Absent a Quorum

[anon]

In 2019 Washington State enacted requirements for condominium associations to "...set a date for a meeting of the unit owners to consider ratification of the budget not less than fourteen nor more than fifty days after providing the budget. Unless at that meeting the unit owners of units to which a majority of the votes in the association are allocated or any larger percentage specified in the declaration reject the budget, the budget and the assessments against the units included in the budget are ratified, whether or not a quorum is present."

My condominium bylaws invoke the current edition of RONR, identify two types of owner meetings (special and annual), and require roll call as the first order of the day at owner meetings.

If notice of an owner's meeting is issued for the purpose of ratifying the budget, and there is no quorum in attendance at this meeting (as verified by the required roll call), is it proper for the managing agent or Board Treasurer to provide a budget presentation with comments, questions, and answers to follow? Or should the only business be roll call, budget ratification (i.e., motion to reject the budget, debate if the motion is seconded, any incidental motions, and a vote), and adjournment?

Is there any way a budget presentation could be interpreted to be part of a program rather than association business even though the assembly will be considering budget ratification for action immediately following this presentation? Can the Chair impose time-limited round robin restrictions for the comment, question, and answer session that follows this presentation without a two-thirds vote for approval by the assembly?

[Gary Novosielski]

You would not use a motion to reject the budget.  The proper motion is one to approve the budget. Then, according to the state regulation you quoted, a majority of No votes would be required to reject the budget.  The only actual difference between this an any other main motion is that a tie vote would pass the motion.

If the meeting does not have a quorum, then ordinarily no substantive business can be conducted, but since there is a exception in the case of budget approval, you are free to move approval of the budget even in the absence of a quorum.  Since the budget proposal becomes an integral part of the motion, I see no reason why a presentation explaining the contents of the proposal while the motion is actually being debated would be any problem.

Also, unless there are some applicable rules you haven't mentioned, the debate on the budget would include not just comments, questions, and answers, but also amendments and other subsidiary motions.

The chair cannot change debate limits without the agreement of the assembly.  Limiting or extending the limits of debate requires a 2/3 vote.  

Edited December 27, 2019 at 02:13 AM by Gary Novosielski

[anon]

"Absent a Quorum
Gary Novosielski replied to anon's topic in General Discussion

You would not use a motion to reject the budget. The proper motion is one to approve the budget. Then, according to the state regulation you quoted, a majority of No votes would be required to reject the budget. The only actual difference between this an any other main motion is that a tie vote would pass the motion."

What is your basis for forming a motion statement with the affirmative vice negative vernacular?

Since the state requires 51% of the entire association to reject the budget, a motion for budget approval vice rejection would not allow for a proper determination. For example, 31% voting interest present votes for approval of the budget and 42% voting interest present votes against approval of the budget. You would conclude the budget is rejected based on the results, yet the state requirement for 51% rejection was not met and therefore the budget is approved.

I'm intrigued by the focus on how a tie would be handled and I assume that is why you have forced the motion to be one that assumes the desired outcome as approval. However, again since the state requires 51% of the entire association's voting interest for rejection there would be no possibility of a tie and the budget would automatically be approved in the absence of the 51%. Edited December 27, 2019 at 10:08 PM by anon
to add the relevant quote

[Guest Zev]

1 hour ago, anon said:

What is your basis for forming a motion statement with the affirmative vice [sic] negative vernacular?

 

1 hour ago, anon said:

Since the state requires 51% of the entire association to reject the budget, a motion for budget approval vice [sic] rejection

The proper word is "versus," not "vice."

[Gary Novosielski]

Upon more careful reading of the statute language, it appears that your example #1 is exactly what the state is trying to accomplish, i.e., to make abstentions and absentees count as Yes votes to ratify the budget.

But I still say that the motion should be to ratify, not to reject.  Switching the meaning can't make a desired outcome more likely, and if the motion to reject fails, then the motion is presumably ratified without anyone having moved to ratify it.  That may make the state happy, but I'm sure it won't make sense in light of your bylaws.

In general, motions should (almost always) be affirmative statements.  Rejecting a negative statement is not the same as approving its opposite.  Rejecting a motion just does nothing.

The way that you reject an action is to vote No on the motion to do the action.  A vote to reject is a No vote, it's that simple.  If you start allowing motions where voting Yes means don't do it, you're asking for trouble.  People expect to vote Yes when they are in favor of something, like a budget.  And if you don't phrase the motions that way, you're going to have people calling you up the next day, saying, "Hey, I voted Yes and I was counted as voting against the budget! What are you people up to?" 

Edited December 29, 2019 at 03:03 AM by Gary Novosielski

[anon]

22 hours ago, Gary Novosielski said:

Upon more careful reading of the statute language, it appears that your example #1 is exactly what the state is trying to accomplish, i.e., to make abstentions and absentees count as Yes votes to ratify the budget.

But I still say that the motion should be to ratify, not to reject.  Switching the meaning can't make a desired outcome more likely, and if the motion to reject fails, then the motion is presumably ratified without anyone having moved to ratify it.  That may make the state happy, but I'm sure it won't make sense in light of your bylaws.

In general, motions should (almost always) be affirmative statements.  Rejecting a negative statement is not the same as approving its opposite.  Rejecting a motion just does nothing.

The way that you reject an action is to vote No on the motion to do the action.  A vote to reject is a No vote, it's that simple.  If you start allowing motions where voting Yes means don't do it, you're asking for trouble.  People expect to vote Yes when they are in favor of something, like a budget.  And if you don't phrase the motions that way, you're going to have people calling you up the next day, saying, "Hey, I voted Yes and I was counted as voting against the budget! What are you people up to?" 

As you said, the state is concerned about passive condominium owners preventing board action and hindering proper management of the condominium. Absentees in sufficient numbers so as to prevent a majority present and casting in favor of a budget are the norm for many condominiums. Before the state imposed this requirement many boards had sole authority for budget approval. So in effect, the state is saying if you care so much about rejecting the board's budget you must plan on attending a meeting with sufficiently like-minded members to do so. Reject the rejection by saying No, or abstain (better yet, don't bother to be present) in sufficient numbers so as to form a majority against rejection.

I agree it may cause confusion and I have seen plenty of legal challenges over the way state ballots are written with regard to votes in the affirmative.

[Shmuel Gerber]

On 12/26/2019 at 4:39 PM, anon said:

In 2019 Washington State enacted requirements for condominium associations to "...set a date for a meeting of the unit owners to consider ratification of the budget

It says right there in the rule you quoted that the unit owners are to consider ratification of the budget (not rejection of it).

So I would assume that any rejection is accomplished by a sufficient vote against a motion to ratify (a.k.a. approve) the budget.

Without knowing more about the applicable rules, I also would not assume that amendments to the budget are in order at the ratification meeting.

[anon]

On 1/3/2020 at 4:09 AM, Shmuel Gerber said:

It says right there in the rule you quoted that the unit owners are to consider ratification of the budget (not rejection of it).

So I would assume that any rejection is accomplished by a sufficient vote against a motion to ratify (a.k.a. approve) the budget.

Without knowing more about the applicable rules, I also would not assume that amendments to the budget are in order at the ratification meeting.

But as stated, the second sentence of the statute says, " Unless at that meeting the unit owners of units to which a majority of the votes in the association are allocated or any larger percentage specified in the declaration reject the budget, the budget and the assessments against the units included in the budget are ratified, whether or not a quorum is present."

To me this says a majority of votes is required to reject the budget. This avoids stagnation in the event that there are not enough voting members attending condominium meetings (a rather common problem for condominiums). So the statute frames the question in a way that ensures a lack of votes will result in ratification of the board's adopted budget resolution, rather than reverting to the last ratified budget which could harm the association due to insolvency or failure to meet other critical financial needs. Thus the statute says ratification is automatic when a quorum is lacking. Otherwise, the statute would be expecting a motion for budget ratification to be adopted by a majority vote of the entire association in the absence of a quorum (i.e., a majority). That is not logical. It doesn't work that way.

My questions are geared toward what business can be conducted when a quorum is not present. The state mandated a situation wherein the business of budget ratification can be conducted without a meeting quorum. Some forum members have suggested the managing agent or a board member can make a budget presentation. To me, this is business and cannot be conducted without a quorum. It also wreaks of partiality, giving an unfair advantage to the board with regard to any debate that may be conducted as part of the state sanctioned business related to administering the motion. The chair, and the chair's representatives, should be given no more time to address the budget for ratification than any other association member. Same comment with regard to allowing owner comments unconnected to the debate associated with the motion.

The chair should not be allowed to entertain anything but the roll call (required by the declaration; orders of the day), proof of meeting notice (required by the declaration), motion to reject the budget (if any; statutory requirement), and adjournment (required by the declaration). On what grounds do you support doing otherwise?

[Gary Novosielski]

You seem immune to becoming informed.  The proper motion is to ratify the budget because that is the stated purpose of the meeting.

The way to reject the budget (the only proper way) is to vote No on the motion to ratify.

You are now free to go do as you please, but you have been informed of the proper method.

I'm done.

 

 

Edited January 5, 2020 at 12:47 AM by Shmuel Gerber
Partial deletion by the moderators

[Atul Kapur]

Let's step back for a moment. If you do not have a quorum, I would say that the motion to ratify the budget (which is the proper one, not "reject") should not even be put in front of the meeting for consideration. It is not one of the motions that is in order in the absence of a quorum.

So then, you might ask, what is the status of the budget? As a non-lawyer, I would say that the Washington statute deems that the budget has been ratified. The condition of holding a meeting was met.

If you do not have a quorum at the meeting, it would be impossible to have a majority of the total votes of the association cast against ratification (unless you have some very unusual quorum requirements). So that part of the statute does not come into play at all.

Once the meeting has been adjourned, the budget presentation can be made to anyone who wishes to stay in the hall to hear it.

Again, non-lawyer's interpretation, so worth less than the paper it's not written on.

If meeting does have a quorum, then the motion to ratify should be put before the meeting. It would require a majority of the votes in the association to vote "No" for this motion to be not adopted (aka "rejected").

[Gary Novosielski]

But the statute did say something about whether or not a quorum is present, so the motion would apparently be allowed in the absence of a quorum.

[Atul Kapur]

Actually, we are told that the statute says

"Unless at that meeting the unit owners of units to which a majority of the votes in the association are allocated or any larger percentage specified in the declaration reject the budget, the budget and the assessments against the units included in the budget are ratified, whether or not a quorum is present."

So I (as a non-lawyer) read that as saying "unless the majority reject the budget" it is ratified. I read the last clause "whether or not a quorum is present" as saying that, even if there is not a quorum and that is the reason the motion could not be voted on, then it is still deemed ratified.

So, four possible outcomes:
1) a motion to ratify the budget is adopted: The budget is ratified.
2) the motion is lost, but the negative vote is not a majority of the entire association: The budget is ratified.
3) the motion is lost and the negative vote is a majority of the entire association: The budget is rejected.
4) the motion is not considered due to a lack of a quorum: The budget is ratified.

[Shmuel Gerber]

1 hour ago, Atul Kapur said:

1) a motion to ratify the budget is adopted: The budget is ratified.
2) the motion is lost, but the negative vote is not a majority of the entire association: The budget is ratified.
3) the motion is lost and the negative vote is a majority of the entire association: The budget is rejected.

I disagree with the description of these three possibilities. You seem to be assuming that there is some other voting threshold by which the motion to ratify is "adopted" or "lost" (although you don't say what it is). But actually, in this case, according to the rule quoted, the vote required on a motion to ratify the budget is any vote in which the negative vote is less than a majority of the votes in the association. I don't think it makes sense to say that a motion to ratify is lost when in fact the affirmative side prevails.

A somewhat analogous situation under the rules in RONR is a motion to Rescind and Expunge from the Minutes. If such a motion attains a majority vote, but less than a majority of the entire membership, the motion is not "adopted but rejected"; it is simply rejected.

1 hour ago, Atul Kapur said:

4) the motion is not considered due to a lack of a quorum: The budget is ratified.

You're probably right that the motion should not be considered if there is no quorum present, but I'm not sure — and I'm not sure it makes much difference.

[Atul Kapur]

1 hour ago, Shmuel Gerber said:

You seem to be assuming that there is some other voting threshold by which the motion to ratify is "adopted" or "lost" (although you don't say what it is).

The assumption is a majority vote--The Basic Requirement (to coin a phrase).

The reason I separate the adoption of the motion to ratify and the status of the budget is because of the fourth scenario where the motion is not considered at all. I was trying to highlight how best to adhere to RONR (majority vote on adoption of motion) and statute (status of the budget). I was also trying to word it in a way that aligned with the OP's posts. That is why I didn't simply go with your definition of the threshold, "any vote in which the negative vote is less than a majority of the votes in the association"; which only applies if the motion was voted upon. I agree that it would simplify things by reducing the number of scenarios from 4 to 3.

Edited January 6, 2020 at 01:54 AM by Atul Kapur

[Dan Honemann]

13 hours ago, Shmuel Gerber said:

But actually, in this case, according to the rule quoted, the vote required on a motion to ratify the budget is any vote in which the negative vote is less than a majority of the votes in the association. 

Since in this case the affirmative vote is intrinsically irrelevant, should the chair call for only the negative vote?

[Shmuel Gerber]

7 minutes ago, Daniel H. Honemann said:

Since in this case the affirmative vote is intrinsically irrelevant, should the chair call for only the negative vote?

That's an interesting question. I suppose so, except that in this case I'm guessing that, in order to account for weighted votes and/or proxies, the vote would anyway have to be taken by some sort of ballot or roll call, rather than by rising or show of hands.

[Shmuel Gerber]

22 minutes ago, Daniel H. Honemann said:

Since in this case the affirmative vote is intrinsically irrelevant, should the chair call for only the negative vote?

 

6 minutes ago, Shmuel Gerber said:

That's an interesting question. I suppose so, except that in this case I'm guessing that, in order to account for weighted votes and/or proxies, the vote would anyway have to be taken by some sort of ballot or roll call, rather than by rising or show of hands.

Also, some people might say that if a quorum, but less than a majority of the total ownership, is present, then the entire vote is intrinsically irrelevant and should not be taken. 🙂

(I'm not sure I'm one of those people.)

[Dan Honemann]

13 minutes ago, Shmuel Gerber said:

 

Also, some people might say that if a quorum, but less than a majority of the total ownership, is present, then the entire vote is intrinsically irrelevant and should not be taken. 🙂

(I'm not sure I'm one of those people.)

If I remember correctly, in this case the absence of a quorum does not prevent rejection, it ensures rejection, but I'm not anxious to pursue this either.  

[anon]

On 1/6/2020 at 6:30 AM, Daniel H. Honemann said:

If I remember correctly, in this case the absence of a quorum does not prevent rejection, it ensures rejection, but I'm not anxious to pursue this either.  

In the absence of a quorum the Board's proposed budget would be approved unless a majority vote of the entire association rejects the budget. I believe this is saying the same thing stated in the above quote.

In my case, per our Bylaws, a quorum is 60% of the voting interest of the entire association and a majority vote is 51% of the voting interest present. However, the state requires a majority (more than 50%) of the entire association's voting interest to reject the budget. A special meeting was called to order and our chair asks if anyone wants to make a motion to reject the budget. No one did. Meeting over. Budget automatically ratified per state law. At least that's what should have happened. In my case the chair failed to conduct a roll call as required by the orders of the day in our Bylaws. I called for the orders of the day to get results for verify presence of a quorum. The chair dismissed my request on the grounds that the chair was in charge of the meeting agenda. I objected and made a general statement that the Bylaws allow for a motion to be made to authorize changes to the orders of the day, but that a quorum would be needed to allow this business transaction, the chair said I could leave if I didn't like it. Due to my own ignorance on RORN requirements (working on fixing that now), I failed to press for an appeal and a second from someone for a vote to overrule the chair. It turned out to be all for not, as we only had 59% of the voting interest present (no quorum after all).

You all have all raised some very interesting questions. My sincere thanks and apologies if it seems I have been immune to being told the right way to do things as suggested by one forum poster. I would appreciate it if anyone can point me to the citation where RORN says every motion must be phrased in the affirmative form. I will continue to search for evidence of this myself since some important stuff in our Declaration and now our state law is posited in the negative form (e.g., ... unless there is unanimous consent NOT to ...). 

I did see where one forum poster agrees in the absence of a quorum no business should be conducted with the exception of the statutory requirement to call for the meeting and see if someone makes the proper motion with regard to the Board's proposed budget. So, a budget presentation would not be in order if there is no quorum. I can also see how, as someone has suggested, people can get together afterwards to go over anything they want to on their own time - it's just not part of an official association meeting.

[anon]

On 1/4/2020 at 3:41 PM, Gary Novosielski said:

The proper motion is to ratify the budget because that is the stated purpose of the meeting.

The way to reject the budget (the only proper way) is to vote No on the motion to ratify.

 

 

I agree with the above conclusion.

In thinking about MR. Atul Kapur's four possible outcomes, and in consideration results at my association's special meeting for budget ratification, I think there may be a problem with lack of a motion to ratify the budget. You can't assess voting outcomes without a motion of some kind.

As you have indicated, the state says a meeting must be held to ratify the budget and this is synonymous with a requirement for a motion to be made to vote on budget ratification.

The chair simply asked if there was a motion to reject the budget, and there was none. It would be incorrect to conclude the budget is therefore automatically ratified based solely on the state's position that failure of a majority of the entire association to reject the budget automatically results in passage of the budget whether or not a quorum exists.

No motion. No vote. No budget ratification. Am I understanding you correctly?

[Atul Kapur]

No you are not.

1 hour ago, anon said:

As you have indicated, the state says a meeting must be held to ratify the budget and this is synonymous with a requirement for a motion to be made to vote on budget ratification.

That is not at all what I said. Requiring that a meeting be held is not synonymous with requiring a motion to be made.

No quorum. No motion. No vote. No rejection of the budget has occurred. So look at what the statute says happens if there is not a rejection. As a non-lawyer, I read the statute to say that the budget is ratified, even though there was no opportunity to reject it because there was no quorum.

[Gary Novosielski]

On 1/10/2020 at 2:38 PM, anon said:

I agree with the above conclusion.

In thinking about MR. Atul Kapur's four possible outcomes, and in consideration results at my association's special meeting for budget ratification, I think there may be a problem with lack of a motion to ratify the budget. You can't assess voting outcomes without a motion of some kind.

As you have indicated, the state says a meeting must be held to ratify the budget and this is synonymous with a requirement for a motion to be made to vote on budget ratification.

The chair simply asked if there was a motion to reject the budget, and there was none. It would be incorrect to conclude the budget is therefore automatically ratified based solely on the state's position that failure of a majority of the entire association to reject the budget automatically results in passage of the budget whether or not a quorum exists.

No motion. No vote. No budget ratification. Am I understanding you correctly?

You are understanding me correctly, I believe.

I disagree with Mr. Kapur as regards the quorum requirement.  Since the statute states that a vote to ratify or reject the budget can occur even in the absence of a quorum, it is my belief that this implies that the motion to ratify may be made even in the absence of a quorum.

[Shmuel Gerber]

On 1/8/2020 at 7:24 PM, anon said:

In the absence of a quorum the Board's proposed budget would be approved unless a majority vote of the entire association rejects the budget. I believe this is saying the same thing stated in the above quote.

In my case, per our Bylaws, a quorum is 60% of the voting interest of the entire association and a majority vote is 51% of the voting interest present. However, the state requires a majority (more than 50%) of the entire association's voting interest to reject the budget.

If the rules you've cited are applicable, I would venture to say that if more than half of the ownership is present at the meeting, then the ordinary quorum requirement of 60% (specified in the bylaws, not the declaration) has no bearing on the vote to ratify the budget. If a majority of the ownership wants to reject the budget, they apparently have the legal right to do so, so the quorum for that purpose should be a considered a majority rather than 60%.

[Shmuel Gerber]

1 hour ago, Gary Novosielski said:

You are understanding me correctly, I believe.

But, if I understand correctly, I don't think you're understanding anon's latest post correctly, or you wouldn't say that he's understanding you correctly.

(See, this is what happens when you become undone.)

[Gary Novosielski]

Have I become undone?  

(checks fly)