Need Help With Question on HOA By-Laws

[NoiseBoy]

I am the secretary for our HOA. We have 36 lot owners in the association with a 5 member board of managers that is elected at the one annual meeting that is called for in the By-Laws. Attendance at the annual meetings is always pretty weak I think because our association is really only concerned with getting the grass mowed and the snow plowed. Our annual dues are only $400 if paid by January 31st, and $480 thereafter. We have never had more than 10 lot owners attend an annual meeting and this year we had 8.

Because we collect far less than $100,000 in dues, we must abide by the rules in the Illinois General Not For Profit Corporation Act. That act states the following:

Sec. 107.60. Quorum of members entitled to vote. Unless otherwise provided by the articles of incorporation or the bylaws, members holding one-tenth of the votes entitled to be cast on a matter, represented in person or by proxy, shall constitute a quorum for consideration of such matter at a meeting of members.

However, our by-laws contain these paragraphs:

E. A majority of the lot owners shall constitute a quorum for the meetings of the association.
H. Voting shall be on one vote/lot basis.
BB. The affirmative vote of a majority of the lot owners shall be required to modify or amend the by-laws.

My question is around how we can take any action at all since our by-laws call for a majority vote of all of the lot owners, yet most lot owners never participate in the meetings. To date, we've proceeded by using a majority vote of the lot owners who attend the annual meetings, which has always met the 10% threshold, but that seems like it isn't a correct practice. Is it safe to proceed as we have been doing, or do we need to try to change the by-laws, specifically paragraph E, to allow for a lower quorum threshold? And yes, all of this is because we have a newish lot owner that is stirring the pot.

 

[MBAustin]

I'm not familiar with HOA bylaws but have worked on bylaws for several non-profits. It seems you need to change the bylaws to reduce your quorum to something realistic, or to specify that quorum is as required by the nonprofit corporation act.

If your bylaws don't include an option for voting other than in-person, you might also add a provision to allow for online (ZOOM or equivalent) meetings - we have done this with our church bylaws, for example. That might also help with the quorum issue.

How you get enough people to show up for the meeting to change the bylaws is another issue. Maybe have a raffle/door prize, or make it a cookout/happy hour/festive occasion? Good luck!

 

[Texas Proud]

get proxies from others

 

[gromit]

Our HOA sends out a written notice of the annual meeting, along with a proxy form. A homeowner can proxy their votes by signing the form and designating to whom they want to have their vote.

 

[CaptTom]

Yes, proxies are the key, if your by-laws allow them. If not, you still might be OK if the by-laws don't specify that the voting member has to attend in person.


I agree that getting the by-laws changed in that environment is going to be tough. With so much apathy, the members who don't participate are going to think they're being deliberately excluded or that the board is "up to something" and oppose any change.


I also agree with the suggestion to offer a raffle, a meal, free beer, or whatever you need to get better attendance. And that your by-laws should be amended to specifically allow both proxy voting and remote (Zoom) attendance.

 

[MarieIG]

get proxies from others

This.

If you have a problematic owner, knock on doors and explain the need for the amendment in person (as well as whatever you write in the literature).

 

[NoiseBoy]

Yes, proxies are the key, if your by-laws allow them. If not, you still might be OK if the by-laws don't specify that the voting member has to attend in person.

Yes, our by-laws do allow for written proxy voting. I guess we will have to undertake this as we wanted to amend the by-laws anyway.

I agree that getting the by-laws changed in that environment is going to be tough. With so much apathy, the members who don't participate are going to think they're being deliberately excluded or that the board is "up to something" and oppose any change.

This is the position of the newish lot owner. They have stated that they don't feel that the board is doing enough to notify the other lot owners about the board's actions. This year I mailed annual meeting notices, with the agenda, to all of the non-resident lot owners as well as the member making waves. The turnout wasn't any different than in previous years. I have lived here for nearly 20 years and I know that the neighbors that I am friends with don't come out of apathy. And fear of ending up on the board!

 

[NoiseBoy]

I have a follow up question regarding how the proxies work. Our by-laws state that the proxy is good for 11 months from the date given. If the board is 5 persons, who will all vote in favor of any amendments (for the current board), then is it our goal to collect written proxies from 12 other lot owners granting the board the right to their vote? Say, until the next annual meeting.

 

[Gotadimple]

I have a follow up question regarding how the proxies work. Our by-laws state that the proxy is good for 11 months from the date given. If the board is 5 persons, who will all vote in favor of any amendments (for the current board), then is it our goal to collect written proxies from 12 other lot owners granting the board the right to their vote? Say, until the next annual meeting.

5 board members + enough proxies to equal a majority = 19 in total

There are 36 lots with one vote per lot. A simple majority is 51% or 19. So you need to collect 12 proxies. The 11-month rule is designed to let you conduct business at other meetings other than the annual. If you only do an annual, then you need to repeat collecting proxies every year before an Annual Meeting.

HTH,
- Rita

 

[OldShooter]

... My question is around how we can take any action at all since our by-laws call for a majority vote of all of the lot owners, yet most lot owners never participate in the meetings. To date, we've proceeded by using a majority vote of the lot owners who attend the annual meetings, which has always met the 10% threshold, but that seems like it isn't a correct practice. Is it safe to proceed as we have been doing, or do we need to try to change the by-laws, specifically paragraph E, to allow for a lower quorum threshold? And yes, all of this is because we have a newish lot owner that is stirring the pot.

I suggest you avail yourself of a free call to your state attorney general's office. They have people specifically tasked to assist constituents with questions and problems. Worst case you will get nothing useful. Best case they will solve your problem for you or suggest ways you can solve it for yourself.

IMO this is important because you don't need to give a future litigious homeowner an opportunity to strengthen their case by attacking the board for being guilty of procedural errors.

 

[OldShooter]

IIRC the main way that the NRA panjandrums maintain control is that at every membership renewal they solicit and mostly get cancellable proxies that do not expire. Huge numbers. If the member is physically present at a meeting, then the proxy is suspended. If the proxy is in favor of a board/job title and not an individual name, then it survives even with board turnover.

 

[Time2]

Pass a bylaw everyone will hate, more will show up at the meeting.
We decree all driveways must be remove and corn will be planted in their place. ;-)

 

[CaptTom]

I'd give the members the option to set a shorter time limit for their proxy, right on the proxy form you send them. 11 months may be too broad for some people. I've also been known to put candidate names or yes/no questions right on the proxy form, with check boxes, so the members know their preference is being considered.

I'd send it by both snail mail and e-mail (along with the meeting notice and agenda.) Some people respond better to e-mail than snail mail. But it's hard to argue that you're excluding anyone if you physically mail the required documents to the address of record. That should cover any complaints on that issue.

There will always be malcontents. But if you follow the rules and stay polite they'll often go away, even if they go away mad.

 

[Sunset]

Pass a bylaw everyone will hate, more will show up at the meeting.
We decree all driveways must be remove and corn will be planted in their place. ;-)

Just double the fee and everyone will show up at the next meeting, or OP will have enough $$ in the pot to buy wine at all the board meetings .

 

[Lewis Clark]

...I have lived here for nearly 20 years and I know that the neighbors that I am friends with don't come out of apathy. And fear of ending up on the board!

In my experience, most homeowners don't care enoug to qualify to be apathetic. Until a major problem or issue arises that makes them care.

You may have to knock door to door to get enough proxies for a quorum. I've done this many times.

 

[Philliefan33]

It’s not clear from your post. Do your bylaws specify that a majority vote is needed for every action?

If so, I recommend working to change the bylaws to allow the elected BOD to act in the interest of the community (or some such language). The bylaws of our HOA give the BOD the authority to adopt a budget, pay bills, collect fees, etc. it makes doing business much easier.

 

[Aerides]

Our board recently tried to lower the threshold for a quorum from 70% to 60%. They unfortunately tipped their hand, as they included this change with several others that seemed to be a bit of a power grab.

We purposely didn't even vote. We guessed the odds of reaching a quorum were lower than the odds that the returned votes would be in their favor.

We didn't give our proxy or vote in person.

And 10 our of 36 in attendance sounds pretty good. We typically see about 10-20 out of 700 at the monthly meetings. I stopped going after I made several suggestions to increase attendance, and was met with a wall of "we tried that, people don't want... blah blah" although I've lived her for almost 20 years and have seen zero attempts to try new outreach.

But for your questions, you should speak with a local attorney who specializes in HOA laws for your municipality.

 

[NoiseBoy]

It’s not clear from your post. Do your bylaws specify that a majority vote is needed for every action?

The by-laws do give the board the power to take actions such as to prepare a budget, set the annual fee and etc. We are only required to have one meeting per year, in June, and the by-laws state that notices can be mailed or delivered. I have been taping notices to the windows next to everyone's front doors. The squeaky wheel complained about that, so I snail-mailed their annual notice. They want us to do that for every communication, but I talked to a couple of residents who didn't attend the meeting, and they are fine with hand delivered notices.

Thanks for all of the feedback. I'm going to share this information with the rest of the board and then see if there is a state resource we can talk to. We do have an attorney, but I'd like to see if there is a free resource we can consult before resorting to paying to get some answers . By the way, we got 10 owners to show up last year because one of the agenda topics was about approving private fenced yards. They are excluded in our covenants but the squeaky wheel wants to fence in their yard. That's the real issue. They bought a duplex in an association that doesn't allow privacy fences, but want to do it anyway. The overwhelming message from last year's meeting, as in 9 to 1, is that our homeowners just want us to mow the grass, plow the snow, and keep the fees low. In other words, business as usual.

 

[Midpack]

Proxies are essential. If a vote fails to achieve a quorum, our HOA just reduces the quorum requirement by half and holds another vote (repeat if necessary, see below). We're usually successful getting enough proxies on the first try, but we recently had a special assessment to redo the pool that took two tries (that's the only reason I know what our process is).

Look on the bright side. Attendance at our HOA meetings, or special meetings to vote, are NEVER well attended. I went to my first annual meeting when we moved here and there were 5 board members and 4 households (of 160+ lots). Our board members tend to be re-elected - because they do such a good job.

HOA meetings in my last neighborhood were SRO with about a hundred homeowners (of 800 lots), and they were so ugly and unproductive I quit attending. HOA board turned over every election. The homeowners who attended were totally unrealistic, they always wanted more service and lower dues, and they openly insulted board members. And board members just plowed through the agenda as quick as they could get away with.

Poor attendance at HOA meetings is a sign the board is doing a good job.

 

[zinger1457]

The HOA in my community (~70 homes) doesn't exist anymore, couldn't get anyone to run for the board and no one showed up to the meetings. Our HOA only existed to enforce the CC&R's, we have no common areas to maintain. The CC&R's can still be enforced but it would take an individual to file a claim in court against another.

 

[Philliefan33]

The by-laws do give the board the power to take actions such as to prepare a budget, set the annual fee and etc. We are only required to have one meeting per year, in June, and the by-laws state that notices can be mailed or delivered. I have been taping notices to the windows next to everyone's front doors. The squeaky wheel complained about that, so I snail-mailed their annual notice. They want us to do that for every communication, but I talked to a couple of residents who didn't attend the meeting, and they are fine with hand delivered notices.



Thanks for all of the feedback. I'm going to share this information with the rest of the board and then see if there is a state resource we can talk to. We do have an attorney, but I'd like to see if there is a free resource we can consult before resorting to paying to get some answers . By the way, we got 10 owners to show up last year because one of the agenda topics was about approving private fenced yards. They are excluded in our covenants but the squeaky wheel wants to fence in their yard. That's the real issue. They bought a duplex in an association that doesn't allow privacy fences, but want to do it anyway. The overwhelming message from last year's meeting, as in 9 to 1, is that our homeowners just want us to mow the grass, plow the snow, and keep the fees low. In other words, business as usual.

If the covenants prohibit privacy fences, the BOD cannot allow one to be built. Do not compromise on this or it will bite you in the butt.

 

[Koolau]

We never have problems getting proxies returned. I don't know why. A significant share of our owners do not live in the building but rent out their apartments full time. I think it's about 40% rental by owner.

Compliance with proxy request may be because our HOA dues are almost $1000/month. Not sure

 

[MarieIG]

We never have problems getting proxies returned. I don't know why. A significant share of our owners do not live in the building but rent out their apartments full time. I think it's about 40% rental by owner.

Compliance with proxy request may be because our HOA dues are almost $1000/month. Not sure

That would do it.

 

[Lewis Clark]

Thanks for all of the feedback. I'm going to share this information with the rest of the board and then see if there is a state resource we can talk to.

Might be worth looking to your local chapter of the Community Associations Institute. If you have to join for one year to get the assistance you need it may be worth it.
https://www.caionline.org/pages/default.aspx

Good luck!