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HOA special assessment vote


RobertJ

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An HOA holds a special homeowners meeting to vote on a special assessment for earthquake insurance.  The governing documents (Conditions,Covenants, and Restricitions - CC&R's) state that a majority of the homeowners must approve a vote for obtaining earthquake insurance.  The first meeting does not meet quorum requirements and the meeting is adjourned to 28 days later.  The bylaws state that the quorum requirement drops to 25% for an adjourned meeting.  At the adjourned meeting the quorum requirement is met but there are ballots for less than 50% of the homeowners so there couldn't be a majority of the homeowners voting yes with less than 50% of the votes cast.  At the adjourned meeting, it is moved and approved by a majority of homeowners present to not count the votes since there won't be enough votes to approve the special assessment. 

 

The election rules adopted by the HOA as required by state law state that the results of the special assessment vote must be disclosed to the homeowners within 15 days of the homeowner's meeting. The adjourned meeting was three days ago. Can the homeowners and Inspectors of Election present at the adjourned meeting reconvene the homeowner's meeting to count the votes and then have the result mailed out within the 15 day time limit?  

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Assuming that the adjourned homeowner's meeting can't be reconvened to count the votes and the special assessment vote has failed due to not receiving the required number of yes votes, is there any reason why the unopened ballots couldn't be opened and counted at an HOA Board meeting?  The election rules state that the votes can be counted at a homeowner's meeting or a homeowners association board meeting.

 

Thank you for any and all responses.

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An HOA holds a special homeowners meeting to vote on a special assessment for earthquake insurance.  The governing documents (Conditions,Covenants, and Restricitions - CC&R's) state that a majority of the homeowners must approve a vote for obtaining earthquake insurance. 

Robert, can you quote EXACTLY what the bylaws say about the vote requirement to approve the special assessment?

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Assuming that the adjourned homeowner's meeting can't be reconvened to count the votes and the special assessment vote has failed due to not receiving the required number of yes votes, is there any reason why the unopened ballots couldn't be opened and counted at an HOA Board meeting?

Yes. The membership adopted a motion explicitly stating that the votes would not be counted. Only the membership - not the board - can change an action of the membership.

Your best option, if it's possible to give enough notice and to get a quorum, is to call a special meeting (not a "reconvened" meeting, but a new meeting) of the membership to resolve the issue. If that's not possible, the other option is for the board to go ahead and count the votes, notwithstanding that it lacks the authority to do so, and pray that the membership ratifies this action at its next meeting. Considering the legal requirement, it seems like a reasonably safe bet, but there's always some element of risk in the pray for ratification strategy, so if should be saved as a last resort.

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Well, it's probably not feasible to call another membership meeting to decide what to do with the votes that weren't counted.  A quorum for that decision probably would not be attained even at an adjourned membership meeting with a 25% quorum requirement.  I like the idea of counting the votes at the next HOA Board meeting and having that action ratified at the next meeting of the membership which would be the Annual Meeting at which Board Members are elected next March.  FYI, the adjourned membership meeting held a few days ago was only attended by the HOA Board Vice President, the three homeowners who volunteered to be Inspectors of Election and the Management Company Community Manager.  Of course, they all should have known better that the votes should have been counted at that meeting.  Those homeowners who volunteered to be Inspectors of Election would be counting the votes at the next Board meeting.

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These homeowners do like having homes, don't they?

 

You might ask them.

 

(Ref.  RONR, 11th Ed., 2011 E. D., p. 347, line 30 & 32.  Yes I memorized all those numbers, because they felicitously add up to the cube root of Pi taken to the 30th digit, which is so cute a number that it makes me think that Pi is a cadet-member of the Kardashians, but my copy of People Magazine didn't arrive this week so who knows.)

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Robert, can you quote EXACTLY what the bylaws say about the vote requirement to approve the special assessment?

 

The HOA Conditions, Covenants and Restrictions (CC&R's) governing document states the following:

 

... the Association shall obtain and maintain earthquake insurance covering the entire Project upon the vote and approval of a majority of all Owners within the Project... 

Based on your response to my question, it appears you are properly interpreting the vote requirement.  I was thinking that maybe....just maybe.... the bylaws required only a "majority vote" rather than the vote of the majority of all owners.

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Yes, there's no getting around the vote requirement.  We'd probably never get "a majority of all owners" to approve earthquake insurance, but we wanted to at least put it to a vote so that when the "Big One" hits (we're in California) the homeowners wouldn't blame the Board members for not at least putting it to a vote.

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