Assessment election 11/27/23

Started by TerriS6 • 117 replies • 966 views

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TerriS6 (California)
Posts: 3,284

Posted:

The board approved a contract with inspector of elections on 10/12/23 to increase assessment by 58% claiming the court had ordered the board to revert to 2021 assessment, a false statement. I just looked on IOE website and there is a notice of election dated 10/20/23 but we have received no notice and no notice has been posted. The election is 11/27/23.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Better start suing now. How do you know not posted or notified? You did put yourself on the pretty much do not contact list..

Former HOA President

TerriS6 (California)
Posts: 3,284

Posted:

Re-reading our election rules, they are already in violation for not sending 30 required notice about ballot procedure and voting qualification prior to distributing ballots which arrive today.

ElleN (Idaho)
Posts: 4,420

Posted:

October has 31 days in it. If the materials are sent either today or tomorrow, I think the 30-day statutory requirement will have been met.

TerriS6 (California)
Posts: 3,284

Posted:

The ballot arrives today. Our rules require an extra notice as for director elections but the law doesn't require it so our rules don't matter. In their cover letter to members that's on the IOE website, they lied about why assessments were ruled invalid and they lied saying the court ordered them to revert to a prior year's amount. Lying to them is 2nd nature.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By TerriS6 on 10/27/2023 8:36 AM
The ballot arrives today. Our rules require an extra notice as for director elections but the law doesn't require it so our rules don't matter.

As a possible litigation issue, I do not know if violating the HOA-prepared rules matters. I suspect it does. I just did not want to get into the HOA-prepared rules because I do not have the rules in front of me.

TerriS6 (California)
Posts: 3,284

Posted:

Here is the part describing notice. I think 5115a cancels it out. But it says procedure for nominations so I'm not sure.

"ARTICLE IV: BALLOTS AND PROXIES
4.1 Notice. At least thirty (30) days before ballots are distributed, the Association shall provide, or cause to be provided by the inspector, notice to the Members as follows:
a. b.
Notice Contents. (i) The date and time by which, and the physical address where, ballots are to be returned by mail or handed to the inspector, (ii) the date, time, and location of the meeting at which ballots will be counted, and (iii) the names of all candidates that will appear on the ballot.
Delivery. The notice provided by this section must be given as follows:"

TerriS6 (California)
Posts: 3,284

Posted:

Can the IOE count the ballots on Zoom or does she have to count them in person at the meeting?

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By TerriS6 on 10/27/2023 10:15 AM
Here is the part describing notice. I think 5115a cancels it out. But it says procedure for nominations so I'm not sure.

"ARTICLE IV: BALLOTS AND PROXIES
4.1 Notice. At least thirty (30) days before ballots are distributed, the Association shall provide, or cause to be provided by the inspector, notice to the Members as follows:
a. b.
Notice Contents. (i) The date and time by which, and the physical address where, ballots are to be returned by mail or handed to the inspector, (ii) the date, time, and location of the meeting at which ballots will be counted, and (iii) the names of all candidates that will appear on the ballot.
Delivery. The notice provided by this section must be given as follows:"

It looks to me like the board (or whoever wrote this rule) was aiming to imitate statute section 5115, but forgot to add the statute section's qualifiers about this requirement pertaining only to director elections and recall elections.

I do not think 5115 cancels this out. Maybe a court would enforce this board-created rule. However this is not a battle I would choose to begin. Assuming the board can justify the assessment increase with hard numbers (dollar figures), I do not like pushing boards around when it comes to budgets (and so setting the assessment).

TerriS6 (California)
Posts: 3,284

Posted:

The board's letter contained with the ballot is misleading. It claims the court order the association to revert to the 2021 assessment amount for 2024. Totally false.

TerriS6 (California)
Posts: 3,284

Posted:

My board is crazy! In the ballot mailer they say a majority of a member quorum passes the assessment increase instead of a majority of the membership which our Declaration requires.

TerriS6 (California)
Posts: 3,284

Posted:

Oops I guess I'm wrong. Dark clouds above.

AidylP1 (California)
Posts: 173

Posted:

For increases in assessments over 20% and special assessments over 5%, require just a majority of quorum, that being 50+1.

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By AidylP1 on 10/27/2023 2:56 PM
For increases in assessments over 20% and special assessments over 5%, require just a majority of quorum, that being 50+1.

Thanks. At first I didn’t see the “notwithstanding” because our Declaration required a majority of the membership.

TerriS6 (California)
Posts: 3,284

Posted:

So if there are 100 lots/votes, and a quorum is 51 lots/votes, a majority of a quorum would be 26? What if 26 vote yes and 36 vote no?

AidylP1 (California)
Posts: 173

Posted:

Then the outcome would be NO.

TerriS6 (California)
Posts: 3,284

Posted:

Thank you. We've only had a director election so far. I still think the language is a bit confusing.

AidylP1 (California)
Posts: 173

Posted:

Quote:

Posted By TerriS6 on 10/27/2023 4:02 PM
Thank you. We've only had a director election so far. I still think the language is a bit confusing.

The language is very clear:

5. Majority of a Quorum. A majority of a quorum of the members is defined to mean approved or ratified by an affirmative vote of a majority of the votes represented and voting in a duly held election in which a quorum is represented, which affirmative votes also constitute a majority of the required quorum. (Civ. Code § 4070.)

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By TerriS6 on 10/27/2023 1:16 PM
My board is crazy! In the ballot mailer they say a majority of a member quorum passes the assessment increase instead of a majority of the membership which our Declaration requires.

I think you should gather opinions on this situation. The wording in the statute is peculiar to me. From California statutes 5605(b):

(b) Notwithstanding more restrictive limitations placed on the board by the governing documents, the board may not impose a regular assessment that is more than 20 percent greater than the regular assessment for the association’s preceding fiscal year or impose special assessments which in the aggregate exceed 5 percent of the budgeted gross expenses of the association for that fiscal year without the approval of a majority of a quorum of members, pursuant to Section 4070, at a member meeting or election.

I do not think the statute section is saying that the more restrictive limitations in the Declaration go away. To me, all the "notwithstanding" means is that what the statute says subsequently is the minimum requirements for passing an assessment increase. The governing docs may have more requirements.

Note the absence of a "shall" in the statute section above.

Consequently my interpretation of this is that two things have to happen:

1.
Per the Declaration, a majority of the membership must approve the increase.
They might do this by absentee ballot, without a meeting.

2.
Per the statute, a majority of a quorum of members has to approve the increase.

I would like to see other people's interpretations.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By TerriS6 on 10/27/2023 3:25 PM
So if there are 100 lots/votes, and a quorum is 51 lots/votes, a majority of a quorum would be 26? What if 26 vote yes and 36 vote no?

Like Lydia posted, the assessment increase fails. From the statute section itself:

Civil Code § 4070. Approval by Majority of a Quorum Defined.

If a provision of this act requires that an action be approved by a majority of a quorum of the members, the action shall be approved or ratified by an affirmative vote of a majority of the votes represented and voting in a duly held election in which a quorum is represented, which affirmative votes also constitute a majority of the required quorum.

AidylP1 (California)
Posts: 173

Posted:

First, it's no Lydia!

Second, state statute §5605(b) takes precedence.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By AidylP1 on 10/27/2023 5:02 PM

Second, state statute §5605(b) takes precedence.

The statute takes precedence when there is a genuine conflict with the covenants. I am not seeing a conflict. (Conflict has a specific meaning here. In other words, just because the covenant says something different does not mean a conflict exists.)

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By ElleN on 10/27/2023 5:06 PM

Posted By AidylP1 on 10/27/2023 5:02 PM

Second, state statute §5605(b) takes precedence.

What do you mean?

ElleN (Idaho)
Posts: 4,420

Posted:

Terri, hypothetical example of what I mean:

Statute says:
Proposed amendments of covenants that pertain to xyz shall have the approval of at least 67% (eighty percent) of owners to pass.

Covenant says:
Proposed amendments of covenants that pertain to xyz shall have the approval of at least 75% (seventy-five percent) of owners to pass.

Is there a conflict? No. If the HOA enforces the covenant, then any proposed amendment that has the support of 75% or more of the owners will be lawful under both the covenants and under the statute. This is despite the fact that the statute and covenant are not identical.

Back to the actual statute with the "notwithstanding" here: I keep flip-flopping on the point. Your declaration does have a more restrictive limitation (requiring over half of all owners to support a proposed assessment increase over 20% for the increase to become effective) vis-a-vis the statute section (requiring over half of a quorum, pursuant to 4070's definition of 'over half of a quorum'). But then the meaning of the phrase "may not," in context, throws me for a loop.

I wish the statute section said something more like: Notwithstanding more restrictive limitations in the governing documents: (1) An assessment increase of less than 20%, that is supported by a board majority, shall be valid and shall not require a vote of the owners; and (2) an assessment increase of 20% or more, that is supported by a board majority, shall be valid only when a majority of a quorum of owners votes to support the (20% or more) increase.

Maybe your board has it right. Still, without a court precedent, I just do not feel good about this. Similarly, this thread from 15 years ago went back and forth on the gist of this without reaching a consensus: https://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/37704/view/topic/Default.aspx

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By ElleN on 10/28/2023 1:42 AM
Terri, hypothetical example of what I mean:

Statute says:
Proposed amendments of covenants that pertain to xyz shall have the approval of at least 67% (eighty percent) of owners to pass.

Covenant says:
Proposed amendments of covenants that pertain to xyz shall have the approval of at least 75% (seventy-five percent) of owners to pass.

Is there a conflict? No. If the HOA enforces the covenant, then any proposed amendment that has the support of 75% or more of the owners will be lawful under both the covenants and under the statute. This is despite the fact that the statute and covenant are not identical.

Back to the actual statute with the "notwithstanding" here: I keep flip-flopping on the point. Your declaration does have a more restrictive limitation (requiring over half of all owners to support a proposed assessment increase over 20% for the increase to become effective) vis-a-vis the statute section (requiring over half of a quorum, pursuant to 4070's definition of 'over half of a quorum'). But then the meaning of the phrase "may not," in context, throws me for a loop.

I wish the statute section said something more like: Notwithstanding more restrictive limitations in the governing documents: (1) An assessment increase of less than 20%, that is supported by a board majority, shall be valid and shall not require a vote of the owners; and (2) an assessment increase of 20% or more, that is supported by a board majority, shall be valid only when a majority of a quorum of owners votes to support the (20% or more) increase.

Maybe your board has it right. Still, without a court precedent, I just do not feel good about this. Similarly, this thread from 15 years ago went back and forth on the gist of this without reaching a consensus: https://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/37704/view/topic/Default.aspx

Thank you. It could have been written better for sure. I think the "may" is there because increasing assessments up to 20% is a discretionary decision but it is clear about the percentage needed to pass.

TerriS6 (California)
Posts: 3,284

Posted:

Here is a question where the number of lots/votes is odd: if there are 101 lots, is the quorum 51 or 52?

TerriS6 (California)
Posts: 3,284

Posted:

This explains the problem I was having. I've also found conflicting arguments on counting fractions to make a quorum.

From A/S Poorly Worded Provisions. Some documents contain poorly (ambiguously) worded provisions that produce unintended results if followed literally. For each example, assume a 100-unit association voting for a special assessment where quorum is a majority of members represented in person, proxy or ballot.

a. Approval by a "majority of a quorum" could mean that if 100 votes are cast with 26 in favor (a majority of a quorum) and 74 against, the measure passes.

b. Approval by a "majority of the votes cast" could mean that a meeting with 51 member attendees where one member votes in favor and the other 50 abstain, the measure passes.

c. Approval by a "majority of members present and voting" could give the same erroneous results as b.

Recommendation: Because each of the poorly drafted provisions produces unintended consequences, they should be treated as approval by the "affirmative vote of a majority of members represented at the meeting once a quorum has been established." That means in an association of 100 members at least 51 must be represented (in person, by proxy and/or by ballot) before a vote can be taken. Once a quorum is present at least a majority must approve the action. If 51 are present, 26 must approve. If 80 are present, 41 must approve, etc. Finally, boards should consider amending their documents to eliminate such problems.

TerriS6 (California)
Posts: 3,284

Posted:

Our Declaration says as to votes: "will require a majority vote which excludes all votes of the Declarant his successor in interest." So it seems the whole votes are contemplated. Then what happens when 51% results in a fraction. It seems you would have to round it up?

TerriS6 (California)
Posts: 3,284

Posted:

Our election rules:

4.2 Voting Rights.
Number of Votes. Each Member shall be entitled to one (1) vote per Separate Interest owned on all matters presented for a membership vote.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By TerriS6 on 10/28/2023 6:03 AM
Here is a question where the number of lots/votes is odd: if there are 101 lots, is the quorum 51 or 52?

If 5605(c) applies, then quorum is "more than 50% of owners." Fifty percent of 101 is 50.5. Since it is not possible to have half an owner at your HOA*, quorum is met when at least 51 owners attend (in person or by proxy) or possibly by absentee ballot.

*Some condominiums declarations assign fractional votes to their units. Under these conditions it is possible that the percent participating in an election is, say, exactly 50.7, or some other number that is not a whole number.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By TerriS6 on 10/28/2023 6:24 AM
This explains the problem I was having. I've also found conflicting arguments on counting fractions to make a quorum.

From A/S Poorly Worded Provisions. Some documents contain poorly (ambiguously) worded provisions that produce unintended results if followed literally. For each example, assume a 100-unit association voting for a special assessment where quorum is a majority of members represented in person, proxy or ballot.

a. Approval by a "majority of a quorum" could mean that if 100 votes are cast with 26 in favor (a majority of a quorum) and 74 against, the measure passes.

Section 5605(b), last sentence, directs the reader to 4070. Section 4070 says a "majority of a quorum" is "an affirmative vote of a majority of the votes represented and voting in a duly held election in which a quorum is represented, which affirmative votes also constitute a majority of the required quorum." Hence in this scenario (with 100 votes cast and quorum met), "majority of quorum" occurs when at least 51 votes are in favor.

Quote:

Posted By TerriS6 on 10/28/2023 6:24 AM

Recommendation: Because each of the poorly drafted provisions produces unintended consequences, they should be treated as approval by the "affirmative vote of a majority of members represented at the meeting once a quorum has been established." That means in an association of 100 members at least 51 must be represented (in person, by proxy and/or by ballot) before a vote can be taken. Once a quorum is present at least a majority must approve the action. If 51 are present, 26 must approve. If 80 are present, 41 must approve, etc.

I agree.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By TerriS6 on 10/28/2023 6:34 AM
Our Declaration says as to votes: "will require a majority vote which excludes all votes of the Declarant his successor in interest." So it seems the whole votes are contemplated. Then what happens when [ElleN edit: 50%] results in a fraction. It seems you would have to round it up?

When only whole numbers of votes are possible, yet the calculation of quorum (pursuant to 5605) results in 50% being a non-whole number, then one has to focus on the "more than" in 5605(c). In short, yes, mathematically this ends up rounding up the non-whole number.

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By ElleN on 10/28/2023 7:40 AM

Thank you. And as brought out previously, 5605c says a quorum means more than 50% of the members, there is no such thing as a fractional member.

TerriS6 (California)
Posts: 3,284

Posted:

Thanks, everybody. Aside from the notice issue, the bigger issue is "majority of a quorum" because the board is using an incorrect number for a quorum. They are using 51% of an uneven number which results in a fraction which they have rounded down. The result is the rounded down number is less than a majority. As ElleN wrote, it has to be rounded up.

TerriS6 (California)
Posts: 3,284

Posted:

Another issue: our election rules state: "For all elections, the ballot shall contain the date and time that the initial balloting period will close, the quorum requirement, and a statement that the balloting period may be extended if sufficient ballots have not been received to establish a quorum."

BUT the election notice adds another sentence: If the board extends the balloting period, the Association may mail new ballots to members who have not previously returned a properly completed ballot."
Even an improperly completed ballot counts to establish a quorum and ballots are irrevocable. More funny business?

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By TerriS6 on 10/28/2023 9:38 AM
the bigger issue is "majority of a quorum" because the board is using an incorrect number for a quorum. They are using 51% of an uneven number which results in a fraction which they have rounded down. The result is the rounded down number is less than a majority. As ElleN wrote, it has to be rounded up.

They are supposed to use 50%, not 51%., and then proceed as you describe. Depending on the number of lots, this can also make a difference in what the quorum number is.

TerriS6 (California)
Posts: 3,284

Posted:

67 lots/votes

ElleN (Idaho)
Posts: 4,420

Posted:

So to review:

67 lots * 50% = 33.5

A non-whole number of votes is not possible.

33 votes is not enough for quorum.

34 or more votes meets the quorum requirement for an owners' vote on an assessment increase in excess of 20%.

If the yokels on the board used 51% and rounded down, then they would also come up with 34 votes as the minimum, by coincidence.

Someone double check me. I am old.

TerriS6 (California)
Posts: 3,284

Posted:

34 is less than a majority of lots/votes no matter how you figure it.

AidylP1 (California)
Posts: 173

Posted:

Quote:

Posted By TerriS6 on 10/28/2023 12:48 PM
34 is less than a majority of lots/votes no matter how you figure it.

Actually, 34 IS a majority.

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By AidylP1 on 10/28/2023 12:56 PM

Posted By TerriS6 on 10/28/2023 12:48 PM
34 is less than a majority of lots/votes no matter how you figure it.

Actually, 34 IS a majority.

How do you calculate that?

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By TerriS6 on 10/28/2023 12:48 PM
34 is less than a majority of lots/votes no matter how you figure it.

Pardon? I think there is some kind of math-related miscommunication here. What do you say is the minimum number to achieve a majority for 67 lots, with each lot having one vote?

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By ElleN on 10/28/2023 1:04 PM

Posted By TerriS6 on 10/28/2023 12:48 PM
34 is less than a majority of lots/votes no matter how you figure it.

Pardon? I think there is some kind of math-related miscommunication here. What do you say is the minimum number to achieve a majority for 67 lots, with each lot having one vote?

TerriS6 (California)
Posts: 3,284

Posted:

50% of lots is 33.5 plus one vote is 34.5. 34 is less than majority needed so you can’t round down.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

I see what is happening. 50% of 67 lots is 33.5 and should be rounded up to 34 for a majority thus 34 for a majority. Terri is claiming it needs to go to 35 for a majority. I say 34.

AidylP1 (California)
Posts: 173

Posted:

Quote:

Posted By TerriS6 on 10/28/2023 1:00 PM

Posted By AidylP1 on 10/28/2023 12:56 PM

Posted By TerriS6 on 10/28/2023 12:48 PM
34 is less than a majority of lots/votes no matter how you figure it.

Actually, 34 IS a majority.

How do you calculate that?

Simple Majority Defined. Unless defined differently by an association's governing documents, the word "majority" means more than half. It does not mean 51% nor does it mean 50% + 1. This distinction is especially important for those associations that utilize half votes or fractional voting. For those associations that use whole votes; "majority" means the next highest whole number above 50%. If an association has 11 members, 50% is 5.5 which, when rounded up, produces a majority of 6. (Robert’s Rules , 11th ed., p. 400). The 50% + 1 formula would produce an erroneous result, i.e., 50% of 11 is 5.5 +1 = 6.5 which, when rounded, produces 7 instead of the proper result 6.

I happen to conduct HOA elections

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By JohnC46 on 10/28/2023 1:19 PM
I see what is happening. 50% of 67 lots is 33.5 and should be rounded up to 34 for a majority thus 34 for a majority. Terri is claiming it needs to go to 35 for a majority. I say 34.

A half member or half ballot doesn’t count. 34 is below the minimum for majority votes.

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By AidylP1 on 10/28/2023 1:27 PM

Posted By TerriS6 on 10/28/2023 1:00 PM

Posted By AidylP1 on 10/28/2023 12:56 PM

Posted By TerriS6 on 10/28/2023 12:48 PM
34 is less than a majority of lots/votes no matter how you figure it.

Actually, 34 IS a majority.

How do you calculate that?

We have whole members and whole votes, no fractions.

TerriS6 (California)
Posts: 3,284

Posted:

See Robert's Rules website FAQ #5 https://robertsrules.com/frequently-asked-questions/

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By TerriS6 on 10/28/2023 1:08 PM
50% of lots is 33.5 plus one vote

This is how certain people here have expressed what a majority is. It is not accurate. The correct number is 34. Here is yet another reason why:

34 / 67 = 50.7%. This is greater than 50%.

33 / 67 = 49.3%. This is less than 50%.

Since quorum is defined as more than 50% here, 34 is the correct number for quorum.

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