Real Estate & Property Law

Coping With the HOA Elections Laws

Elections can be tough for HOAs under the elections laws that were passed and became effective in 2006. Adjournment of meetings is one thing that has its challenges. Why? Because establishing quorum can be confusing.

Here is an email about one board's situation:

"At our Annual Board of Election meeting we failed to make quorum....our board decided that they could not adjourn the meeting because.......those votes/ballots are treated as individuals and as such must vote to adjourn......since they were not there, nor were they given an option on the envelope to indicate they vote to adjourn, the meeting cannot be adjourned and the second meeting with a lower quorum cannot be held.
I've never heard of such a thing? I thought the Ballot had only two functions. First to vote and second to count towards quorum. That's it. I've looked and looked and looked for law to support my contention or theirs... Civil Code, Corporations Code....Do you have the answer?
I believe I know what they are trying to do...they want to say that quorum is not met and they remain in office."

Nowadays (a good old Iowa saying), quorum can be established more than one way.

By persons present at the membership meeting.
By proxies at the meeting.
By ballot packages returned to the inspectors.

Here is how it gets confusing:

The law urges voting by secret ballot packages which when returned to the inspectors, count toward the quorum for the election. If it is an election for directors and quorum is not established for lack of enough ballots, boards, if the documents allow, can present a motion to adjourn the meeting and reconvene at a later date and often the adjourned meeting has a lower quorum - or they can send out a reminder to vote and collect more ballots for the adjourned meeting. The problem is that the ballot packages cannot vote on the question of adjournment!

If there are persons there who also sent ballots, the question becomes: does the board have to figure out who present also sent a ballot package so as not to count both in the quorum? The answer would be yes. However, technically, a motion to adourn requires approval of a majority of persons present once the quorum is established. So a board has to (1) make sure it does not count the persons present and the ballots they turned in toward the quorum and (2) take a vote of the persons present on the adjournment question - but the persons present do not even often constitute a majority of the quorum count (since much of the quorum count comes from the ballot packages).

Now, if you bring proxies into it, and the proxy holders submitted ballot packages (as they must do in order to actually vote in the election), since the board cannot count proxies as ballots, can they count them toward the quorum? Or toward the adournment motion?

The pieces of paper that are proxies cannot vote. The proxyholders can (they are technically called proxies too). But again, if a proxyholder (or proxy, whatever the board calls the persons) votes on behalf of an owner to adjourn, board has to discount the ballot package they turn in as being part of the quorum.

Yes, it gets confusing. I believe that most boards - if the documents allow for adjournment if there is not a quorum, just announce a followup meeting without taking a vote - because there are rarely enough "bodies" present to hold a meaningful vote - and even if there are - boards don't always know what to do about that.

Full post as published by California Condo & HOA Law on March 16, 2011 (boomark / email).