HOA Quorum Defined
Quorum is a term that comes up all the time in the world of Community Associations. It is, in fact, an incredibly important word – not only because of its technical meaning, but also for the practical need of your community to function. In reality, a quorum requirement exists to protect against the situation where a very small number of people make decisions that affect the lives of many. It is the legal floor for a meeting and is intended to guard against a small faction of owners running the show. That’s the theory, anyway…
In real life, especially for smaller communities, this can be a real challenge.
So, what is a quorum?
Although the term "quorum" evokes visions of plaintiff lawyers salivating at the sight of a poorly drafted meeting notice, the real definition is much more commonplace. Legally, a quorum is the minimum number of owners who must be present at any meeting in order for the Association to conduct business (as it relates to the homeowner members of the Association). In most cases, this number is stipulated in the Association’s governing documents or by statute. And, as you can imagine, since we have both legislative and judicial entities setting these standards, quorum is one of the more hotly contested aspects of our community association world .
As a general rule, a simple majority of owners represented at any meeting is required for conducting business. In the case of an even number of owners, the quorum requirement will be one-half plus one of the owners. In the case of an odd number of owners, quorum is one-half of the owners plus one (or 50 percent of the owners plus one, if everyone is attending!) When owners receive notices of regular meetings with the intention to conduct business and either do not attend or intentionally send proxies, they are essentially never in attendance of meetings. The inverse situation is true as well. Without the notice, the general members of the Association are never considered in attendance.
From the practical perspective, low turnout at meetings is a problem for two reasons. One reason that this can be a problem is that you can’t have solid decision-making without solid participation – and even if that participation is remote. Incidentally, if you have regular business being conducted, such as budget adoption, elections, or other matters which require an adequate number of owners to be present to conduct business, this is the worst possible scenario. Even worse, conducting business when a quorum is not present can result in potentially disastrous judgments later.
Usual Percentage of Quorum for HOAs
The percentage required to reach a quorum is generally found in the bylaws of an HOA association. While this percentage may vary from one community to another, a general range is between ten (10) percent and thirty (30) percent. This percentage can be calculated based on the total number of lots or parcels within the development or on the number of lots or parcels actually owned by members entitled to vote. Of course, this does not include any owners who are in default on the payment of assessments. Note that a lower number of lots means a commensurately higher percentage of lots that must be represented to reach a quorum. In most communities there are many more lots than there are owners who are entitled to vote. In this type of community, therefore, a low quorum percentage can be a more doable goal.
Some HOA bylaws further break down quorum percentages according to the type of meeting or election. For example, an HOA may establish a different quorum percentage for annual meetings, elections, budget approvals, and all other matters. When amendments to the CC&Rs or bylaws are concerned, a quorum may be required at two or more consecutive meetings because not enough members may show up at in the first instance. It is common for the HOA bylaws to provide for a one-third quorum for a budget ratification meeting even when the normal quorum requirement is higher.
Results of Not Reaching the Quorum Threshold
A failure to meet quorum at a meeting can have a number of different consequences for an Association, depending on which type of meeting is taking place. For example, if the meeting is a board meeting, failure to attain a quorum means the business of the Association cannot be conducted. A March 1994 article published by the Community Associations Institute, Quorum: A Primer, sets forth a number of consequences to missing quorum at a board meeting: If the board cannot attain a quorum at its first meeting, it may adjourn that meeting and try again at a second meeting. If that second meeting fails to attain quorum, typically the board’s only option is to allow for the automatic adjournment of the original meeting to the same day of the following month. At this adjourned meeting, absent a special provision in the association’s bylaws or the statute, all business transacted at the adjourned meeting is valid regardless of quorum present. An exception exists, however, to that rule. If the purpose of the adjourned meeting is the same as the original meeting—that is, the adoption of a budget at a budget meeting or the election of directors at a directors’ meeting—the quorum requirements must still be met. (cn 70-71) When the meeting is an annual meeting of members or a specially called membership meeting, failure to achieve a quorum presents a much more serious problem for the Association. Pursuant to Section 718.112(2)(d) of the Florida Statutes, an Association’s bylaws may provide for the time frame and manner by which the Association may reschedule a meeting if a quorum is not attained at the two scheduled meetings. Many associations determine the quorum necessity for HOA members to transact business at an annual or special meeting is set at 30 percent of the members. However, in practice, attendance seldom exceeds 20 percent, and often is closer to 5-10 percent. When this occurs, most associations have amendments in their governing documents allowing them to re-schedule the meeting within a prescribed timeframe, and set quorum at a lower threshold than the original quorum requirement. E.g. setting the quorum for the new meeting to be the number of members who attended the earlier meeting instead of 30 percent of the members. Importantly, HOAs which do not have fallback quorum requirements in their bylaws should review the language and amend the bylaws to add a fallback type requirement if such language is permitted under the statutes and in line with their governing documents. Otherwise, failure to meet the quorum requirements at a member meeting could necessitate the rescheduling of the meeting, and re-noticing it to members, which will cost the association time and money. Additionally, the repeated failure to attain quorum can interrupt business of the association, and may delay the taking of important votes.
How to Reach Quorum
While the substantial quorum requirements outlined in many governing documents may seem daunting, there are several simple and proactive strategies that HOAs can implement to ensure members’ attendance at regular and special meetings and the achievement of quorum. Most importantly, it is vital to ensure that all members are properly informed about what is required to achieve a quorum. Oftentimes, homeowners are not aware of quorum requirements and many assume that a lower percentage of attendees are permitted. It is crucial to convey the message that it is not acceptable to delay action on important matters requiring membership approval simply because members choose not to attend or vote. HOAs should focus on maximizing participation by making their position clear to members regarding the importance of their involvement in the decision-making process.
First and foremost, HOAs should strive to engage their members and encourage their involvement long before any meeting is held. This may be as simple as sending out an introductory letter from the current board members and committee members. Members should be made aware that they are welcome and encouraged to attend board and committee meetings, as well as social events. HOAs should also focus on ensuring that members feel involved by keeping them up-to-date on upcoming changes within the community by sending out newsletters and announcements. Although such communication would benefit members of a community of any type, they are especially important with respect to HOAs where the substantial quorum requirements outlined in the governing documents may lead to difficulty in achieving quorum and making important decisions.
Additionally, HOAs should incorporate different measures into their communication efforts that will serve to encourage members to participate in the decision-making process. For example, HOAs may offer incentives, such as food, refreshments and child care at regular and special meetings. Further , HOAs may offer door prizes or raffles in conjunction with regular and special meetings. These small gestures can encourage members to become more active in their community, attend meetings, and ultimately vote.
If, and only if, your HOA is unable to achieve the attendance necessary for quorum at a regular or special meeting, your HOA may utilize proxy voting. Proxy voting is the act of delegating your right to vote to another person. Proxy votes are important in order to help establish and achieve quorum at regular and special meetings. Since members of the board cannot act by proxy, board members must appoint a member of the board to receive these proxies. When a member designates a proxy, they essentially authorize another individual to cast their vote. This person must then attend the regular and/or special meeting and will be the only member authorized to cast a vote on behalf of the absent member. In this sense, it is important for board members to communicate with absent members prior to the meeting so that they will be willing to designate a proxy. It is important to ensure that the proxy contains adequate space for the absent member to express a preference on each of the issues for which the proxy is being submitted, while also providing the blank space necessary for a board member to enter their own vote where applicable. It is also important to advise homeowners on the use and return of proxy votes in the process of soliciting a proxy. Specifically, the proxy should instruct members to send their proxy votes directly to the designated proxy holder on or before the date and time listed on the proxy vote. Since proxy votes may only be used in accordance with any requirements set forth in your governing documents or state statutes, it is important to review these requirements prior to utilizing proxy votes and always comply with these requirements in order to avoid challenges to actions taken by the HOA.
Legal Impact and Bylaw Implications
A legal consideration for quorum requirements that may be relevant to your HOA is that the law recommends specific types of quorum requirements for homeowners associations. There are different laws that apply to condominiums and cooperatives in addition to planned communities. Regardless, the law recommends different types of quorum requirements for each type of association.
Most people think that an amendment of the governing documents of an association can be undertaken by a board of directors. This is not always true. For an amendment to be valid, the statutory amendment procedure as well as the amendment procedure in the governing documents must be followed. Sometimes, an amendment of the bylaws must be made by a vote of the members of the association. If this is true, generally, even a three to twenty-five percent quorum requirement can create a burden. In other instances, a board may not be able to waive quorum requirements in the bylaws or otherwise change quorum requirements.
For example, when a quorum is not met for a meeting, if there is a quorum waiver by the members who are present, quorum can be achieved at that meeting. We have assisted with oversights by board members regarding quorum requirements. Even though the board will elect to hold a meeting under the assumption that a quorum is present given the notice that is provided, oftentimes they might make that assumption without any knowledge of the actual chances of promoting a quorum at the meeting.
While the law provides flexibility for a developer to be able to operate during the interim board while a developer controls an association, in the event of a case of developer control litigation, if a quorum has been waived at the prior meeting, it can complicate the election of members to an undeveloped community that has had a developer in control.
Quorum Examples
In this section, we will explore real-life situations of HOAs that grappled with maintaining a quorum and subsequently came up with practical solutions to ensure their governance framework functions effectively.
Example #1: Kukui Haile Condominium Association
The Kukui Haile Condominium Association was formed in 1980 and has 136 units. The original Declaration wasn’t amended until 2019 when it was brought into the 21st century with updated language and provisions for electronic communication. Meeting the quorum requirements dictated by its Declaration alone was challenging. In the original language, the quorum requirements for the General Manager and the Developer were synchronized so it followed the low standard of the Developer’s quorum (i.e. 2/3 of the units in the association represented by owners or by absentee ballots). Because the developer drove the development, quorums were typically achieved, as was the case for the first three annual meetings. However, as the Developer turned over the Association, it became more difficult to obtain quorum because once the Developer’s presence was out of the picture, there were many owners that did not want to be involved with the business of the Association. The lack of interest coupled with the low percentage of owners attending the meetings caused the Board to ask for corrective measures to correct the quorum issue which was enacted in 2020. Now the Association is able to toggle back and forth between the original and revised quorum requirements in order to conduct the business of the Association. The Board is diligent and continues to ask owners to vote by proxy in order to ensure a quorum is met for annual and special meetings .
Example #2: For a community that has a required quorum of over 50%, often quorums can be tricky to obtain. This is a community that has a required 60% quorum to hold a meeting (and conduct business). Previously over the last few years, quorum has only been obtained 4 out of 6 times – so only 67% of the time. It’s clearly not enough to get the business of running the Association conducted. Now the Board is considering decreasing that quorum to 50 percent in hopes to reduce the frequency of having to adjourn and delay their business meetings.
Example #3: Village Green HOA – Fort Collins, Colorado
The Village Green HOA is comprised of over 700 homes in one of the most densely populated areas of Colorado at 30 units per acre. Because of the size of the community, the HOA Board has to submit a budget that is extremely high dollar value, requiring a significant member assessment. Since the budget is such a large item, the members are always highly motivated and engaged in the process. Even with that participation and interest, having members approve the budget by a simple 51% was still failing. To remedy the issue the Board submitted a petition to the Department of Regulatory Agencies (DORA) in Colorado to receive a waiver to allow the HOA to pass the budget with a required two-thirds vote. The Board was granted the waiver from DORA and was then able to get the budget passed with a simple two-thirds instead of the required 75%. In the HOA world, we don’t typically advocate for larger quorums, however, in this case, the large quorum worked to the advantage of the HOA and its members.