Voting for an Increase in Gunbarrel Green HOA Dues

The Gunbarrel Green HOA can’t seem to arrive at a straight answer about what vote is required to raise the annual dues. For example, there’s this from the 2016 Annual Meeting

Motion to increase dues to $100/yr – Reese Killeen
Seconded by Joe DiRago
Motion Passed
Discussion:
Al Coelho – formally protested the vote. Does not believe a vote to increase the dues follows the Articles of Incorporation.

There’s no indication of whether the vote was a simple majority or 60%, and I don’t remember the details, so I guess from the minutes we can assume it was a majority of those voting.

At the 2017 meeting, the subject came up again. From the draft minutes:

Jonathan Mills also provided a statement on the Dues were raised at last year’s annual meeting based on Article V, Section 2 that states “Such dues or assessments may be set by the Board of Directors at the annual meeting of the members of this Association or at any other meeting, provided notice as above-defined has been given to Association members.” He acknowledged there is ambiguity in the bylaws about how dues can be modified and that this is also an area that the Board would like to clarify in the future.

Mills is referring to the Bylaws, not the Articles of Incorporation. What’s strange about Mills’s statement is that at the 2016 meeting the increase was not set by the Board, but by a vote of the members. I suppose one might say that the vote was merely an informal approval of the Board’s action, and that the Board “set” the dues implicitly by taking a vote. As we shall see, this confusion is interesting but irrelevant.

We also have  Article IV of the Bylaws, which conflicts with Article V:

The Board of Directors of the Association shall have the power to set dues and special assessments.  The dues shall initially be $25.00 per year; approval of sixty percent (60%) of the membership shall be required to change the dues or levy an assessment.

So, there’s no question that the Bylaws are ambiguous about what vote is needed to change the dues. My interpretation is that the Board makes a proposal (“set”), but 60% of the membership is required to for “approval” of the Board’s proposal. But I understand if someone wants to argue that the Bylaws are unclear. Nowhere in the Bylaws does it say that the dues can be increased by a vote at the Annual Meeting. It’s either the Board alone or 60% of the membership.

The Articles of Incorporation also has something to say about the dues, first in Article III, “Purpose and Powers of the Association.” Paragraph C reads:

fix, levy, collect and enforce payment by any lawful means dues and assessments as approved by the majority of the members; pay all expenses incident to the conduct of the business of the association, including all licenses, taxes or governmental charges levied or imposed against the association

Which seems to suggest that a majority of members can “fix” dues, although this is a general statement about the purpose and powers of the association, not specific details about voting. Nonetheless, the language is there.

Much more explicit is Article X of the Articles of Incorporation, “Prior Approvals:”

The following actions will require the prior written approval of sixty percent (60%) of members:

E. approve of increased dues or levy assessment.

So, according to the Articles of Incorporation, maybe changing the dues takes a majority vote of the members, or maybe 60%, but I think it’s pretty clear that the latter is the intent.

As I said, the Bylaws are a lot less clear than are the Articles of Incorporation, and there’s a conflict between those two documents. However, this possibility is addressed by the Bylaws, in Article XIV, Section 2:

In the case of any conflict between the Articles of Incorporation and these Bylaws, the Articles shall control

Therefore, we can completely ignore what the Bylaws say or don’t say about voting for changes in the dues, and go with the Articles of Incorporation alone.  I think it’s 60% of the members, but even if one thinks its only a majority, there’s no way to interpret the Articles of Incorporation as saying that the Board can change the dues on its own or that it can be done at an Annual Meeting, unless the number of voters in favor is also a majority of the members. The website claims 315 members, so a majority would be 158, and there definitely weren’t that many voters present at the 2016 meeting. The super majority, 60%, would be 189. There were maybe 50 or 60 people in the room, and many of those were couples with only one vote between them.

In short, the 2016 vote was invalid, and HOA dues were in fact not raised to $100. It’s likely that the vote some years ago to raise them to $60 was also invalid, but maybe one could argue that too much time has passed to argue about that. What the HOA Board should do immediately is invalidate the 2016 vote, put the dues back at $60, and refund any overpayments.

 

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