A lot of homeowners associations find it hard to reach an HOA quorum. Does that mean quorums are bad and need to be eliminated? Is that even a possibility?
What Is an HOA Quorum?
A quorum is the minimum number of members required to be present at a meeting before the HOA can conduct business. This can apply to both a board meeting and an annual meeting.
The parameters of a quorum can differ from one association to another. Some HOAs require a certain percentage of owners or board members, while others define a specific number. You will typically find your association’s requirements for a quorum within your bylaws or CC&Rs.
In some cases, an association’s governing documents will not define its quorum requirements. This is where state laws come in. In most states, like California, one-third of the voting power of an HOA makes a quorum. Keep in mind, though, that this provision can vary from state to state. Therefore, you must make sure to check your state laws or consult an attorney for guidance.
The Importance of an HOA Quorum
Homeowners associations must first establish a quorum before proceeding with any HOA business. Quorums serve as a form of protection for the association, in that it gauges the general interest of the community. It ensures that board members will not take any action without first obtaining approval from a majority of the owners. In that way, it prevents board members from acting based on their own selfish reasons.
What Happens When There Is No Quorum?
When an association fails to reach a quorum for a board or unit owners’ meeting, the meeting must not continue. Essentially, the HOA board will need to adjourn and postpone the meeting. Rescheduling a meeting, though, costs time and money. Plus, there is no guarantee that you will reach a quorum the second time around. In fact, most associations find it more difficult to meet a quorum at the rescheduled meeting.
Yet, ensuring your meeting pushes through remains vital. It is part of the board’s duties and obligations to conduct meetings. Additionally, without a meeting, your board would have no way of performing association business. It is at these meetings that your board ratifies the budget, sets member dues, and makes decisions for the community.
Annual meetings are equally important because that is where elections usually take place. When elections fall through, the current board will be forced to continue serving. Prolonged terms can give rise to risks, too, as owners may call into question the legitimacy of the current board’s actions.
Having Trouble Meeting a Quorum? Here’s What You Can Do
Failing to meet a quorum is one of the most common problems homeowners associations face. If your community suffers from the same issue, consider applying the tips below:
1. Talk to the Owners
The first tool in your arsenal should be to talk to the members of your community. Let them know that it is important for them to attend meetings. Without the presence of a quorum, your board can’t take any actions or make decisions. As such, it is the community and its members who will suffer the consequences of inaction in the end.
Additionally, you should explain to the members what will happen if you keep failing to reach a quorum. In most cases, your board will need to petition for receivership. The court-appointed receiver will then hire a management company to run the HOA. All of this will cost more money, which members will undoubtedly dislike.
2. Use Proxies
Another way you can reach a quorum is to use proxies. Proxy forms allow members to transfer their voting power to another member. You can amend your documents to count proxies towards the quorum requirement. This way, you can have an easier time meeting a quorum in your meetings.
3. Petition the Court
The final way is to petition the court to lower the quorum requirement. If a court grants the request, then the association can use the lower quorum requirement for all future meetings, too. Not all associations have this option, though, so make sure to check your state laws first.
Eliminating HOA Quorum Requirements: Is It Possible?
Due to how hard it is to reach a quorum, many HOA boards toy with the idea of removing quorum requirements altogether. Whether or not this is possible, though, depends on where you live.
In Florida, for instance, state statutes are rather strict. Florida Statutes 720.306 requires quorums to be set at 30 percent of the total voting interests unless an HOA’s governing documents say otherwise. In other states, it is possible to change quorum requirements to say that whoever is present at the meeting or by proxy can constitute a default quorum.
Generally, it is best to simply lower the percentage for a quorum, particularly if you have a big community. Ten percent may not seem like much to a community with 100 homes, but it is significantly larger for a community with 1,000 homes.
Amending your governing documents to tweak quorum requirements, though, is no easy task. It will require approval from a majority of your membership.
The Hierarchy of HOA Quorum Requirements
There are some association matters that will require different quorum requirements regardless of what it says in your governing documents. This will depend, of course, on the specific laws in your state.
In California, for instance, the quorum requirement for raising dues above a certain amount is more than 50 percent of the association’s members.
As previously explained, you will usually find quorum requirements in your bylaws or CC&Rs. It is rare for an association to have these requirements stated in their articles of incorporation. But, if your articles do define your quorum requirements, then you will need to follow your articles. After all, the articles of incorporation do take precedence over the bylaws and CC&Rs.
The Final World
An HOA quorum is often a tricky subject for homeowners associations. Many boards find it hard to meet a quorum because the percentage requirement is too high relative to the size of the community or that owners simply can’t be bothered to attend meetings. Either way, there are ways to help resolve your quorum woes. When it comes down to it, though, quorums keep board members in check and, therefore, remain necessary for meetings to proceed.
If your homeowners association needs help with daily operations, Clark Simson Miller is the way to go. Call us today at 865.315.7505 or contact us online to learn more about our services.
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