What is a Quorum and Why is it Important?

Poeple meetingWe are in the thick of annual meeting season and one of the first things that is done before every meeting begins is for the community association to assure that a quorum has been established. A quorum is defined as the minimum number of owners who must be at a meeting before business can be transacted. Oftentimes, quorum is outlined in the association’s bylaws but in some instances, it may be set by statute. It is common for an association to have a tough time reaching quorum.

Meetings that don’t have a quorum often must be adjourned and rescheduled at a later date. This costs the association money and creates more work. Additionally, achieving a quorum at a second meeting—if we couldn’t get one the first time—is often even harder.

So, why bother to try again when a quorum isn’t reached? Because the board of directors is legally obligated to conduct an annual meeting. It’s an important part of conducting association business. During the annual meeting, new board members are elected, and the coming year’s budget is often presented to the homeowners for review (if a separate budget ratification meeting has not occurred). It should be noted that many North Carolina community associations can still ratify a budget even when a quorum is not present as outlined in NCGS § 47F-3-103(c) for communities created on or after January 1, 1999. However, no quorum—no board election. If no board election occurs, the current directors will have to continue serving until an election can be conducted.

Good news: You can be “at” a meeting and across the country at the same time by signing a proxy! That’s how you assign your vote, in writing, to another person. Proxies count toward the quorum, so it’s important you submit your proxy to the association. Typically, there are five types of proxies used for community associations:
• General proxy: The holder of the proxy has the discretion to do whatever he or she wishes at the meeting.
• Limited proxy: The holder of the proxy can only vote on certain issues at the meeting.
• Directed proxy: The holder of the proxy can only vote as directed.
• Limited directed proxy: The holder of the proxy can only vote on certain issues as directed.
• Quorum proxy: The proxy only counts for purposes of obtaining a quorum and nothing else.

Sample proxies are available on request by reaching out to a Priestley Management Company team member or emailing your request to info@priestleymanagement.com.

Because proxies are so important to achieve a quorum, associations should work diligently prior to the meeting to get as many proxies as possible. They should encourage homeowners to return a proxy even if they plan to attend the annual meeting. This allows the association to have their proxy in the event the homeowner has a last-minute change of plans.