Special Meeting Continued Without A Quorum

StacyM5 (Maryland)
Posts: 59

Posted:

Our Board called a Special meeting last night to: "Complete election of officers to fill vacant positions; final discussion and vote on revised seslf management 2023 budget; discuss, select and vote on HOA management group to conduct association business if applicable."

It looked like we weren't going to have a quorum, but at the last minute a member walked in so we had exactly the 20% needed to carry on. Late last night well after the meeting was over, it was discovered that we did not have a quorum afterall because 2 of the people in attendence were not actually owners (as required by our bylaws), they were spouses of owners but did not have their name on the deed so they are not eligible for membership in the HOA. Since the spouses that are listed on the deed were not in attendance at the meeting, the Board should have had proxies but they did not give any out, so these two people still went ahead and participated in the voting and meeting without the Board noticing.

FYI - we are having extreme trouble in finding anyone interested in attending Board meetings, let alone finding someone to serve on the Board. Our new 2nd Vice President that was voted in last night is already thinking of stepping down if they can't find anyone to fill the positions of President and 1st Vice President, who stepped down abruptly last night, because he does not want to do public speaking and said this is going to be too much work for him.

Our bylaws do allow for the Board to appoint Board members for the remainder of the term. In light of this, is this still a problem that the Board continued on with the election and budget adoption without a quorum?

JohnC73 (Massachusetts)
Posts: 344

Posted:

Quote:

Posted By StacyM5 on 12/17/2022 8:47 AM
Our Board called a Special meeting last night to: "Complete election of officers to fill vacant positions; final discussion and vote on revised seslf management 2023 budget; discuss, select and vote on HOA management group to conduct association business if applicable."

It looked like we weren't going to have a quorum, but at the last minute a member walked in so we had exactly the 20% needed to carry on. Late last night well after the meeting was over, it was discovered that we did not have a quorum afterall because 2 of the people in attendence were not actually owners (as required by our bylaws), they were spouses of owners but did not have their name on the deed so they are not eligible for membership in the HOA. Since the spouses that are listed on the deed were not in attendance at the meeting, the Board should have had proxies but they did not give any out, so these two people still went ahead and participated in the voting and meeting without the Board noticing.

FYI - we are having extreme trouble in finding anyone interested in attending Board meetings, let alone finding someone to serve on the Board. Our new 2nd Vice President that was voted in last night is already thinking of stepping down if they can't find anyone to fill the positions of President and 1st Vice President, who stepped down abruptly last night, because he does not want to do public speaking and said this is going to be too much work for him.

Our bylaws do allow for the Board to appoint Board members for the remainder of the term. In light of this, is this still a problem that the Board continued on with the election and budget adoption without a quorum?

I would say it is illegal.

In our association each "unit" gets 1 vote. Some units are owned individually and some are owned as couples, so the fair thing is to give each unit 1 vote. We also have a registration process where each owner registers/signs-in and there isn't a doubt about the quorum.

StacyM5 (Maryland)
Posts: 59

Posted:

Quote:

Posted By JohnC73 on 12/17/2022 9:13 AM

Posted By StacyM5 on 12/17/2022 8:47 AM
Our Board called a Special meeting last night to: "Complete election of officers to fill vacant positions; final discussion and vote on revised seslf management 2023 budget; discuss, select and vote on HOA management group to conduct association business if applicable."

It looked like we weren't going to have a quorum, but at the last minute a member walked in so we had exactly the 20% needed to carry on. Late last night well after the meeting was over, it was discovered that we did not have a quorum afterall because 2 of the people in attendence were not actually owners (as required by our bylaws), they were spouses of owners but did not have their name on the deed so they are not eligible for membership in the HOA. Since the spouses that are listed on the deed were not in attendance at the meeting, the Board should have had proxies but they did not give any out, so these two people still went ahead and participated in the voting and meeting without the Board noticing.

FYI - we are having extreme trouble in finding anyone interested in attending Board meetings, let alone finding someone to serve on the Board. Our new 2nd Vice President that was voted in last night is already thinking of stepping down if they can't find anyone to fill the positions of President and 1st Vice President, who stepped down abruptly last night, because he does not want to do public speaking and said this is going to be too much work for him.

Our bylaws do allow for the Board to appoint Board members for the remainder of the term. In light of this, is this still a problem that the Board continued on with the election and budget adoption without a quorum?

I would say it is illegal.

In our association each "unit" gets 1 vote. Some units are owned individually and some are owned as couples, so the fair thing is to give each unit 1 vote. We also have a registration process where each owner registers/signs-in and there isn't a doubt about the quorum.

I am aware that it is illegal which doesn't sit well for me, but my husband keeps what is the big deal since the Board can just appoint whoever they want in the interim without putting in out for a vote anyways. And the budget would get adopted regardless at the next regular meeting since the reguired quorum for regular meetings is just a majority of the voting members present.

StacyM5 (Maryland)
Posts: 59

Posted:

Quote:

Posted By StacyM5 on 12/17/2022 9:22 AM

Posted By JohnC73 on 12/17/2022 9:13 AM

Posted By StacyM5 on 12/17/2022 8:47 AM
Our Board called a Special meeting last night to: "Complete election of officers to fill vacant positions; final discussion and vote on revised seslf management 2023 budget; discuss, select and vote on HOA management group to conduct association business if applicable."

It looked like we weren't going to have a quorum, but at the last minute a member walked in so we had exactly the 20% needed to carry on. Late last night well after the meeting was over, it was discovered that we did not have a quorum afterall because 2 of the people in attendence were not actually owners (as required by our bylaws), they were spouses of owners but did not have their name on the deed so they are not eligible for membership in the HOA. Since the spouses that are listed on the deed were not in attendance at the meeting, the Board should have had proxies but they did not give any out, so these two people still went ahead and participated in the voting and meeting without the Board noticing.

FYI - we are having extreme trouble in finding anyone interested in attending Board meetings, let alone finding someone to serve on the Board. Our new 2nd Vice President that was voted in last night is already thinking of stepping down if they can't find anyone to fill the positions of President and 1st Vice President, who stepped down abruptly last night, because he does not want to do public speaking and said this is going to be too much work for him.

Our bylaws do allow for the Board to appoint Board members for the remainder of the term. In light of this, is this still a problem that the Board continued on with the election and budget adoption without a quorum?

I would say it is illegal.

In our association each "unit" gets 1 vote. Some units are owned individually and some are owned as couples, so the fair thing is to give each unit 1 vote. We also have a registration process where each owner registers/signs-in and there isn't a doubt about the quorum.

I am aware that it is illegal which doesn't sit well for me, but my husband keeps what is the big deal since the Board can just appoint whoever they want in the interim without putting in out for a vote anyways. And the budget would get adopted regardless at the next regular meeting since the reguired quorum for regular meetings is just a majority of the voting members present.

I neglected to say that we also have one vote per house. Our Board did have a sign-in sheet when we entered the room but they didn't check it for cases like this or even if a homeowner was paid up on their dues so that they were eligible to vote.

CathyA3 (Ohio)
Posts: 6,299

Posted:

I think that it was a mistake made in good faith, but it still needs to be corrected. The reason is that without the quorum any actions taken were invalid. It doesn't matter legally whether or not you'd have had the same outcome with or without the quorum.

Fortunately the mistake is easily corrected. Does Maryland allow action without a meeting? Then the board can conduct business if you're running up against a deadline before you have time to schedule another meeting. If it's not an emergency, then schedule the meeting as soon as you can.

(I'm taking your word for it that spouses who are not listed on the deed are not members of the association. This is state-specific. In my state, anyone who is legally married to the person listed on the deed is also considered an owner and a member of the HOA, would count toward quorum and could cast a vote. But they need to be legally married - my state doesn't recognize common law marriage or other domestic partnerships.)

KerryL1 (California)
Posts: 14,550

Posted:

This is unclear: What it a spciela meeting of the Owners? that's what it seemed like, including the mention of proxies. But then it seemed to be a special meeting of the Board.

And who voted for the officers of 1st VP, etc.? That (generally) is only done by the Board.

What size HOA is yours? And how many directors are you supposed to have? Do your bylaws require all those officers?

StacyM5 (Maryland)
Posts: 59

Posted:

Quote:

Posted By CathyA3 on 12/17/2022 11:16 AM
I think that it was a mistake made in good faith, but it still needs to be corrected. The reason is that without the quorum any actions taken were invalid. It doesn't matter legally whether or not you'd have had the same outcome with or without the quorum.

Fortunately the mistake is easily corrected. Does Maryland allow action without a meeting? Then the board can conduct business if you're running up against a deadline before you have time to schedule another meeting. If it's not an emergency, then schedule the meeting as soon as you can.

(I'm taking your word for it that spouses who are not listed on the deed are not members of the association. This is state-specific. In my state, anyone who is legally married to the person listed on the deed is also considered an owner and a member of the HOA, would count toward quorum and could cast a vote. But they need to be legally married - my state doesn't recognize common law marriage or other domestic partnerships.)

I agree with you. I'm sure this mistake was by accident and I'm confident the outcome would be the same.

Maryland says to refer to our bylaws regarding action without a meeting. Our bylaws are silent on action without a meeting, but they do say "Vacancies of any office shall be filled by appointment by the remaining Board Members and the appointee will hold office for the remainder of the unexpired term." So from that wording, I don't think that they would need to call another meeting of the Association since we do not need to vote on it. And it is no emergency at all that we fill these positions. No deadlines looming.

Our bylaws specifically says "Any property owner in XXX Subdivision is eligible for membership in the Association." I can't find anything in the Maryland state laws that say anything different on the topic.

StacyM5 (Maryland)
Posts: 59

Posted:

Quote:

Posted By KerryL1 on 12/17/2022 12:27 PM
This is unclear: What it a spciela meeting of the Owners? that's what it seemed like, including the mention of proxies. But then it seemed to be a special meeting of the Board.

And who voted for the officers of 1st VP, etc.? That (generally) is only done by the Board.

What size HOA is yours? And how many directors are you supposed to have? Do your bylaws require all those officers?

Sorry I was not clear. The Board titled this meeting "Special meeting of Association/Lot Owners. It was the Board that called the meeting.

The members of the Association voted for the officers last night but the Board also sometimes selects people to fill vacant positions without putting it out for a vote of the Association.

Our HOA currently has 98 single family homes but we are still being built out, so when the neighborhood is complete we will have over 260 homes. Our bylaws state that we should have 10 Board members but our Articles of Incorporation states that we just need a minimum of 3. As of today we have 7 Board members. There really is no interest from the community with sitting on our Board.

RogerJ1 (Texas)
Posts: 550

Posted:

Quote:

Posted By StacyM5 on 12/17/2022 9:22 AM

Posted By JohnC73 on 12/17/2022 9:13 AM

Posted By StacyM5 on 12/17/2022 8:47 AM
Our Board called a Special meeting last night to: "Complete election of officers to fill vacant positions; final discussion and vote on revised seslf management 2023 budget; discuss, select and vote on HOA management group to conduct association business if applicable."

It looked like we weren't going to have a quorum, but at the last minute a member walked in so we had exactly the 20% needed to carry on. Late last night well after the meeting was over, it was discovered that we did not have a quorum afterall because 2 of the people in attendence were not actually owners (as required by our bylaws), they were spouses of owners but did not have their name on the deed so they are not eligible for membership in the HOA. Since the spouses that are listed on the deed were not in attendance at the meeting, the Board should have had proxies but they did not give any out, so these two people still went ahead and participated in the voting and meeting without the Board noticing.

FYI - we are having extreme trouble in finding anyone interested in attending Board meetings, let alone finding someone to serve on the Board. Our new 2nd Vice President that was voted in last night is already thinking of stepping down if they can't find anyone to fill the positions of President and 1st Vice President, who stepped down abruptly last night, because he does not want to do public speaking and said this is going to be too much work for him.

Our bylaws do allow for the Board to appoint Board members for the remainder of the term. In light of this, is this still a problem that the Board continued on with the election and budget adoption without a quorum?

I would say it is illegal.

In our association each "unit" gets 1 vote. Some units are owned individually and some are owned as couples, so the fair thing is to give each unit 1 vote. We also have a registration process where each owner registers/signs-in and there isn't a doubt about the quorum.

I am aware that it is illegal which doesn't sit well for me, but my husband keeps what is the big deal since the Board can just appoint whoever they want in the interim without putting in out for a vote anyways. And the budget would get adopted regardless at the next regular meeting since the reguired quorum for regular meetings is just a majority of the voting members present.

The overall Board and the ones appointed are the ones at risk likely. If the Association gets into other trouble, and that meeting is explored and adjudicated as illegal, then the appointed ones would not be Board members which might make their and the whole Board's actions and votes invalid. My point, the Board and those appointees are the ones who should want it to be done right.

KerryL1 (California)
Posts: 14,550

Posted:

Are you on the Board, StacyM?

I'm thinking along Cathy's lines-(including uncertainly about whether the "spouse" is an owner in your state). Just let it be.

I've been on this forum a long time and read a lot of HOA literature. I've rarely seen a board of directors of 10 even for very large communities. No wonder it's difficult to get enough candidates--you're asking 10% of your current HOA to volunteer! What we tend to see for an HOA the size yours is a board of maybe 5. Your Articles take precedence over your Bylaws so I'm thinking your board wants to reduce its size--with its vote--to 3 or 5.

Do your bylaws say that all of the officers you've named or not named are required in your HOA?? And: must the officers be directors?? Because your bylaws sound a little odd, you ought to read your state's corporation codes for nonprofits. It's possible they specify the required number of officers, though they may defer to your bylaws. Normally, HOAs of your current & future size would be only the Prez, VP, sec'y & treasurer.

Are you sure that your Bylaws state that Owners elect officers? That's very unusual. Normally the Board itself (in an open meeting in CA) selects its officers. Candidates can nominate and vote for themselves.

Are you sure you see the difference between directors and officers?

Is your HOA by any chance still under developer control?

StacyM5 (Maryland)
Posts: 59

Posted:

Quote:

Posted By KerryL1 on 12/17/2022 5:33 PM
Are you on the Board, StacyM?

I'm thinking along Cathy's lines-(including uncertainly about whether the "spouse" is an owner in your state). Just let it be.

I've been on this forum a long time and read a lot of HOA literature. I've rarely seen a board of directors of 10 even for very large communities. No wonder it's difficult to get enough candidates--you're asking 10% of your current HOA to volunteer! What we tend to see for an HOA the size yours is a board of maybe 5. Your Articles take precedence over your Bylaws so I'm thinking your board wants to reduce its size--with its vote--to 3 or 5.

Do your bylaws say that all of the officers you've named or not named are required in your HOA?? And: must the officers be directors?? Because your bylaws sound a little odd, you ought to read your state's corporation codes for nonprofits. It's possible they specify the required number of officers, though they may defer to your bylaws. Normally, HOAs of your current & future size would be only the Prez, VP, sec'y & treasurer.

Are you sure that your Bylaws state that Owners elect officers? That's very unusual. Normally the Board itself (in an open meeting in CA) selects its officers. Candidates can nominate and vote for themselves.

Are you sure you see the difference between directors and officers?

Is your HOA by any chance still under developer control?

No, I am not on the Board. At my last HOA in Delaware, I was the Treasurer.

Our HOA bylaws are from 2004 and only 4 pages long. They were written by a general attorney that didn't specialize in HOA, corporate or real estate law. All of our governing documents are skimpy and are silent on many issues. I also know from my previous Boards that 10 is overkill. We will eventually be a community of more than 260 homes. I have mentioned to the Board that we could reduce the size but they don't like change and just want to leave things as they are. Nothing has been changed since inception in 2004. Dues the same, all documents remain unchanged.

Our bylaws don't say that the officers are required. The exact wording is: "The Officers of the Association shall consist of President, 1st Vice President, 2nd Vice President, Corresponding Secretary, Recording Secretary, Assistant Recording Secretary, Treasurer, Finance Secretary, Sergeant-at-Arms, and Chaplain." Most of these positions are not needed in my opinion. Our bylaws do not say if officers must be directors. Yes I know our bylaws are odd. Our state corporate codes say, "All condominium, cooperative, and homeowner associations in Maryland are governed by a board of directors." The state only require 1 officer but our bylaws require a minimum of 3. I thoroughly agree that we only need a President, VP, Secretary and Treasurer. When I mentioned this, I got a lot of push back, because they all said it was too much work for them to do and they need help. My last Board there was only a President, Vice President and Treasurer (me). We made out just fine, with most of the work falling on me and the President. Our VP didn't do much of anything.

This is the exact wording on Nomination and Election of Officers of the Association:

Section 1: At the Winter meeting, the BOard of Officers shall appoint a Nominating Committee which consists of three members of the Association whose duty shall be nomination of candidates for election. The Slate of Officers will be presented at the Spring meeting.

Section 2: The Officers shall be elected at the Spring meeting of the Association by the majority of the voting members present.

Section 3: The term of office shall be one year commencing January 1st.

Section 4: Vacancies of any office shall be filled by appointment by the remaining Board Members and the appointee will hold office for the remainder of the unexpired term.

The Board called a Special meeting to fill these upcoming vacancies on the Board. The asked homeowners that were interested to nominate themselves and also accepted nominations at the meeting from the floor as well.

My understanding of the difference between directors and officers is that directors are elected by the members of the association to serve for specific terms that are contained in the association's bylaws, and the officers are elected by, and serve at the pleasure of, the board of directors. Thus, the officers can be removed and replaced at any time by action of the board. Another distinction is that the officers have no voting rights, whereas the directors do. Our bylaws continually refer to board members as officers, and makes not mention of directors.

Even though our community was started in 2004, it is on its 3rd developer now. The original homeowners did and do not want an HOA so the Board was inactive for over 10 years and started up again almost 3 years ago when our current developer started building here. The builder threatened to start up the HOA with a much higher annual dues if the homeowners didn't get their act together and start up the HOA on their own. Our developer has absolutely no control or involvement with the HOA.

TimB4 (Tennessee)
Posts: 21,062

Posted:

I think the board acted in good faith at the meeting and were likely unaware that the spouses were not technically members.

I expect that the board would honor the election results by technically appointing those individuals who won the election to the vacant (or soon to be vacant) seats.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Stacy

If 98 occupied homes out of a total of 260 homes to be built, I assume the Declarant is still in control. If so, they can change the docs as they wish., Talk to them about changes.

KerryL1 (California)
Posts: 14,550

Posted:

What do your Articles of Incorporation call Board members? Do they also call them "officers" like your Bylaws do? Do your CC&Rs make any mention of a board of directors or officers?

Form your screwy bylaws, I can see now why Owners elect "officers" since the latter are what many HOAs call directors.

StacyM5 (Maryland)
Posts: 59

Posted:

Quote:

Posted By TimB4 on 12/18/2022 5:34 AM
I think the board acted in good faith at the meeting and were likely unaware that the spouses were not technically members.

I expect that the board would honor the election results by technically appointing those individuals who won the election to the vacant (or soon to be vacant) seats.

I agree with you. I think it would be best if the board appointed those individuals to fill the vacancies. And as far as the budget getting approved. Our annual dues are due by Janaury 31st, so it would probably be best and easiest if the Board just approved the budget at the regular board meeting toward the end of January since that meeting the quorum is always reached since the quorum is just a majority of the members present.

StacyM5 (Maryland)
Posts: 59

Posted:

Quote:

Posted By JohnC46 on 12/18/2022 8:41 AM
Stacy

If 98 occupied homes out of a total of 260 homes to be built, I assume the Declarant is still in control. If so, they can change the docs as they wish., Talk to them about changes.

No the Declarant is not in control. You would think that the Declarant would be in control, but that is not the case with our neighborhood because our development was started in 2004 with builder "A'. Builder "A" left the community shortly afterward and after a few years, Builder "B" came in. Builder "B" stayed for about a year and then left. Current builder is Builder "C". Builder "C" was going to revive our HOA which sat dormant for many, many years when they started to build in the development, but the homeowners quickly got together and revived the HOA so the Builder "C" would not have control since Builder "C" wanted to raise the dues from the $50 annual fee of what the HOA was originally paying back in 2004 when it started.

StacyM5 (Maryland)
Posts: 59

Posted:

Quote:

Posted By KerryL1 on 12/18/2022 9:29 AM
What do your Articles of Incorporation call Board members? Do they also call them "officers" like your Bylaws do? Do your CC&Rs make any mention of a board of directors or officers?

Form your screwy bylaws, I can see now why Owners elect "officers" since the latter are what many HOAs call directors.

Our Articles of Incorporation consistently refer to Board members at Directors. No mention of officers in the Articles of Incorporation. Our CC&Rs say "governed by a Board of Directors, in accordance with it's by-laws."

And as you, the bylaws only refer to the Board as Officers.

In all the HOA's I've lived in, I have never seen documents so poorly written, and silent on many issues as well. They really need to be rewritten but the HOA does not have any money for an attorney to handle that.

KerryL1 (California)
Posts: 14,550

Posted:

Your Articles and your CC&Rs, as I wrote above, take precedence over your Bylaws. Since the Articles require a minimum of 3 directors, your Board merely needs to comply and have your required Nominating Committee three directors instead of 10. It's easier not harder.

BUT your other docs do not mention real "officers," only your bylaws do and they say you "shall" have all those listed. Since officers in the normal sense do not have a vote at board meetings, I'd say that the Board simply leave many of these goofy "offices" vacant.

StacyM5 (Maryland)
Posts: 59

Posted:

Quote:

Posted By KerryL1 on 12/19/2022 9:31 AM
Your Articles and your CC&Rs, as I wrote above, take precedence over your Bylaws. Since the Articles require a minimum of 3 directors, your Board merely needs to comply and have your required Nominating Committee three directors instead of 10. It's easier not harder.

BUT your other docs do not mention real "officers," only your bylaws do and they say you "shall" have all those listed. Since officers in the normal sense do not have a vote at board meetings, I'd say that the Board simply leave many of these goofy "offices" vacant.

I see what you are saying and agree with you. Problem is that our current Board members want every single vacant position filled with whomever they can get to do the job because the current board members argue that it will put too much work on them not to have each position filled. This is why they don't enforce any rules or put effort into collecting dues - too much work they say.

The outgoing President has just said that it is not a big deal that our Special meeting didn't have a quorum afterall. She said it is not her problem since she is stepping down on December 31st, and is leaving it on record that we did have a quorum even though we clearly didn't.