No Quorum, No Budget!

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J.M. from New Haven County writes:

Dear Mister Condo,

We have a board made up of condo owners. The board presented a budget for ratification. The budget was not feasible as they would not develop a realistic budget to meet annual expenses because, as homeowners, they did not want to increase their dues. However, and sadly, only two owners attended the meeting and refused, after a long debate, to ratify the budget. The board, however, said they outvoted us as they were three votes out of five.  Can a board, even one composed of homeowners ratify their own budget?

Mister Condo replies:

J.M., budgets are the single most hotly debated topics amongst condo owners at their annual meetings. It’s really one of two things that must happen at the annual meeting. Elections of Directors must be held and the budget must be presented and voted upon. To make sure everyone is represented, most association by-laws require a quorum of eligible voters to participate, either in person or by proxy. 3 votes to 2 only equal 5 votes. Since you live in a 25 to 50 unit condo, I have to assume that a quorum was not achieved. In that situation, a unit owner could protest the entire meeting – elections, budgets, and any other business that was conducted as a quorum was not achieved. How sad that so few unit owners attended such an important meeting.

The reality is the situation you are describing underlies a far greater problem for your condo, in my opinion. If less than 10% of unit owners care to attend your annual meeting, what does that say about the future of your community association? You can only challenge the Board if you are prepared to replace them. Otherwise, he who shows up makes the rules. Democracy only works if the people perform their duty. In this case, one day out of the year owners are asked to either attend or submit a proxy to exercise their right to vote. If they don’t do either, they really have no basis to complain about the decisions that are being made on their behalf. My advice to you is to rally your neighbors and let your voice be heard. Run for office at the next election and muster the troops to action. And if apathy continues to run rampant, consider getting out of that community. An association that does not exercise proper stewardship in the form of a practical budget that takes into account future expenses is heading for financial disaster. Best wishes.

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