Quorum and disagreement between state statute and Docs??

I'm ready to be put into a straitjacket. I won't even use my previous history as a amateur magician to get out. Just take me away now.

Trying to get everything just right and now wondering if I screwed up when quoting quorum requirements for our annual meeting.

North Carolina Planned Community statute § 47F-3-109:
Quorums.
(a) Unless the bylaws provide otherwise, a quorum is present throughout any meeting of the association if persons entitled to cast ten percent (10%) of the votes which may be cast for election of the executive board are present in person or by proxy at the beginning of the meeting

So, the statute says at least 10% of the membership needs to show up in person or by proxy for quorum to be met. Unless the bylaws say otherwise.

Our bylaws:

Board of Directors
Section 2.
Election and Term of Office.
Directors shall be elected by vote of those persons present, in person or by proxy, at the annual meeting, a quorum being present.

No mention of new quorum requirements so, still 10%.

But our CCRs say:

8.07 Notice of Meetings and Quorum.
With respect to annual meetings, the presence in person or by proxy of Owners entitled to cast over 50% of all the votes of the Association shall constitute a quorum. If the required quorum is not present, another meeting may be called subject to the same notice requirement but the required quorum at the subsequent meeting shall be the present in person or by proxy of Owners entitled to cast at least one-third (1/3) of the total votes of the Association. At such times as a quorum is obtained, the vote of a majority of the Owners who are voting in person or by proxy at such meeting shall be required to approve any matter in which all of the members of the Association are entitled to vote, including any increase in the amount of annual Assessments in excess of the limitation specified in Section 8.04( c) above.

My understanding is that the order of precedence in the documents we have to follow runs: Statutes, CCRs, Bylaws, Rules and Regs.

Except that the Statute specifically calls out the Bylaws so I'm left wondering if in this case they overrule what the CCRs say.

Anyone faced a similar dilemma or do I need to open our wallet and call our lawyer?

In general, CC&Rs supersede bylaws, and state law supersedes CC&Rs unless the language in the state law specifically defers to the CC&Rs. I don't think the state law language you quoted changes that - your problem is the contradictory language in the CC&Rs.

So I don't blame you for pulling your hair out, and I'd suggest consulting the lawyer anyway since you may want to think about amending the CC&Rs to bring them in line with the other two items. The CC&R's quorum also is pretty high and may be hard to achieve (FWIW, in my community it's 20%). So that's two good reasons for amending.

The hierarchy is state law followed by CC&Rs followed by bylaws unless any one of them defers to a lower-level document.

Your state law says 10% but defers to the bylaws (which say nothing). So state law prevails.

The CC&Rs say 50%, which contradicts the state law, and the hierarchy says that the CC&Rs should be overridden by the state law. The question is: can the more stringent provision of the CC&Rs actually override the less stringent state law? It's not clear to me.

Regardless of lawmakers' intent, the law is exactly what is written in the statutes. You can get into legal trouble if you assume that they didn't really mean what it says. The term "governing documents" is unclear since it includes multiple documents (which are not in agreement in this case, with one specifying a percentage and the other silent).

Can you just punt and do what you think lawmakers intended? Sure - but you're relying on homeowners not pushing back if they think you've done it wrong, and they may turn out to be correct. I think it's worth getting an educated opinion on this, especially since that the 50% quorum requirement can make it hard to ever hold an annual meeting (which is an opportunity for an entrenched board to remain in power permanently).

I'm with those who says that whatever state statute is relevant to Michael's HOA, that state statute controls.

And however state statutes define bylaws, that controls.

But re: your CC&Rs, Michael. What is the title of Article 8-- just curious?

If I miss a question, please let me know. If I don't reply to one, it's not because I didn't want to.

AugustinD: We are subject to the Community Act.
We were incorporated in 2018
Thank you for that analysis including the quote from 55A-1-40. It's clear I'm going to have to read the docs from there all the way down at least once and make notes. I've done that with our HOA docs down but have resorted to searching the others. I apologies for spending your time on something I should have already seen.

KerryL1: the title of Article 8 is "ARTICLE VIII ASSESSMENTS"

Crap. I may have just knocked over AugustinD's finely stacked applecart.

[insert extended cursing]

I may owe everyone a big apology. I did not quote the entirety of 8.07 above, just the part about quorum that I thought was relevant to the question.

The part that has me thinking this is both the title of the section and "meeting called for the purpose of taking any action authorized in this Article VIII"

Here is that section in its entirety:

8.07 Notice of Meetings and Quorum.
(a) Written notice of the annual meeting of the Association, as well as any other meeting
called for the purpose of taking any action authorized in this Article VIII shall be sent to all
Owners not less than ten (10) days nor more than fifty (50) days in advance of such meetings.
With respect to annual meetings, the presence in person or by proxy of Owners entitled to cast
over 50% of all the votes of the Association shall constitute a quorum. If the required quorum is
not present, another meeting may be called subject to the same notice requirement but the
required quorum at the subsequent meeting shall be the present in person or by proxy of Owners
entitled to cast at least one-third (1/3) of the total votes of the Association. At such times as a
quorum is obtained, the vote of a majority of the Owners who are voting in person or by proxy at
such meeting shall be required to approve any matter in which all of the members of the
Association are entitled to vote, including any increase in the amount of annual Assessments in
excess of the limitation specified in Section 8.04( c) above. With respect to all other meetings of
the members of the Association, including, specifically, meetings pursuant to which special
Assessments are lobe levied upon each Lot or Dwelling pursuant to Section 8.05 above, there
shall be no specific requirement establishing a quorum and the vote of a majority of the Owners
who are voting in person or by proxy at any such special meeting shall be binding on all of the
members of the Association

AugustinD: I'm inclined to think the 50% may not apply simply because the only business to be conducted at our annual meeting is only the election of a new BOD.

and because

(a) ... as well as any other meeting called for the purpose of *taking any action authorized in this Article VIII* ...

It would seem to me that the context here depends on there being business at the annual meeting that involves changes to the assessments. But then, ianal.

It's looking more and more that I'll need to get input from our attorney just to cover my ass.

well, you haven't let me down yet and that answer would let me avoid going back to the membership and telling them I was wrong about something like that. :-)

Michael,

The state statute serves as a default rule should an HOA be officially created and not define quorum rules for annual meetings. Your CC&Rs are completely legitimate if steep to achieve.

Your bylaws "state otherwise" as is outlined in the state law.

Don't pull your hair out.

Michael, Augustin knows his stuff. He has helped me out more than once.

One area he helped me in was the hierarchy of State Statutes and who they apply to. I too, am in North Carolina and what I haven't heard, or may have missed, is whether or not your HOA is or is not a condominium?

If you are a condominium your superior statute may be 47C, The North Carolina Condominium Act. I believe their quorum requirements are 20% and They do supersede your CC&R's. It's not unusual for quorum requirements not to b updated in HOA CC&R's. Sometimes they don't even know. Mine on Beech Mountain, says 34%. No longer valid.

North Carolina has a tangled web of HOA statutes: 47A, 47C, 47F, and 55A.

And just when you think you have a handle on everything, you find out 47C doesn't apply to all NC Condos!

Lawfirmcarolinas.com is a wonderful source of info for NC HOA's. Jim Slaughter seems to be a very nice guy.

In the applicability section of 47C, it will tell you which HOA's the statute does and does not cover.

Or, if the statute applies to you, you can get the Law Firm Carolinas version in which these wonderful people have bolden the sections that apply to all condos!

Good luck, Michael

Walt