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Subject: Intentionally avoiding a quorum?
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PaulC20
(Delaware)

Posts:10


10/03/2021 8:43 PM  

Hi All,

Within the last few days our annual meeting was held, however we did not have a quorum and therefore could not vote for new board members or approve a budget.

Most of the people that usually support the current board members were conspicuously absent. In anyone’s experience could the current board have asked members of the community not to attend in order to avoid reaching a quorum which would result in being forced to keep the current board in place and continue with the current budget?

Also the board Secretary was a no show along with the Treasurer. What possible advantage does the board have in manipulating the community in this situation?


175 Unit HOA in Delaware
Not fully turned over by the Developer.

MaxB4


Posts:1395


10/03/2021 11:06 PM  
HELLO????? What up and smell the pansies, it's to stay in control!
CathyA3
(Ohio)

Posts:2475


10/04/2021 4:52 AM  
Did the developer attend and what percentage of ownership does he still have?

What do your bylaws and/or state laws say about adjourning the meeting and trying again with a lowered quorum percentage?

What is the developer's take on this, if you know? Does he support the current board members, or does he not care? Did he attend himself (in which case he's likely to be annoyed that he wasted his time)?

So now what?

So now you probably know what you're up against, assuming that the current board members are playing games. If you want to take this on, you have time to begin your own campaign with homeowners - ie, showing them how this nonsense is not to their advantage. The big one is that the current incumbents are trying to take control out of homeowners' hands and keep it in their own hands. Also, people who keep control often get complacent and will be acting in their own interests rather than in the interests of the community.

Point out this stuff to the rest of the community. You'll probably find enough folks to support your position and to achieve quorum, especially if your bylaws say that you can try again with a lower percentage. The developer will probably be an ally if he still has a decent percentage of ownership and doesn't want to waste time of people's foolishness. (For instance, the developer in my community always had at least 25% control until we transitioned to homeowner control, and our quorum requirement is 20% - if he was present, we made quorum regardless of who else attended.)
AugustinD


Posts:1695


10/04/2021 6:56 AM  
Posted By PaulC20 on 10/03/2021 8:43 PM
Most of the people that usually support the current board members were conspicuously absent. In anyone’s experience could the current board have asked members of the community not to attend in order to avoid reaching a quorum which would result in being forced to keep the current board in place and continue with the current budget?
The current board can legally do this. But this would not be the only cause of failure to reach quorum. It's on you and other members who feel as you do to get out the vote and reach quorum.

Sometimes the best way to achieve quorum is to walk the neighborhood and gather signatures on proxy forms.

On the other hand, with the developer still in control, were there enough seats open for election (by the owners) that the owners would even have the possibility of taking majority control of the Board?
PaulC20
(Delaware)

Posts:10


10/04/2021 9:07 PM  

Max,

I read what you said quickly and nearly mistook it as not a flower LOL. Yes I read you loud and clear rotten.
I'm the newbie to HOA life I have researched a lot since finding this board, but I'm not going lie I lack experience. Just searching for ways to counter the skullduggery.




MaxB4


Posts:1395


10/04/2021 9:51 PM  
Posted By PaulC20 on 10/04/2021 9:07 PM

Max,

I read what you said quickly and nearly mistook it as not a flower LOL. Yes I read you loud and clear rotten.
I'm the newbie to HOA life I have researched a lot since finding this board, but I'm not going lie I lack experience. Just searching for ways to counter the skullduggery.







My comments are based on experience, many years of it.
PaulC20
(Delaware)

Posts:10


10/04/2021 10:05 PM  

Cathy,

171 homes closed, 4 remaining, the developer has not attended a meeting since the turnover. I would say they are non-factor in this whole thing.

Regarding a quorum, for the state: Section 7. Quorum. At a noticed meeting of members entitled to cast votes, or of proxies entitled to cast votes, 33% of the total votes. My communities bylaws there is a bit of issue, let me explain and let me know if this is the best remedy. Everyone gets a binder when they close, for some reason the bylaws depending on the year of that closing didn't match. The first year the Rules Committee was tasked with getting a copy from the county and comparing that copy to what was posted on the management companies portal. The goal was to have the same universal one for all. Months past and no changes were needed and the one on the portal was fine. New management hired and portal files are transferred over, but not without glitches/excuses and the portal never launched when it was said. My hard copy of the bylaws says you need a 20% quorum, I downloaded recently from the portal the bylaws in PDF form and did a find and nothing comes up related to a quorum. The plan: contacted the Recorder of Deeds the other day and requested a copy, got a recording and left a message. I would think that's the official copy and I would go by that and while I have it see if what was uploaded to the portal even matches the official version.

I want to write more but there is a nasty storm, and may lose power. I'll pick this up tomorrow.

Thanks Paul.
PaulC20
(Delaware)

Posts:10


10/05/2021 9:45 AM  


Okay Cathy I'm back.


With a private Facebook page of 100+ homeowners, the mgmt company mass emailing everyone and including reminders, a Communication Committee granted only created a few months back at times sends out newsletters. Also monthly board ZOOM open meetings. The turn out for those only jumps when say there is some kind of a mini crisis, snake sightings was one and maintenance fees rumored to be going up due to many delinquents. Due to Covid the election was held outside the clubhouse in the parking lot and homeowners some are a few steps away yet no shows couldn't even sign in. I'm too believe no one cares even homeowners I'm somewhat friendly with and that have concerns/complaints just chalked all that up.

So moving forward the board can lower the quorum to say 10% or may even eliminate it, can this be done with a resolution? If next time around we get a quorum and say two board members are magically absent once again, does that shutdown the meeting? This particular group "too long of a backstory" will do whatever it takes to stay in power. I wouldn't be surprised if they expanded terms limits and since they continued on the possible two no shows' resign, and then they can hand pick who they like as replacements. I don't even want to get into proxies and how votes can be changed. Have ever heard of a HOA doing a forensic audit? Its a idea of mine, I know its costly but can't trust a excel sheet that anyone can put anything on it with nothing else back up the numbers. Thank you for taking the time to read and reply.

Paul
CathyA3
(Ohio)

Posts:2475


10/05/2021 11:48 AM  
Posted By PaulC20 on 10/05/2021 9:45 AM


Okay Cathy I'm back.


With a private Facebook page of 100+ homeowners, the mgmt company mass emailing everyone and including reminders, a Communication Committee granted only created a few months back at times sends out newsletters. Also monthly board ZOOM open meetings. The turn out for those only jumps when say there is some kind of a mini crisis, snake sightings was one and maintenance fees rumored to be going up due to many delinquents. Due to Covid the election was held outside the clubhouse in the parking lot and homeowners some are a few steps away yet no shows couldn't even sign in. I'm too believe no one cares even homeowners I'm somewhat friendly with and that have concerns/complaints just chalked all that up.

So moving forward the board can lower the quorum to say 10% or may even eliminate it, can this be done with a resolution? If next time around we get a quorum and say two board members are magically absent once again, does that shutdown the meeting? This particular group "too long of a backstory" will do whatever it takes to stay in power. I wouldn't be surprised if they expanded terms limits and since they continued on the possible two no shows' resign, and then they can hand pick who they like as replacements. I don't even want to get into proxies and how votes can be changed. Have ever heard of a HOA doing a forensic audit? Its a idea of mine, I know its costly but can't trust a excel sheet that anyone can put anything on it with nothing else back up the numbers. Thank you for taking the time to read and reply.

Paul



Actually, your community sounds pretty typical. Homeowners often attend only if there is some issue that's important to them, otherwise they don't both.

As far as quorum goes, for board meetings you need to have a majority of board members there, the number of homeowners doesn't matter. So if you have a 5-person board, you need three board members present. This quorum is based on the number of directors in your community and so can't be changed unless you amend your bylaws to reduce the number of directors. This may make sense if you have more directors than makes sense for the size of your community and you often have trouble filling all of the director positions.

For the annual meeting, you count the number of homeowners physically present plus proxies if your community allows them. Board members are counted as homeowners for purposes of achieving quorum - they could all miss the annual meeting, and if you have enough homeowners attending to make up the numbers, you're good (at least in my community, it's possible others are different). Of course, if board members miss the annual meeting, you have to wonder if they belong on board at all unless they have a reasonable excuse such as illness.

Quorums should not be eliminated, otherwise it will call into question the validity of any decisions that are made. It would probably also be a violation of your state's laws governing non-profit corporations.

For proxies, some communities/states allow a combined proxy/ballot form, whereas other states like mine only use proxies for purposes of achieving quorum. If you often have problems achieving quorum at the annual meeting and you've tried all of the steps you've already tried, reducing quorum permanently is an option. Usually this means amending your bylaws. In some states this can happen with a simple board vote, in others it may requiring homeowner approval as well. You'll need to check your state's HOA law as well as anything relevant in your bylaws. Some communities' bylaws provide for rescheduling the annual meeting in a few weeks time with a reduced quorum requirement if you didn't make quorum the first time. You'll have to check

A forensic audit is an audit on steroids - it's a deep dive into your financials, and it's usually conducted if you have reason to suspect something like embezzlement. These audits are expensive, as you noted, and if there isn't any evidence of wrongdoing, you can just have a regular audit. Your bylaws may require an annual audit. Our lawyer said that because of the expense, you can do the full audit every five years, with the less involved review of the books in between as long as your full audit didn't reveal any problems.

Election shenanigans are something else. Your election procedures should be designed to ensure accuracy and confidentiality - there should be no option for anyone to change anyone else's votes. Some of the others who post here use combined proxy/ballot forms. Hopefully some of them will chime in and talk about their procedures. These usually involve having ballots put inside sealed envelopes and then submitted in another envelope with the homeowner's name and address on them. This allows the vote to be completely anonymous and confidential, but also allows the people running the election to check off names and addresses to eliminate duplicates or other invalid items such as renters voting.

We conduct our vote in person. Attendees sign in and the sign in sheet is checked against the list of homeowners and the delinquency list (if you owe the association money, you can't vote per our CC&Rs). Ballots are handed out to those who can vote - people who have been named proxies by absentee owners are given additional ballots for the absentees as well (so if you were named by three other people, you will receive four ballots). The ballots only contain candidates' names as well as a place to write in a name (we can nominate from the floor) - the homeowner doesn't put his or her name on the ballot. Ballots are collected and given to two homeowners who were named as election inspectors - they count the votes and announce the result. The ballots are collected after the election is done and are kept with our other records. It's a very open process, and we've never had any issues with our elections.
MaxB4


Posts:1395


10/05/2021 12:11 PM  
CathyA3

Quorums should not be eliminated, otherwise it will call into question the validity of any decisions that are made. It would probably also be a violation of your state's laws governing non-profit corporations.

Could you explain why?
PaulC20
(Delaware)

Posts:10


10/05/2021 12:58 PM  

Hi RollandE1,

That's one of my possible scenarios which didn't happened in reality just yet, but looking like we are headed toward a dictatorship. That's a option door to door one of my allies did that earlier on when he first arrived in the community, you always will get unfriendly dogs, resistance and some hate mail. The positive side he developed rapport and really listened to the concerns of the homeowners, and even campaigned door to door and re-introduced himself and got friendly with new homeowners and was elected to the first board as VP. It's not happy ending lets just say you have some evil people that will do anything and everything to undermine. He is someone not on the board now yet homeowners come knocking on his door or contact him before the board until this day. Unlike many posts I read on here, people complain about too much enforcement, complete opposite here basically nothing is and a resolution or grandfather in is the go to answer for all.

I read a post you like to change the rules, and looking to go door to door yourself. Why not do it digitally? I was thinking of doing that myself due to all the covid 19 fear still and the Clubhouse was recently closed. There are open source ways to get cellphone numbers/emails. I'm not sure if your HOA has a portal, but at times there is a directory and some homeowners actually put emails and phone numbers down. Also social media either facebook or I use nextdoor.com and reach out via private message. I will give one word of advice if you create a flyer etc, don't put it in anyone's mailbox, its against the law. Put the flyer under mat or door and you can mail it but I think you said which is true people ignore it and it becomes costly. I wish all the best, if I lived in NC I come help you out.

Paul
JohnC46
(South Carolina)

Posts:11539


10/05/2021 1:26 PM  
Posted By MaxB4 on 10/05/2021 12:11 PM
CathyA3

Quorums should not be eliminated, otherwise it will call into question the validity of any decisions that are made. It would probably also be a violation of your state's laws governing non-profit corporations.

Could you explain why?




There is one school of thought that says Quorums are not needed such as in they are not required in governmental elections so why have them in owner associations. While I do not disagree with this I expect one would have to pay hell to change an existing associations docs to Quorum not required.

One of if not the main justification, for Quorums is so a sneaky few (like a BOD alone) could not change the docs. And we all know, some sneaky BOD's exist. Impossible to have "sneaky" municipal elections.

I see many of the newer association docs are typically 10 to 25% for Quorum so the trend away from the older/typical 50% is happening. We changed ours from 50% to 20% but we needed 51% of all owners approving the change.
MaxB4


Posts:1395


10/05/2021 1:39 PM  
Posted By JohnC46 on 10/05/2021 1:26 PM
Posted By MaxB4 on 10/05/2021 12:11 PM
CathyA3

Quorums should not be eliminated, otherwise it will call into question the validity of any decisions that are made. It would probably also be a violation of your state's laws governing non-profit corporations.

Could you explain why?




There is one school of thought that says Quorums are not needed such as in they are not required in governmental elections so why have them in owner associations. While I do not disagree with this I expect one would have to pay hell to change an existing associations docs to Quorum not required.

One of if not the main justification, for Quorums is so a sneaky few (like a BOD alone) could not change the docs. And we all know, some sneaky BOD's exist. Impossible to have "sneaky" municipal elections.

I see many of the newer association docs are typically 10 to 25% for Quorum so the trend away from the older/typical 50% is happening. We changed ours from 50% to 20% but we needed 51% of all owners approving the change.



Doesn't pass the smell test! Governing documents have their own requirements built in for change, for instance, 67% for CCRs and 50% for Bylaws, 67% for Articles. So it make perfect sense to get 10% together to change the CCRs, when in reality it takes 67% yes votes to change. Quorum is there solely to keep the status quo.
CathyA3
(Ohio)

Posts:2475


10/05/2021 2:38 PM  
Posted By JohnC46 on 10/05/2021 1:26 PM
Posted By MaxB4 on 10/05/2021 12:11 PM
CathyA3

Quorums should not be eliminated, otherwise it will call into question the validity of any decisions that are made. It would probably also be a violation of your state's laws governing non-profit corporations.

Could you explain why?




There is one school of thought that says Quorums are not needed such as in they are not required in governmental elections so why have them in owner associations. While I do not disagree with this I expect one would have to pay hell to change an existing associations docs to Quorum not required.

One of if not the main justification, for Quorums is so a sneaky few (like a BOD alone) could not change the docs. And we all know, some sneaky BOD's exist. Impossible to have "sneaky" municipal elections.

I see many of the newer association docs are typically 10 to 25% for Quorum so the trend away from the older/typical 50% is happening. We changed ours from 50% to 20% but we needed 51% of all owners approving the change.



One issue with that is that you're comparing an election held in a democracy with actions taken in under a corporate form of governance. You can maybe learn something useful by doing that, but you can also draw the wrong conclusion.

As you said, the main justification for quorums that I've seen is that they make it harder for one or two people to control an association. It would be very noticeable in communities that require homeowner "blessing" on budgets or assessment increases. For example, the board decides they want a 25% increase in assessments, and this must be approved at the meeting in which 51% of the attendees vote "yes". No quorum needed, a couple of the board's "stooges" show up, and there's your approval - which is contrary to what lawmakers wanted when they enacted this requirement.

Just opining here, but suspect that you'd see more conflicts and lawsuits in communities like this, simply because things would get so "in your face" that homeowners would have to sit up and take notice. Especially with the assessment business.


MaxB4


Posts:1395


10/05/2021 3:05 PM  
From your explanation, I still don't see a reason for quorum. If your argument, like John's, is that a small rogue group can control an association, I could say the same thing in reverse, a small group stays in power BECAUSE quorum can't be reached.
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