. Especially if that applies to special meetings. i.e. Schedule the meeting, if it doesn't make quorum adjourn for some number of weeks, and send out notice of the next adjournment of the meeting, along with a reminder that whatever number of members attend, that will constitute a quorum for that meeting.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

We lowered our Quorum from 50% to 20% but as it was a Bylaw change we needed 50% of all owners to agree with it. The vote was tight but it passed.

JenniferG12 (Texas)
Posts: 103

Posted:

Quote:

Posted By ArtL1 on 09/16/2018 10:54 AM

Posted By JenniferG12 on 09/15/2018 1:40 PM
Our docs are pretty smart. If no quorum, adjourn, call a new meeting, and whoever is present constitutes a quorum. If people don't like a few deciding for all, they can show up, or at least turn in a proxy. Either way, the beat goes on.

Have you actually done that?

Yes. We didn't meet quorum this year, and so the meeting was adjourned, notices were sent there would be another scheduled election, and whatever % participated in that decided the vote. Proxies/ballots that had been turned in for the first one were honored, but during the two week delay, people could revoke or change their votes. People who had not voted before of course had another chance to do so.

SheliaH (Indiana)
Posts: 6,964

Posted:

Howdy!

Your documents give you an out – the directors continue until enough people show up and/or return proxies to hold an annual meeting and board elections. Since few people are bothering to do so, you and your colleagues get to stay on AND pass your budget up to 10% increase over this year. (Great idea George!)

Our documents only allow for an increase up to 5% without homeowner approval, but the board doesn't have to get it approved at an annual meeting, thank goodness. A 10% increase to $104.50 shouldn’t break anyone’s budget. In fact, you can use some of the money to pump up reserves. Anyone has a problem with it, let THEM run for the board and come up with some figures that make sense!

I doubt that will include the treasurer who didn’t come up with something to justify a $10 drop in assessments. Is he best friends with the electrical engineer who wanted to do repairs to the common area despite not having insurance or a license???

I also agree that quorum is too high – ours is 10%. If you ever get enough people to go along with a lower quorum, I’d drop it to 10% - this way, you only need 44 homeowners to show up or return proxies.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

AdamD1 (Indiana)
Posts: 179

Posted:

Quote:

Posted By SheliaH on 09/16/2018 1:59 PM
Howdy!

Your documents give you an out – the directors continue until enough people show up and/or return proxies to hold an annual meeting and board elections. Since few people are bothering to do so, you and your colleagues get to stay on AND pass your budget up to 10% increase over this year. (Great idea George!)

Our documents only allow for an increase up to 5% without homeowner approval, but the board doesn't have to get it approved at an annual meeting, thank goodness. A 10% increase to $104.50 shouldn’t break anyone’s budget. In fact, you can use some of the money to pump up reserves. Anyone has a problem with it, let THEM run for the board and come up with some figures that make sense!

I doubt that will include the treasurer who didn’t come up with something to justify a $10 drop in assessments. Is he best friends with the electrical engineer who wanted to do repairs to the common area despite not having insurance or a license???

I also agree that quorum is too high – ours is 10%. If you ever get enough people to go along with a lower quorum, I’d drop it to 10% - this way, you only need 44 homeowners to show up or return proxies.

Is he best friends with the electrical engineer who wanted to do repairs to the common area despite not having insurance or a license???

They are the same person hahahaha

AdamD1 (Indiana)
Posts: 179

Posted:

Quote:

Posted By SheliaH on 09/16/2018 1:59 PM
Howdy!

Your documents give you an out – the directors continue until enough people show up and/or return proxies to hold an annual meeting and board elections. Since few people are bothering to do so, you and your colleagues get to stay on AND pass your budget up to 10% increase over this year. (Great idea George!)

Our documents only allow for an increase up to 5% without homeowner approval, but the board doesn't have to get it approved at an annual meeting, thank goodness. A 10% increase to $104.50 shouldn’t break anyone’s budget. In fact, you can use some of the money to pump up reserves. Anyone has a problem with it, let THEM run for the board and come up with some figures that make sense!

I doubt that will include the treasurer who didn’t come up with something to justify a $10 drop in assessments. Is he best friends with the electrical engineer who wanted to do repairs to the common area despite not having insurance or a license???

I also agree that quorum is too high – ours is 10%. If you ever get enough people to go along with a lower quorum, I’d drop it to 10% - this way, you only need 44 homeowners to show up or return proxies.

This is probably off topic, but why even have quorum to begin with? Why just make it, who ever shows up can vote and decide without a minimum number needed? If you snooze, you lose!

BarbaraT1 (Texas)
Posts: 821

Posted:

Quote:

Posted By AdamD1 on 09/16/2018 7:01 PM

Posted By SheliaH on 09/16/2018 1:59 PM
Howdy!

Your documents give you an out – the directors continue until enough people show up and/or return proxies to hold an annual meeting and board elections. Since few people are bothering to do so, you and your colleagues get to stay on AND pass your budget up to 10% increase over this year. (Great idea George!)

Our documents only allow for an increase up to 5% without homeowner approval, but the board doesn't have to get it approved at an annual meeting, thank goodness. A 10% increase to $104.50 shouldn’t break anyone’s budget. In fact, you can use some of the money to pump up reserves. Anyone has a problem with it, let THEM run for the board and come up with some figures that make sense!

I doubt that will include the treasurer who didn’t come up with something to justify a $10 drop in assessments. Is he best friends with the electrical engineer who wanted to do repairs to the common area despite not having insurance or a license???

I also agree that quorum is too high – ours is 10%. If you ever get enough people to go along with a lower quorum, I’d drop it to 10% - this way, you only need 44 homeowners to show up or return proxies.

This is probably off topic, but why even have quorum to begin with? Why just make it, who ever shows up can vote and decide without a minimum number needed? If you snooze, you lose!

In theory, it's to prevent a small number of homeowners from making decisions that affect the entire community. But that ends up happening anyway, with ever-lower quorums for recall meetings or the option to recess and readjourn with those present constituting quorum.

In Texas, a board may reduce quorum to 10% for the purposes of election only - regardless of what an HOA's bylaws require. This allows communities to at least conduct elections, while still ensuring that major changes like amending the declaration still require participation from 2/3 of the homeowners.

It's unfortunate that apathy is rampant - not just in HOAs but in local and national government.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Do not confuse Quorum with % of owners required to change Covenants and/or Bylaws.

In our HOA Annual Meeting, a Quorum is need to conduct business such as hold an election, present budgets, etc. We still need 2/3rds of all owners approving (I say 2/3rds approving not just voting) to change a Covenant. We still need 51% of all owners approving (I say 51% approving not just voting) to change a Bylaw.

When we changed from a 50% Quorum to a 20% Quorum, many did not realize the amounts need to change Covenants and/or Bylaws stayed the same ala 23rds and 51%. We had to explain this over and over and over, and still some did not get it.

BarbaraT1 (Texas)
Posts: 821

Posted:

Quote:

Posted By JohnC46 on 09/17/2018 8:41 AM
Do not confuse Quorum with % of owners required to change Covenants and/or Bylaws.

In our HOA Annual Meeting, a Quorum is need to conduct business such as hold an election, present budgets, etc. We still need 2/3rds of all owners approving (I say 2/3rds approving not just voting) to change a Covenant. We still need 51% of all owners approving (I say 51% approving not just voting) to change a Bylaw.

When we changed from a 50% Quorum to a 20% Quorum, many did not realize the amounts need to change Covenants and/or Bylaws stayed the same ala 23rds and 51%. We had to explain this over and over and over, and still some did not get it.

Yes, but you still need a meeting - at which quorum is met - to pass the changes.

What the Texas law does is allow boards to reduce the quorum to 10% for election purposes only. Any other item on the agenda requiring homeowner vote cannot be voted upon unless the required quorum is present.

It's sort of moot because if you have the 2/3 votes to change the documents you surely have their proxies or presence at the meeting as well....

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By BarbaraT1 on 09/17/2018 10:03 AM

Posted By JohnC46 on 09/17/2018 8:41 AM
Do not confuse Quorum with % of owners required to change Covenants and/or Bylaws.

In our HOA Annual Meeting, a Quorum is need to conduct business such as hold an election, present budgets, etc. We still need 2/3rds of all owners approving (I say 2/3rds approving not just voting) to change a Covenant. We still need 51% of all owners approving (I say 51% approving not just voting) to change a Bylaw.

When we changed from a 50% Quorum to a 20% Quorum, many did not realize the amounts need to change Covenants and/or Bylaws stayed the same ala 23rds and 51%. We had to explain this over and over and over, and still some did not get it.

Yes, but you still need a meeting - at which quorum is met - to pass the changes.

What the Texas law does is allow boards to reduce the quorum to 10% for election purposes only. Any other item on the agenda requiring homeowner vote cannot be voted upon unless the required quorum is present.

It's sort of moot because if you have the 2/3 votes to change the documents you surely have their proxies or presence at the meeting as well....

We do not need a meeting for Covenant nor Bylaw changes. It can be done via a mailing asking for ballots/proxies returned and can be done over a period of time like 2 months. Also could be done with a properly worded petition.