HOA Dues

Started by JasonA2 • 17 replies • 667 views

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JasonA2 (Georgia)
Posts: 6

Posted:

Hello-

looking for others input as to the attached, Section 3(a) raising dues without voter membership and if you believe it is subjected to Section 5, having a quorum for ANY action under section 3. Most of the folks feel that 3(a) is obviously considered action and would indeed need to be done at a meeting with a quorum per said section. No question that it could be done without the membership vote for 10% or less, but some are saying that that vote must be held at a meeting with a quorum as it is subject to section 5 restrictions. Looking for some opinions.

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AugustinD
Posts: 5,144

Posted:

Jason, I agree with those saying that the document says that the members, at a meeting where a members' quorum is present, must vote to approve an assessment increase above 10%. No quorum = no approval.

RichardP13 (California)
Posts: 3,868

Posted:

If quorum (60%) is not reached at the first meeting then a second meeting can be called, at which time it is reduced by half.

So if quorum of 30% is reached at the second meeting, is it 2/3 of the votes cast at that meeting or 2/3 of the members in general. For instance, if community of 100, is it 67 yes votes, once quorum is achieved, or is it 40 yes votes if 60 vote. And what if it goes to a second meeting, are the numbers reduced by half?

JasonA2 (Georgia)
Posts: 6

Posted:

I agree with you there, however, Im saying that if the increase is under the 10%, it says no vote is needed by the members yet section 5 says that although no vote by the membership is required if under 10% it still needs to be voted on by the board at a meeting which has a quorum of members. It would still be considered "any action" under 5. So the board cant increase under 10% behind closed doors, it had to be done at a meeting with a quorum of 60%.... right?

JasonA2 (Georgia)
Posts: 6

Posted:

The board is saying, and being advised by the management company that they can raise dues and don't need any approval from the homeowners, and this can be done at any meeting and doesn't require a quorum, I read it differently.

AugustinD
Posts: 5,144

Posted:

Quote:

Posted By JasonA2 on 03/07/2019 10:42 AM
I agree with you there, however, Im saying that if the increase is under the 10%, it says no vote is needed by the members yet section 5 says that although no vote by the membership is required if under 10% it still needs to be voted on by the board at a meeting which has a quorum of members. It would still be considered "any action" under 5. So the board cant increase under 10% behind closed doors, it had to be done at a meeting with a quorum of 60%.... right?

Oh, pardon my earlier read-o.

I think the document is ambiguous on the point. But I also think a court would say the intent is clear that the Board can vote on assessment increases up to 10%, and a meeting of the members need not be called to do so. The Board meeting where this is done does have to be noticed to all members, per the first sentence of Section 5.

I say this because a board meeting and a members' meeting cannot be held simultaneously. That is, at a meeting of the members, the board cannot suddenly suspend the members' meeting and move to a board meeting.

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

If under 10%, it can be voted on at a Board meeting where a quorum of Board members are present. Use Section 3(c)

JasonA2 (Georgia)
Posts: 6

Posted:

Correct, however, what does the board do when a quorum is not present at the said meeting? By law, no vote can take place. It just seems like a very poorly written document.

JasonA2 (Georgia)
Posts: 6

Posted:

Correct, however, what does the board do when a quorum is not present at the said meeting? By law, no vote can take place... So it would seem the dues can not be raised. It just seems like a very poorly written document.

AugustinD
Posts: 5,144

Posted:

HOA Boards do not meet during HOA Members' meetings. The directors might sit at the front (to prove their importance?), but they do not make motions as directors during a HOA members' meeting. The directors can only make motions as ordinary HOA members. The President should preside over both Board meetings and members' meetings.

Remember that an agenda must be sent out within a certain time period for either a members' meeting or a board meeting. How would this agenda look for the members' meeting you (Jason) claim is required? Something like:

-----Agenda, Meeting of Members for Vote on Assessment Increase of Nine Percent----

1. Count of members present in person or by proxy. Quorum or No Quorum?

2. If a quorum of HOA members is present, proceed to vote of Board at members' meeting.

3. If there is no quorum, members' meeting adjourned.
-------------------------------------------------------------------------------------

Note that your way, no quorum of the board is required for this vote to raise the assessment 9%.

JasonA2 (Georgia)
Posts: 6

Posted:

If under 10%, it can be voted on at a Board meeting where a quorum of Board members are present. Use Section 3(c)

Richard,

And just ignore section 5 that encompasses 3, its in there for a reason. This is such an old document it needs to be rewritten, its garbage.

RichardP13 (California)
Posts: 3,868

Posted:

There is no need for a member meeting IF you are not going over 10%. This is handled at the Board level only. If you were to propose over the 10% threshold, then a member meeting needs to be called and their approval is required following said guidelines.

GeorgeS21 (Florida)
Posts: 3,808

Posted:

Jason,

My read is the Board can approve under 10% ... obviously, there must be a quorum of MEMBERS (of the Board) at the Board meeting for there to be a Board meeting ... just as obviously, a majority of the MEMBERS of the Board (the directors) can pass the assessment increase.

AugustinD
Posts: 5,144

Posted:

Quote:

Posted By JasonA2 on 03/07/2019 11:19 AM
If under 10%, it can be voted on at a Board meeting where a quorum of Board members are present. Use Section 3(c)

Most likely your governing documents require notice of a board meeting. So what do you do, send out two notices/agendas, one notice/agenda for the members' meeting and another notice/agenda for the board meeting, with the notice saying that the two meetings will happen simultaneously? Or is your plan to adjourn the members' meeting and, if a quorum was (was!) present at the members' meeting, immediately have the board meeting? This is not kosher, because now the members' meeting is over, and no quorum even exists.

Even laws written by professionals working for the U. S. Congress can have remarkable ambiguities. Hence the courts, assisted by, for one, thoughtful HOA attorneys.

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By GeorgeS21 on 03/07/2019 11:25 AM
Jason,

My read is the Board can approve under 10% ... obviously, there must be a quorum of MEMBERS (of the Board) at the Board meeting for there to be a Board meeting ... just as obviously, a majority of the MEMBERS of the Board (the directors) can pass the assessment increase.

Legally 10% and under.

GeorgeS21 (Florida)
Posts: 3,808

Posted:

Richard - right, thanks.

I must be missing something on this one.

Seems pretty simple.

Board can approve 10% or less increase in dues.

Any more than 10% must be approved by membership at a membership meeting.

RoyalP
Posts: 1,104

Posted:

AGREE

(OMG)

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Jason

9.9% per year would double the dues in a bit over 10 years.

I agree with most of the posters. The BOD alone can implement a 9.9999% dues increase, each and every year.

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