Covenant Amendment Vote Issue

Our neighborhood is in SC. We recently held our annual member meeting where we voted on 7 proposed covenant and bylaw changes. My concern is the number of votes "for" did not meet the stipulation in our covenants that states there must be 3/4 in favor to pass. At the bottom are the various sections of our Covenants and Bylaws that govern voting.

In a nut shell, we get a 30 day notice of changes and the opportunity to submit a proxy or vote in person. If a member doesn't submit a proxy, their vote is counted with the majority. But what defines a majority when the clause states it takes 3/4 to pass?

The 7 different votes all had more "for" than "against" but only one had 3/4 more, the rest were all 36-30, 37-29 etc. The board then awarded all the unproxied votes with the simple majority, so all changes passed.

I believe the intent is for amendment changes to be a difficult process and not controllable by a few members. If the majority is indeed implied to be a simple 51% to get the unproxied votes, then the 3/4 rule is out the window for any votes for amendments since it would only take one more "for" than "against" during the votes to garner the unproxied votes, not a 3/4 majority as stipulated.

I view the pertinent parts of the covenants this way:
Amendments: 3/4 of votes cast in favor to approve amendments (majority is 3/4 in this case, not 51% or simple, it takes 3/4s to pass)
Sect 4 Quorum: Unless otherwise provided herein (the 3/4 vote requirement is otherwise provided herein), a majority of votes wins (the amendments clause stipulates 3/4 as the majority for amendment changes)
Sect 5 Voting: A members failure to proxy causes their vote to go to the majority present and voting (per quorum and amendments, 3/4 is the majority)
Sect 6 Proxies: members give proxy to majority present and voting (redundant to sect 5 but the implication is the same, per quorum and amendments, 3/4 is the majority)

How do others interpret how the vote count works when the requirement is 3/4 or 2/3? Does it really only take one more "for" than "against" to pass in our case? How far off base am I on this?

Thanks
Bill D.

Here are the Covenant and Bylaws sections (I don't know how to highlight the pertinent sections):
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Covenants, Art. VII, General Provisions
Amendments. The Association expressly reserves the right to amend this Declaration or any portion thereof. The procedure for amendment shall be as follows: All proposed amendments shall be submitted to a vote of the Members at a duly called meeting of the Association and any such proposed amendment shall be deemed approved if three-fourths (3/4) of the votes cast at such meeting vote in favor of such proposed amendment. Notice shall be given each Member at least thirty (30) days prior to the day of the meeting at which such proposed amendment is to be considered. If any proposed amendment to this Declaration is approved by the Members as set forth above, the President and Secretary of the Association shall execute an Addendum to this Declaration which shall set forth the amendment, the effective date of the amendment (which in no event shall be less than sixty (60) days after the date of the meeting of the Association at which such amendment was adopted), the date of the meeting of the Association at which such amendment was adopted, the date that notice of such meeting was given, the total number of votes of members of the Association, the total number of votes required to constitute a quorum at a meeting of the Association, the total number of votes necessary to adopt the amendment, the total number of votes cast in favor of such amendment and the total number of votes cast against the amendment. Such Addendum shall be recorded in the Office of the Register of Mesne Conveyances for Dorchester County.

Bylaws, Art. III, Membership & Voting
Section 4. Quorum. The presence at the meeting of Members, or of proxies, entitled to cast fifty-one percent of the total vote of the Membership shall constitute a quorum for the transaction of business at meetings of the Association. Unless otherwise provided herein, a majority of the votes cast at such meeting shall be the vote required to adopt decisions. Any absent Member who does not execute and return the proxy form sent to him in the mailing referred to in Section 5 of this Article shall be deemed to be present for the purposes of determining the presence of a quorum.

Bylaws, Art. III, Membership & Voting
Section 5. Voting. Members shall be entitled to one vote for each Lot, and the vote required to adopt decisions shall be as set out in Section 4 above. Votes can be cast only at meetings of the Association convened in accordance with the Bylaws, and in the absence of a valid proxy, an individual shall act in his own behalf, a corporation shall act by any officer, a partnership shall act by any general partner, an association shall act by any associate, a trust shall act by any trustee, and any other legal entity shall act by any managing agent. The failure of an absent Member to execute and return the proxy form sent to him in the mailing referred to in Section 6 of this Article shall constitute a proxy to and for the majority present and voting. When a Member consists of two or more persons, any one of such persons shall be deemed authorized to act for all in taking any action on behalf of such Member unless another of such persons objects and in case of disagreement among co-owners as to the vote, the vote which such co-owners may be entitled to cast may not be cast. All votes appurtenant to a single Lot must be cast together and may not be split.

Bylaws, Art. III, Membership & Voting
Section 6. Proxies. Any member may by written proxy designate an agent to cast his vote. Unless a proxy states otherwise, it shall be deemed to confer the authority to execute consents and waivers and to exercise the right to examine the books and records of the Association. A proxy may be revocable or irrevocable but shall be deemed revocable at will unless it states otherwise. No proxy shall be honored until delivered to the Secretary of the Association. If at least thirty days prior to a duly called meeting a Member is informed by mail of (1) the time and place of the meeting, (2) the agenda for the meeting, and (3) such data as is then available relative to issues on which there will be a vote, and a proxy form is included in such mailing, and the Member neither attends the meeting nor returns his executed proxy, then such Member shall be deemed to have given his proxy to and for the majority present and voting.

That those who are {absent and do not submit a proxy} get assigned a vote going with the majority is unusual in my experience. But it's right there in black and white in your Bylaw Art. III.

For purposes of this discussion, I think a "majority" is not 3/4 or 2/3. It is 50+%.

I believe a court would say that those who do not appear and do not cast a proxy have legal notice of the Bylaw and know that their vote will be counted with the majority (meaning 50+%) of those "present and voting" at the annual meeting. It appears legitimate to me for one more "for" than "against" vote (of those present, in person or by proxy) to garner the unproxied votes and potentially achieve the 3/4.

South Carolina Not-For-Profit Corporate Law:

SECTION 33 31 140. Definitions.

Unless the context otherwise requires;
(1) “Approved by the members” or “approval by the members” means approved or ratified by the members entitled to vote on the issue through either:
(a) the affirmative vote of a majority of the votes of the members represented and voting at a duly held meeting at which a quorum is present or the affirmative vote of the greater proportion including the votes of any required proportion of the members of any class as the articles, bylaws, or this chapter may provide for specified types of member action .....

SECTION 33 31 723. Voting requirements.

(a) Unless this chapter, the articles, or the bylaws require a greater vote or voting by class, if a quorum is present, the affirmative vote of the votes represented and voting, which affirmative votes also constitute a majority of the required quorum, is the act of the members.

Now, the question becomes:

? How can a corporate member actually, in practice in the 'real world', enforce said law ?

JohnC46, are you saying that the following clause from this HOA's Bylaws is unlawful and so not enforceable?

Question for an attorney.

but

only if SC law 'defers' to your bylaws ON THAT SPECIFIC POINT

in my PERSONAL opinion, NO

100% minus those that are not in good standing with their HOA dues and other fees.

D'OH

I agree the above is a big deal and worthy of a polite objection, followed within ten days by a letter of demand.

I suggest starting a new thread on the budget amendment issue.

I wish our situation was BS, but its not.

That's the problem I have, its the simple majority does control in this situation even when the covenants says you have to have 3/4 in favor to pass. In order to defeat a change the "nae"s have to get 51% where 25% should suffice. I've talked with a couple former presidents, they explained the process the same as you did: 30 day notice is given, either go in person or proxy your vote otherwise you are one of the majority (whatever that should be), and the quorum is always achieved.

We have over 370 members, we had about 70 voters (in person or by proxy) at the meeting. A lot of apathy here.

I believe your ccr is invalid. If correct the Law > CCRs

SECTION 33-31-724. Proxies.

(a) Unless the articles or bylaws prohibit or limit proxy voting, a member may appoint a proxy to vote or otherwise act for the member by signing an appointment form either personally or by an attorney-in-fact.

First it says MAY appoint a proxy, where as your CCR is saying it has to be done.

Second a proxy has to be signed.. Those unproxy votes are not signed.

GlenM4, first, I think that Bylaw Art III is not taking away a member's option to appoint a proxy. Second, if Section 33-31-724 said "may only appoint... ", or "shall appoint... " then I would be persuaded.

I am aware that the nationwide case law says that the Bylaws set the terms of what a valid proxy is. The courts prohibit any limitation on proxies that a board might dream up going beyond the Bylaws. E.g. requiring notarization when the Bylaws do not require notarization.

I could be wrong. Maybe a judge would see it as you do.