Question again on our bylaws: Did quorum change?

TimB4 (Tennessee)
Posts: 21,062

Posted:

Our quorum for meetings is very high (2/3), something I hope to change when I'm on the board.

That said, the quorum requirement does specify "except as otherwise provided in these bylaws"

The amendment section states:

Except as otherwise provided herein, these By-laws may be amended, at a regular or special meeting of the Members, by a vote of a majority of each class of members present in person or by proxy, provided that any matter which is governed by the Declaration of Covenants and Restrictions applicable to the properties may not be amended except as provided in such Declaration of Covenants Conditions and Restrictions.

Yes, I know, badly worded.

My question is: Could it be interpreted within this language that a quorum to amend the bylaws would become a majority (vs. 2/3) or perhaps simply be waived and the quorum becomes whomever shows up to the meeting?

I'm positive I know the answer. However, I ask, because it appears past practice has chosen such interpretation.

AidylP1 (California)
Posts: 173

Posted:

I have never seen a quorum that high, but it would take a majority of both classes to amend if the developer is still in control.

TimB4 (Tennessee)
Posts: 21,062

Posted:

developer is not in control, only one class of membership.

ElleN (Idaho)
Posts: 4,420

Posted:

It appears to me that the bylaw quoted above conflicts with the Tn nonprofit corporation act. From Tenn. Code § 48-60-202 (b):

(b) A corporation's members may amend or repeal the corporation's bylaws even though the bylaws may also be amended or repealed by its board of directors. An amendment to the bylaws shall be approved by members by two thirds (2/3) of the votes cast or a majority of the voting power, whichever is less. An amendment to the bylaws which relates solely to the dues required for membership and which establishes or changes a specific amount for dues shall be approved by a majority of the members present and voting unless the charter or bylaws specify a higher voting percentage.

More at https://casetext.com/statute/tennessee-code/title-48-corporations-and-associations/nonprofit-corporations/chapter-60-amendment-of-charter-and-bylaws/part-2-amendment-of-bylaws/section-48-60-202-amendment-of-bylaws-by-board-of-directors-or-members

Because of the conflict, I think what the bylaw says is n/a, and the statute controls.

I think a meeting of the members is not even necessary.

Per other sections of the statute, I also think the board by itself can amend the bylaws. Granted this may not go over well with the owners.

It seems clear that the Tennessee legislature wanted to make amendment of the bylaws easy.

TimB4 (Tennessee)
Posts: 21,062

Posted:

Quote:

Posted By ElleN on 10/09/2023 12:20 PM
[emphasis added]

It appears to me that the bylaw quoted above conflicts with the Tn nonprofit corporation act. From Tenn. Code § 48-60-202 (b):

(b) A corporation's members may amend or repeal the corporation's bylaws even though the bylaws may also be amended or repealed by its board of directors. An amendment to the bylaws shall be approved by members by two thirds (2/3) of the votes cast or a majority of the voting power, whichever is less. An amendment to the bylaws which relates solely to the dues required for membership and which establishes or changes a specific amount for dues shall be approved by a majority of the members present and voting unless the charter or bylaws specify a higher voting percentage.

Because of the conflict, I think what the bylaw says is n/a, and the statute controls.

I think a meeting of the members is not even necessary.

Per other sections of the statute, I also think the board by itself can amend the bylaws. Granted this may not go over well with the owners.

It seems clear that the Tennessee legislature wanted to make amendment of the bylaws easy.

I appreciate this citation.

I do believe that a meeting is required.

I agree that the 2/3 of the vote cast supersedes the simple majority of votes cast (as outlined in the bylaw citation).

The question is about the quorum needed.

Can the bylaw citation be interpreted as lowering the quorum to members present (in person or by proxy) or does it stay at 2/3 as outlined earlier for meetings?

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By TimB4 on 10/09/2023 12:30 PM

Posted By ElleN on 10/09/2023 12:20 PM
[emphasis added]

It appears to me that the bylaw quoted above conflicts with the Tn nonprofit corporation act. From Tenn. Code § 48-60-202 (b):

(b) A corporation's members may amend or repeal the corporation's bylaws even though the bylaws may also be amended or repealed by its board of directors. An amendment to the bylaws shall be approved by members by two thirds (2/3) of the votes cast or a majority of the voting power, whichever is less. An amendment to the bylaws which relates solely to the dues required for membership and which establishes or changes a specific amount for dues shall be approved by a majority of the members present and voting unless the charter or bylaws specify a higher voting percentage.

Because of the conflict, I think what the bylaw says is n/a, and the statute controls.

I think a meeting of the members is not even necessary.

Per other sections of the statute, I also think the board by itself can amend the bylaws. Granted this may not go over well with the owners.

It seems clear that the Tennessee legislature wanted to make amendment of the bylaws easy.

I appreciate this citation.

I do believe that a meeting is required.

I agree that the 2/3 of the vote cast supersedes the simple majority of votes cast (as outlined in the bylaw citation).

The question is about the quorum needed.

Can the bylaw citation be interpreted as lowering the quorum to members present (in person or by proxy) or does it stay at 2/3 as outlined earlier for meetings?

I am confused. Are you referring to the bylaw that addresses amending the bylaws? Are you trying to figure out what is necessary to amend the bylaws (including what, if any, quorum requirement there is)?

TimB4 (Tennessee)
Posts: 21,062

Posted:

This whole issue goes a round and a round - everything being related to something else.

Let me rephrase:

Statute defers control of quorum requirement to bylaws.

The Bylaws specify a quorum of 2/3 of the membership but also defers to anywhere else in bylaws concerning quorum requirement.

My Association is of the opinion that the membership can amend the bylaws with a simple majority of the votes cast at a meeting.

My Association has amended the bylaws based on this opinion.

Per records on the Bylaws, there was not a quorum of 2/3 of the membership.

Hence, could the language my association used specifying how to amend be interpreted as having lowered the quorum to (I suppose) zero?

I'm fairly confident the section does not lower the quorum.
However, as we found out, there are different schools of thought on amending covenants. So, I'm open to the fact that I may be misunderstanding the bylaws section along with giving wiggle room for the past interpretation as I bring this issue up with the current board (I don't sit on the board until January).

In general, there are a lot of issues where the governing docs do not follow statutes. The language associated with membership (that I brought up on a previous thread) goes a lot to this. Our current directors are going on past history of what they understood in legal opinions (mind you I don't know if the opinions are written or verbal).

My goal is to amend and restate the bylaws to remove a lot of the gray area, bring them into compliance of current statutes (many of which were current when the initial bylaws were written) and try to write them to how things have been done in the past (vs. changing them outright which I don't think I'll get support for).

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By TimB4 on 10/09/2023 12:30 PM
I appreciate this citation.

I do believe that a meeting is required.

I agree that the 2/3 of the vote cast supersedes the simple majority of votes cast (as outlined in the bylaw citation).

The question is about the quorum needed.

Can the bylaw citation be interpreted as lowering the quorum to members present (in person or by proxy) or does it stay at 2/3 as outlined earlier for meetings?

Oops; I see now you are quoting the statute section. From the statute section, for an amendment unrelated to dues (emphasis added):

An amendment to the bylaws shall be approved by members by two thirds (2/3) of the votes cast or a majority of the voting power, whichever is less.

I do not see how the 2/3rds supersedes the majority. To me what controls is "whichever is less."

Examples for a 20-member HOA:

Ten members vote, seven in favor of the amendment. The amendment passes.

Twenty members vote, with 11 in favor of the amendment. The amendment passes.

One of the reasons I do not think a meeting is required is because the bylaw say these bylaws "may" be amended et cetera. The bylaw does not require a meeting, IMO.

If the board feels an owners' meeting is required for amending the bylaws, then because of the statute section, and as of this writing, I do not think there is any quorum requirement. In other words, I think the president calls the owners' meeting to order, quorum need //not// be identified, and ballots are cast. A ballot count of the "in favors" and "againsts" is done, and if the count meets the requirements of the statute section, then the amendment passes.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By TimB4 on 10/09/2023 12:55 PM

Let me rephrase:

Statute defers control of quorum requirement to bylaws.

The Bylaws specify a quorum of 2/3 of the membership but also defers to anywhere else in bylaws concerning quorum requirement.

My Association is of the opinion that the membership can amend the bylaws with a simple majority of the votes cast at a meeting.

Because of what the statute section says, I disagree with the Association (meaning presumably the current board and prior boards).

Quote:

Posted By TimB4 on 10/09/2023 12:55 PM
My Association has amended the bylaws based on this opinion.

Per records on the Bylaws, there was not a quorum of 2/3 of the membership.

If the statute section I quoted above did not exist, then I agree a failure to meet the 2/3rds quorum requirement means no action by the owners is allowed. In other words, and again assuming the statute section did not exist, IMO you are correct: the quorum requirement still applies to meetings where amendments were voted on.

TimB4 (Tennessee)
Posts: 21,062

Posted:

Concerning needing a meeting:

Granted, Per Statute 48-57-104. action can be taken without a meeting but it becomes more difficult.

Additionally per the Bylaws:

Quote:

Posted By TimB4 on 10/09/2023 11:01 AM

The amendment section states:

Except as otherwise provided herein, these By-laws may be amended, at a regular or special meeting of the Members, by a vote of a majority of each class of members present in person or by proxy, provided that any matter which is governed by the Declaration of Covenants and Restrictions applicable to the properties may not be amended except as provided in such Declaration of Covenants Conditions and Restrictions.

Based on past practices, I think if I tried to amend without a meeting there would be issues that can be avoided simply by having a meeting.

Regardless of having a meeting or not, quorum must be obtained.

TimB4 (Tennessee)
Posts: 21,062

Posted:

Looks like our posts crossed each other.

I'm of the opinion that whomever wrote and whomever verified the bylaws didn't put enough attention to detail to it and they simply don't understand what a quorum is, why it's required or what it allows/prevents from happening.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By TimB4 on 10/09/2023 1:24 PM
Concerning needing a meeting:

Granted, Per Statute 48-57-104. action can be taken without a meeting but it becomes more difficult.

Got it. I just reviewed 48-57-104. Yes, I suppose it is saying that all members have to consent to taking an action without a meeting. As you say above, this makes things more difficult.

Quote:

Posted By TimB4 on 10/09/2023 1:24 PM

Additionally per the Bylaws:

Posted By TimB4 on 10/09/2023 11:01 AM

The amendment section states:

Except as otherwise provided herein, these By-laws may be amended, at a regular or special meeting of the Members, by a vote of a majority of each class of members present in person or by proxy, provided that any matter which is governed by the Declaration of Covenants and Restrictions applicable to the properties may not be amended except as provided in such Declaration of Covenants Conditions and Restrictions.

Based on past practices, I think if I tried to amend without a meeting there would be issues that can be avoided simply by having a meeting.

I agree: Because of 48-57-104, have the meeting.

Quote:

Posted By TimB4 on 10/09/2023 1:24 PM

Regardless of having a meeting or not, quorum must be obtained.

I now see 48-57-204. Did you allude to this above, without naming it? Regardless, 48-57-204 speaks of a quorum requirement. I now agree that quorum must be reached for owners to lawfully vote on a bylaw amendment at an owners' meeting.

Section 48-57-203 also seems relevant.

TimB4 (Tennessee)
Posts: 21,062

Posted:

Quote:

Posted By ElleN on 10/09/2023 1:42 PM

Posted By TimB4 on 10/09/2023 1:24 PM

Regardless of having a meeting or not, quorum must be obtained.

I now see 48-57-204. Did you allude to this above, without naming it? Regardless, 48-57-204 speaks of a quorum requirement. I now agree that quorum must be reached for owners to lawfully vote on a bylaw amendment at an owners' meeting.

Section 48-57-203 also seems relevant.

No, I didn't elude to it.

I went with the general understanding of quorums.
It is nice that TN codified it.

Helps when I meet with the current board.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By TimB4 on 10/09/2023 2:02 PM

I went with the general understanding of quorums.

I hear you. But given 48-60-202's vagueness about whether a meeting has to be done (for the owners to amend the bylaws), I too feel better knowing what 48-57-204 says about owner meetings, action taken at owner meetings and a quorum requirement.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

When we wanted to drop our Quorum from 50% to 20% our attorney said we would have to vote on it as we would on any Bylaw change which was 50% of all owners must approve. No matter how we explained it, some just did not understand. Some thought we were going to 20% for any Bylaw changes. We squeezed by with about 55% approving.