The concept of quorum is fundamental to the governance of Arizona’s community associations. Quorum serves as a threshold for the validity of both board of director and membership meetings and a community association’s decision-making processes. The legal framework governing quorum requirements for community associations is primarily outlined in the Arizona Revised Statutes, including A.R.S. 33-1249, 10-3722, and 10-3824, and their implications for the governance of and decision-making within community associations.
Quorum refers to the minimum number of directors or members that must be present at either a board of directors or membership meeting to conduct official community association business. Quorum requirements ensure that decisions are made with adequate representation and participation, thereby enhancing the legitimacy and acceptance of the outcomes. In the context of community associations, achieving a quorum is necessary in order for community associations to pass budgets, approve large scale capital improvement projects, amend governing documents, and elect board members, among other things.
With respect to condominium associations, A.R.S. 33-1249 establishes a quorum requirement for membership meetings unless the condominium association’s bylaws provide otherwise. If the bylaws do not provide otherwise, a quorum is present throughout any meeting of the condominium association’s members if persons entitled to cast at least twenty-five percent of the votes in the condominium association are present in person or by absentee ballot. A.R.S. 33-1249 further provides that if the bylaws do not specify a larger percentage, a quorum is present throughout any meeting of the condominium association’s board of directors if directors entitled to cast at least fifty percent of the votes on the board are present at the beginning of the meeting. This statute underscores the importance of the condominium association’s bylaws in setting specific quorum requirements, allowing for flexibility tailored to the needs of the community. For example, with membership meetings, the bylaws could provide for a lesser quorum, such as persons entitled to cast ten percent of the votes in the condominium association. If a condominium association struggles with achieving quorum for membership meetings, amending the bylaws to reduce quorum may be a good solution.
Planned community associations do not have a similar statute on quorum.
A.R.S. 10-3722 addresses quorum requirements for meetings of members in nonprofit corporations, which often include community associations. This statute establishes that unless the articles of incorporation or bylaws provide otherwise, a quorum consists of members holding one-tenth of the votes entitled to be cast. If a community association’s articles of incorporation or bylaws do not include a quorum requirement, one-tenth is the default.
A.R.S. 10-3824 relates to the quorum for board meetings of nonprofit corporations. It specifies that unless the articles of incorporation or bylaws provide otherwise, when a board of directors consists of a fixed number of directors, quorum is a majority of that fixed number. For example, if a community association board of directors must have nine directors at all times, five directors must be present at a board of directors meeting in order for the board to conduct business. When the board consists of a variable number of directors, quorum is a majority of the directors in office immediately before the meeting begins. For example, if a community association board of directors must have at least three, but not more than nine directors, and the board currently has five directors, three directors must be present at any board of directors meeting in order for the board to conduct business.
In addition, A.R.S. 10-3824 contemplates that a nonprofit corporation’s articles of incorporation or bylaws may allow for a quorum of the board of directors to be at least one-third of the required number of directors, and to provide that quorum exists throughout the entirety of a board of directors meeting despite the departure of one or more directors during the meeting. Lastly, this statute provides that if quorum is present when a board of directors votes on a particular matter of community association business, the affirmative vote of a majority of the directors present is an act of the board, unless the articles or incorporation or bylaws require a greater number.
With respect to A.R.S. 10-3722 and 10-3824, note that these only apply to those community associations incorporated as nonprofit corporations in the state of Arizona. If a community association is not incorporated as such, we defer to the bylaws and, perhaps, the other governing documents.
The statutory framework for quorum in Arizona community associations has significant implications for governance and decision-making. By establishing clear quorum requirements, these statutes help prevent minority rule and ensure that decisions are made with broad member or director participation. Associations must be diligent in adhering to these requirements to avoid challenges to the validity of their actions. Additionally, community associations should consider the specific needs of their communities when drafting or amending governing documents to set appropriate quorum thresholds. If your community association has questions about its quorum requirements, or is interested in changing its quorum requirements, the community association attorneys at CHDB Law, LLP are here to help.
The information contained in this article is not intended to be legal advice and is provided for educational purposes only.
