Adams Stirling PLC
Menu

APPROVAL BY MEMBERS DEFINED

Default Approval Requirement. If a quorum is present, the affirmative vote of the majority of the voting power represented at the meeting, entitled to vote, and voting on any matter shall be the act of the members unless the vote of a greater number or voting by classes is required by statute, the articles or bylaws. (Corp. Code §7512(a).)

Simple Majority Defined. Unless defined differently by an association's governing documents, the word "majority" means more than half. It does not mean 51% nor does it mean 50% + 1. This distinction is especially important for those associations that utilize half votes or fractional voting. For those associations that use whole votes; "majority" means the next highest whole number above 50%. If an association has 11 members, 50% is 5.5 which, when rounded up, produces a majority of 6. (Robert’s Rules , 11th ed., p. 400). The 50% + 1 formula would produce an erroneous result, i.e., 50% of 11 is 5.5 +1 = 6.5 which, when rounded, produces 7 instead of the proper result 6.

Abstentions. Abstentions count toward quorum.

Approvals Defined. The following terms are used in HOA governing documents and are defined as follows:

1. Approval by a Majority of All Members. This means approval by an affirmative vote of a majority of the votes entitled to be cast. (Corp. Code §5033; Civ. Code §4065.) In an association with 100 members, 51 must approve an action. These numbers are no longer affected by the number of suspended members since the suspension of member voting rights is no longer permitted. (Civ. Code §5105(g)(1).)

2. Approval by the Members. This phrase means approval by the affirmative vote of a majority of the votes represented at a duly held meeting at which a quorum is present. (Corp. Code §5034.) In an association with 100 members, at least 51 must be present (in person, by ballot, and proxy) before a vote can be taken. At least a majority of those voting must approve the action. If 51 are present then 26 must approve. If 80 are present, then 41 must approve the action.

3. Approval by the Voting Power. This means majority of members eligible to vote. (Corp. Code §5078.) Since the change in the law that prohibits the suspension of member voting rights, this means the same thing as "Approval by a Majority of all Members" since all members are always eligible to vote.

4. Approval by an Authorized Number. This means 5 percent of the voting power. (Corp. Code §5036(a).) In an association with 100 members, the authorized number is 5.

5. Majority of a Quorum. A  majority of a quorum of the members is defined to mean approved or ratified by an affirmative vote of a majority of the votes represented and voting in a duly held election in which a quorum is represented, which affirmative votes also constitute a majority of the required quorum. (Civ. Code §4070.)

Poorly Worded Provisions. Some documents contain poorly (ambiguously) worded provisions that produce unintended results if followed literally. For each example, assume a 100-unit association voting for a special assessment where quorum is a majority of members represented in person, proxy or ballot.

a.  Approval by a "majority of a quorum" could mean that if 100 votes are cast with 26 in favor (a majority of a quorum) and 74 against, the measure passes.

b.  Approval by a "majority of the votes cast" could mean that a meeting with 51 member attendees where one member votes in favor and the other 50 abstain, the measure passes.

c.  Approval by a "majority of members present and voting" could give the same erroneous results as b. 

Recommendation: Because each of the poorly drafted provisions produces unintended consequences, they should be treated as approval by the "affirmative vote of a majority of members represented at the meeting once a quorum has been established." That means in an association of 100 members at least 51 must be represented (in person, by proxy and/or by ballot) before a vote can be taken. Once a quorum is present at least a majority must approve the action. If 51 are present, 26 must approve. If 80 are present, 41 must approve, etc. Finally, boards should consider amending their documents to eliminate such problems.

ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.

Adams Stirling PLC