Voting on amending governing documents

Well, Tuesday will be the day folks will go vote in person for President of the United States. That is for those who did not already vote by absentee ballot.  When the votes are counted anybody who did not vote is not counted at all in determining who will win and be our next President.

However, this is not usually the case if you’re Condominium or Homeowners’ Association has old developer drafted documents that have never been updated.  Most of these old governing documents provide that they can be amended with the approval of either 2/3rds or 75 percent approval of all the members.

This means that if an owner does not return a proxy vote to be counted, their vote will always be counted as a NO vote.  As a result many good amendments that have been well thought out by the Board of Directors will never pass just because of the inherent apathy of many owners when it comes to proxy voting.  When you ask those who did not vote how they would have voted had they done so, the vast majority would have voted to approve the proxy questions!  But because they did not vote, they are counted as a NO vote.

You cannot really blame these owners for such apathy because many believe their vote really does not matter and being busy people they may not want to take the time to read everything and figure out how to cast their proxy vote.  Many who own a lot of stocks receive such proxy solicitations from the companies they own stock in all the time and unless they owner a great percentage of the stock in the company, their vote probably really does not matter so they throw the stock voting package in the circular file.

Unless this apathy condition is broken, when it comes to voting to amend the Association’s governing documents, the Community can get stuck in the stone-age with old documents that no longer reflect current law or current practices in the industry.  This can really hamper the ability of the Community to properly conduct business and legally keep up with the times.

We find it beneficial for many Associations to go get a vote of its members just to bring down the too high voting requirement in their governing documents to a reasonable level so that in the future good amendments can get passed or the governing documents (Declaration of Covenants, Articles of Incorporation and Bylaws) can be rewritten to be up to date with the law and conform with standard modern practices.

  Typically we suggest the voting requirements for amendment should be changed from either 2/3rds or 75 percent of all the members to 2/3rds or 75 percent of “those who actually vote”.  You will still need at least a quorum of the members to send in their proxy vote to have a legal meeting to count the votes. We find that when a proxy voting package is sent out, you get between and 65 to 75 percent of the owners voting.  So, you will then need 2/3rds or 75 percent of somewhere between 65 and 75 percent of the owners. This is a manageable number to get and is still a super majority of the members voting wanting a change.

In order to get the first amendment to bring the vote down, you will probably need to have a get out the vote committee to knock on doors, call neighbors and send e-mails a few days before the meeting to count the votes to make sure you get the initial 2/3rds or 75 percent.

You can open the proxies as they come in to keep a running tally of the vote and then a few days before the meeting you can see how many owners you need to contact to get to the magic approval number.  Owners can e-mail or fax in a signed copy of their proxy which is as good as an original and can be counted.