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QUORUM OF MEMBERS

ACHIEVING QUORUM
A "quorum" of the membership is the required minimum of number of member voters present in person, by proxy and/or by ballot before the association may conduct business at a membership meeting. (Robert's Rules, 11th ed., pp. 21, 345.)  Quorum is usually defined in the bylaws and sometimes in the CC&Rs. Ballots cast are "treated as a member present at a meeting for purposes of counting quorum." (Civ. Code § 5115(d).) This includes blank ballots. (Robert's Rules, 11th ed., p. 415.) Ballots with invalid write-ins (such as "Mickey Mouse") also count toward quorum.

Unsigned Envelopes. If a voter fails to sign the outer envelope, the ballot is not counted toward quorum. For an envelope to be valid, voters "shallsign their names in the upper left-hand corner of the outer envelope. (Civ. Code § 5115(c)(1).)  An invalid or illegible owner address on the outside of the envelope can also invalidate a ballot. A proper address and signature allow the Inspector of Elections to verify a voter's eligibility. (See Ballot Irregularities.) When an envelope is unsigned, the Inspector sets it aside and does not count it toward quorum since an unsigned ballot envelope is invalid. This is modeled after the California County Absentee Ballot process, which does not accept an unsigned absentee ballot. At the Inspector's option, the member may be contacted so he/she can sign the envelope. Members who forget to sign their ballot envelope may go to the Inspector's office, show I.D. and sign the envelope in the Inspector's presence. Unfortunately, this creates administrative costs for the association and may be inconvenient or impossible for owners to accomplish if the Inspector's offices are out of town. Another solution is for the voter to attend the annual meeting and cast a ballot.

Invalid Return Address. In Clark v. McCann, the Registrar of Voters excluded ten ballots because the voters failed to include a valid residence address. The plaintiff argued that the Registrar should have taken extra steps to validate residences to count the ballots. The court disagreed. It noted that requiring voters provide a current address is not burdensome and verifies a voter’s eligibility to vote. The Registrar did not need additional methods to confirm a voter's address. When applied to HOA elections, the court’s holding confirms that homeowners must comply with statutory requirements and ratify their eligibility to vote by providing a valid separate interest address on the outer envelope. (See sample envelope.)

Incentives to Make Quorum. Because associations are are burdened with quorum requirements which often cannot be met, boards must nag and cajole members to vote and sometimes offer incentives. There is nothing illegal or improper about raffling off one month's dues, gift cards, bottles of wine, a dinner at a local restaurant, etc. to help achieve quorum One month's dues can be refunded to the owner out of the general account. The mail-in ballot envelope with the person's name and address can be used as the raffle ticket for the drawing. Normally, any entity that wishes to use a raffle as a means of raising funds must register with the Office of the Attorney General. (Penal Code § 320.5) However, raffles are exempt if they do not require any of the participants to pay for a chance to win. Since the raffle is being used to meet quorum requirements rather than raise money, associations do not need to register the raffle with the Attorney General's Office.

Board Quorum Not Needed. A board quorum is not needed at membership meetings. A quorum of directors is needed for board meetings. For membership meetings, a quorum of members not directors is needed. The president, however, needs to be present to conduct membership meetings (or someone in the president's place).

Loss of Quorum. Members at a duly called meeting at which a quorum is present may continue to transact business notwithstanding the withdrawal of enough members to leave less than a quorum. Actions may continue to be approved if approved by at least a majority of the members required to constitute a quorum. (Corp. Code § 7512(c).)

REDUCED QUORUM
Bylaw Reduced Quorum. Because of the difficulty in achieving a quorum, many associations have a descending quorum in their bylaws, e.g., 50% for the first meeting and 25% for the second. In the absence of a quorum, the meeting can be adjourned to a later date as described in the bylaws or the Corporations Code--by vote of a majority of the votes represented either in person or by proxy, but no other business may be transacted. (Corp. Code § 7512(d).) If a quorum cannot be obtained, the chair calls the meeting to order, announces the absence of a quorum, and entertains a motion to adjourn the meeting to a later date with appropriate notice. Members who mailed in their ballots need not be present. NOTE: See Pre-Ballot Notice Requirements

Statutory Reduced Quorum to 20%. For those associations that do not have provisions for a reduced quorum, beginning January 1, 2024, the Davis-Stirling Act allows for a reduced quorum of 20% for the election of directors (but not for recall elections). (Civ. Code § 5115(d)(2).)  If the association relies on the reduced quorum provision in the Act, it may adjourn the meeting to a later date where the quorum requirement reduces to 20%.  (Civ. Code § 5115(d)(2).) Procedurally, the chair of the meeting (the president of the association) consults with the inspector of elections to determine their availability on a particular date. The chair then adjourns the meeting to that date, which must be at least 20 days after the adjourned proceeding. No less than 15 days prior to the new meeting date, the association must provide general notice of the meeting, which includes (A) The date, time, and location of the meeting, (B) The list of all candidates, and (C) A statement that 20 of the membership present or voting by proxy or secret ballot will satisfy the quorum requirements for the election of directors and that the ballots will be counted if a quorum is reached. 

New Meeting Date. The window for holding an adjourned meeting is normally found in the bylaws and will vary from association to association. Typical language will state "no less than 5 days and no more than 30 days." However, if an association relies on the reduced quorum provision in the Davis-Stirling Act, the window for holding the meeting is not less than 20 days after a scheduled election.  (Civ. Code § 5115(d)(2).) 

Notices to Membership. If an association does not have a reduced quorum option in its bylaws, it must send two notices if it intends to utilize the statutory reduced quorum. Section 5115(b)(5) requires a notice to the membership about the 20% option at least 30 days before ballots are distributed. Section 5115(d)(3) requires a second notice if the 20% option is actually triggered. No less than 15 days prior to the reconvened meeting date, the association must send a second notice which includes (i) the date, time, and location of the reconvened meeting; (ii) the list of all candidates; and (iii) a statement that 20% of members present in person or by proxy or ballot will satisfy the quorum requirements and ballots will be counted if a quorum is reached.

Director Terms Following a Delayed Quorum. When quorum is not reached on the initial ballot and existing directors are held over for 30 or 60 days, when does the term start and end for the newly elected directors? Their service starts when directors are officially elected, just as with any election. When the term ends depends on the bylaws. If the bylaws require that annual meetings (and director elections) be held on or about the same date each year, then director terms end the following year with the election of new directors. For example, assume the bylaws require a January 30 annual meeting and one-year terms for directors. If there were two attempts at making quorum that lasted 60 days, the newly elected directors start their term of office on March 30. They would then be up for reelection 10 months later at the next January 30 annual meeting. If the bylaws call for annual meetings to occur within 12 months of the last annual meeting, the next annual meeting would be in March and directors will have served a full 1-year term. Even so, the board could decide to voluntarily shorten their terms so as to keep the January election cycle.

NO QUORUM - ADJOURNMENT
Number of Attempts. There is no required number of attempts to meet quorum. If it is clear the membership is not interested in participating, the board can stop soliciting ballots. For example, if an association has 100 units and only 9 members send in their ballots, it's pretty clear no one is interested, which means reaching a 50% or even 30% quorum may not be achievable. If quorum is within striking distance, directors should put in the effort to round up more votes. If quorum is not within reach, the board is not required to waste time, money, and energy trying to get members to participate.

Ballots Unopened. If quorum cannot be reached, ballots are left unopened if a petition is going to be filed with the court to lower the quorum requirement for the election of directors or to amend the governing documents. Otherwise, ballots could be opened at the discretion of the board of directors.

Court Petition to Reduce Quorum. If the failure to hold an annual meeting is due to a lack of quorum, the board or any member can file a petition with the court to lower the quorum requirement to the number of ballots cast. (Corp. Code § 7515.) The management company on its own has no legal authority to file a court petition. That right is reserved for an association board and members.

Industry Practice. Most associations forgo the legal expense of a court petition and leave the existing board in place. Such action is indirectly provided for in Robert's Rules of Order: "[I]f a quorum fails to appear at a regular or properly called meeting, the inability to transact business does not detract from the fact that the society's rules requiring the meeting to be held were complied with and the meeting was convened--even though it had to adjourn immediately." (Robert's Rules, 11th ed., p. 347.)

Directors Remain In Office. The Corporations Code allows that "Except as otherwise provided in the articles or bylaws, each director, including a director elected to fill a vacancy, shall hold office until the expiration of the term for which elected and until a successor has been elected and qualified, unless the director has been removed from office." (Corp. Code § 7220(b).)

Appoint New Directors. To place new directors on a board where apathy derails annual elections, directors can resign their seats so new directors can be appointed to the board. However the matter is handled, the board must publish its decision to the membership. If members are unhappy with the board's decision, they have the right to file their own petition with the court to reduce the quorum requirements. (Corp. Code § 7515(a).)

Holdover Impact on Staggered Terms. When directors are kept in place for another year because voter apathy derailed the election, the 1-year delay in the election cycle will impact boards with staggered terms--they get out of sync. Boards will need to adjust terms to reset the staggered sequence.

For example, if a 5-person board with 2-year staggered terms goes through an election cycle that fails to make quorum when two directors were up for election, the two directors carry over to the next election when the other three seats are up for election. Their seats would also be up for election, which means all five seats are on the ballot. To keep the staggered terms intact, three candidates receiving the highest number of votes would be elected to 2-year terms and the next two with the highest votes would be elected to 1-year terms. One year later, they would be up for re-election but this time to 2-year terms. This keeps the staggered election cycle intact.

ELIMINATING QUORUM
Almost all associations have trouble achieving a quorum at their membership meetings. Nagging owners to send in their ballots is the traditional and largely unsuccessful method for encouraging participation. There are three ways to deal with the problem. Boards can (i) continue scheduling meetings until they achieve quorum, or (ii) go to court for an order lowering quorum to the number of votes cast (which is only good for the meeting in question) or (iii) leave the existing board in place and put their energies into amending the association's bylaws to eliminate quorum requirements for the election of directors.

No Benefit to Quorum. As most associations already know, requiring a quorum only causes aggravation and expense. Many owners will either sign blank proxies or send blank ballots to help meet quorum. That does not make for better elections. Forcing owners to vote may decrease the quality of elections if people don't care and simply vote for the first name on the ballot. People who care about the election should decide the outcome.

Normal Election Process. By eliminating quorum requirements for the election of directors, board elections become like all other elections at the municipal, state, and federal levels. In other words, elections are determined by those who are interested enough to vote. This eliminates wasted time and money holding multiple meetings trying to achieve a quorum. The Davis-Stirling Act anticipates the removal of quorum requirements: A quorum shall be required only if so stated in the governing documents of the association or other provisions of law. (Civ. Code § 5115(d).)

Recommendation: In addition to eliminating quorum requirements for the election of directors, associations should consider eliminating cumulative voting and proxies.

 How to Simplify Elections

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

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