Proposed Bylaw Changes

Hello Riverwalk HOA Members,

There have been some questions from the community regarding the proposed bylaw changes, specifically related to the change to the quorum definition. We recognize it is a complicated topic, and want to do our very best to provide clarity. It is our hope that this post helps to provide additional insight and gives the community the opportunity to ask questions in an open format.
To be clear, the intent is to lower the threshold of members who need to be present to hold an official membership meeting (quorum). It is not our intention to change the thresholds for voting.
What has been proposed is a change to the bylaws definition of a Quorum. 

As background, here are some important items to understand:
Quorum - From the Oxford Dictionary - “the minimum number of members of an assembly or society that must be present at any of its meetings to make the proceedings of that meeting valid.”
Currently, our bylaws state:
2.5 Quorum. For the election of the Board, the presence in person or by proxy at any meeting of the Voting Members (as defined in Section 2.6 of this Article) having 50% of the total votes which may cast shall constitute a quorum. If there is no quorum at the opening of the meeting of the Owners, such meeting may be adjourned from time to time by the vote of a majority of the Voting Members present, either in person or by proxy; and at any adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the original meeting.
Further, a “”Voting Member” is defined as follows in our bylaws:
2.6 Voting Rights. There shall be one person, with respect to each lot Ownership, who shall be entitled to vote at any meeting of the Owners (the “Voting Member”). The Voting Member may be the Owner at one of a group composed of all of the Owners of a Lot, or may be some other person designated by such Owner (s) to act as proxy on his or their behalf, and who need not be an Owner. Each Owner or group of Owners shall be entitled to one vote for each Lot owned provided all Association dues are current. No votes allocated to a Lot or Lots owned by the Association may be cast.

A proxy is defined as a person or agent, who has been authorized by the Voting Member to represent them for the purpose of that meeting. From our bylaws:
2.8 Proxies. The Voting Members may vote either in person or by agents duly authorized by written proxy executed by such Owner or is duly authorized attorney-in-fact. A proxy shall be valid only for the particular meeting designated therein, unless the person executing it specifies therein the length of time for which it is to continue in force, which time shall not extend beyond one year from the date of its execution. Unless a proxy otherwise provides, any proxy older may appoint in writing a substitute to act in his place. In order to be effective, all proxies must be dated and filed with the Secretary or duly acting Secretary of the Association, either during or prior to the meeting in question. A proxy is void if it is not dated.
What does all that mean?
This means that to declare a Membership meeting valid, we would need to have 50%, or 132 “Voting Members” or proxies, present.What we are proposing is to lower the threshold from 50% to 10% to achieve a quorum. 10% is the recommended standard, and it is the “default” by law for HOAs.
Why are we recommending this change?
There are three good reasons to do this:It saves us money.
It allows the Association to officially conduct our business in a valid Membership meeting.
It corrects an unreasonably high threshold, which is not common nowadays.

What is the impact on voting?
The bylaws are very clear on the percentages of affirmative votes by Voting Members required to pass.
First, there is a concept of a Majority Vote:

2.7 Majority Vote. The vote of a majority of the votes cast by the Voting Members present at a meeting at which a quorum shall be present shall be binding upon all Owners for all purposes except where a higher percentage vote is required by the Declaration, these Bylaws or by law.

The important point here is that while a vote may be passed by a majority of the Voting Members present at a valid meeting, there are well defined voting requirements for specific types of actions that require affirmative votes from a percentage of all voting members, not just those at the meeting. Therefore we are not changing the spirit of the voting requirements. Here are some examples:

Bylaws Article II Section 2.10 - Informal Action by Owners - 100% must be in favor
Bylaws Article III Section 3.2 - Election - highest number of votes in a valid meeting or by mail in ballot.
Bylaws Article III Section 3.4 - Removal - board members can be removed with or without cause by 2/3 of voting members.
Bylaws Article III Section 3.9 Managing Agent - ⅔ of voting members
Bylaws Article VI Section 6.3 Special Assessments ⅔ of voting members in a special meeting
Bylaws Article VIII Article 8.2 - Adoption - Bylaws may be changed by not less than a majority of eligible members at a meeting at which quorum is obtained – Note to Members: This requirement to amend the Bylaws is not decreasing. If members agree to amend the Bylaws to decrease the quorum as the Board recommends, the amendment will clarify that the percentage to amend the bylaws remains in its current percentage (i.e. 50% of members must appear at a meeting, and a majority of those must agree to the amendment)

What is the impact if we leave things as they are?
We want to make sure that we are always following guidelines and legalities in our community. An HOA attorney has provided clarity on the topic below.
The Bylaws require a 50% quorum – this means that unless owners of 50% or more of the lots participate, technically no business can occur at the meeting (i.e. a vote cannot be held). If Lookout Riverwalk was formed in 1999 or later, there is a workaround to such a high quorum; unfortunately, since it was formed in 1995, there is no workaround, and the 50% quorum applies. This is unreasonably high, and the board should consider proposing an amendment to the Bylaws to lower the quorum to 10%, and that this quorum decreases by 50% at each adjourned meeting, so eventually a quorum is reached.
If the proposed change does not get approved, it is unlikely that we, the voting members, will ever be able to exercise any of the above items without resorting to a mail-in ballot, just as we are doing with the election. We estimate this election has cost the HOA approximately $2,000 in materials, postage and services, not including the invaluable volunteer hours to assist.
Please feel free to post any clarifying questions you may have. If you prefer, please direct message us or send an email to bod@lookoutriverwalk.com.