William-Douglas

Quorum

A quorum is the number of members required to be present before a meeting can legally be conducted. Quorums are necessary for annual membership meetings and board of directors meetings. If HOA business is to be conducted, special membership meetings would require a quorum as well.

 

For board of directors meetings, unless the bylaws or possibly the articles of incorporation state differently, a quorum is a majority of the board members. Membership meeting quorums can be almost any percentage of the membership. Membership meeting quorum requirements can range from as little as 5% up to 75%, with typical HOAs being in the 10% to 20% range.

 

Special membership meetings may have a higher quorum requirement than an annual meeting. This is typical when special meetings are held to raise dues or vote on a special assessment.   This higher quorum threshold is especially common if the annual meeting quorum requirement are exceptionally low.

 

The purpose or necessity of having a certain quorum percentage, is to confer decisions made in a meeting the authority to be binding. Thus if a quorum is not present no HOA business can legally be conducted. If business is conducted, such as board elections, these elections can rightly be challenged as improper. Any decisions these “board members” make would be illegitimate and as a consequence would delegitimize any decisions that a properly elected board member would make.

 

A proxy is authorization from an HOA member to another party, not necessarily another HOA member, to act or vote in their place. Unless the governing documents prohibit a proxy’s use, proxies can be used for annual membership or special membership meetings to help establish a quorum. However, proxies cannot be used for board of director meetings since this would constitute a delegation of fiduciary responsibilities that cannot be delegated.

 

If the meeting quorum is difficult to obtain because of a high percentage requirement, a common acceptable means to help meet quorum is the “member in good standing” provision found in many governing documents. This provision will often have wording similar to: “A Member shall be considered to be a “Member in Good Standing” if such Member is not past dues in their assessment or not in litigation with the HOA.” In the section of an HOA’s governing documents regarding membership voting rights and other sections, there many times will be wording similar to: “Only members in good standing are permitted to participate in the annual meeting.” This can reduce a quorum requirement by reducing the number of homes that are factored in to the quorum.

 

For example, in a 100 home HOA the quorum requirement is 25%, which equates to 25 members in person or by proxy for a quorum. If 10 members of the HOA are not in good standing, this quorum is factored on 90 homes instead of 100, which reduces the required number from 25 members to 23 members to constitute a quorum. If the governing documents are not clear on which members can and cannot vote, the HOA’s attorney should be consulted for clarification.

Another possible solution to high quorum requirements is if the annual meeting provision in an HOA’s governing documents allows for subsequent annual meetings. This provision allows for follow up annual meetings at a lower quorum requirement if a quorum is not obtained at the initial annual meeting. If there is such a prevision the quorum is usually halved on subsequent annual meeting attempts.

 

Interesting if there is no specific percentage quorum requirement addressed in an HOA’s governing documents and no state statute provides guidance the quorum defaults to 51%.

 

 

Copyright 2018 William Douglas Management, Inc.