What is a quorum?
We don’t do much Latin these days in law. Plain English is all the rage (as it should be), but without a single doubt the most frequently used word is ‘quorum.’
In strataland, a quorum is the minimum number of voters who must be present at any general meeting (be that the annual one or an extraordinary one) to have a valid meeting.
Simply put, if you don’t have a quorum you don’t have a meeting.
If a quorum for a meeting is not present within 30 minutes of the proposed starting time, the meeting must be adjourned to be held at the same place, on the same day and at the same time, in the next week.
If at the adjourned meeting a quorum is not present after 30 minutes, the people who are there (whether personally or otherwise) are deemed to form a quorum. So an adjourned meeting can have every resolution decided by a single vote if only one person chooses to participate.
This covers the apathy that reigns supreme in most bodies corporate. If no one shows up, that is a different story for another day.
But back to that initial meeting. There are two requirements for a quorum:
- the required minimum number of voters being physically present at the meeting; and
- votes from at least 25% of voters.
Who is a voter?
The first step is to determine how many voters there are in the scheme and the key thing here is remembering that the number of voters is not necessarily the same as the number of owners.
Unfinancial owners are counted as a voter for the purposes of this question. All you are asking at the moment is how many voters there are – not whether they can vote.
On top of that, if a lot is owned by a company there must be an individual noted as the company’s representative in some way for the company to count as a voter. That can be by way of corporate nominee, proxy or power of attorney. If the company has not appointed anyone, they are not a voter for the purposes of this question.
The hypothetical scheme we will use for illustration purposes has 100 lots. We are lawyers because we are not good at maths so dividing things into 100 makes it easier for our non-linear brains.
- If there are 100 different individuals all owning lots in a scheme, there are 100 voters. Simple.
- If one entity owned fifteen lots, and the rest are individually owned there are only 86 voters – the 85 individual lot owners and the single multiple lot owner.
- If 15 of those owners appointed someone to represent them all, then we are down to only 72 voters – 70 individual lot owners, the multiple lot owner and the representative of the other 15 lots.
- If there were ten lots owned by companies who had not appointed a representative in a required form, we are down to just 62 voters.
Minimum number of owners in physical attendance
The next issue is that you need at least two voters physically present at the meeting (unless there are only two voters or fewer in the whole scheme – in which case one is a quorum). Other than that, how many voters there are at the moment is academic. You just need two of them to show up.
This is where unfinancial owners do not count. They are not a voter for the purposes of determining whether two people are present. If one of the only two people present was unfinancial, the first limb of physical attendance has not been met and you are adjourning the meeting no matter what.
Do you have votes from 25% of voters?
We then get to the final question. For a quorum to exist there must be votes from at least 25% of the voters.
Since voters cannot be cut in half, for the purpose of the 25% you must round up to the nearest whole number.
So, using our prior examples, the required percentage of voters would be
- 100 voters – 25
- 86 voters – 22 (rounded up from 21.5)
- 72 voters – 18
- 62 voters – 16 (rounded up from 15.5)
Unfinancial owners still do not count. They are not present for the purposes of determining whether 25% of voters are present.
Using our first 100 lot example above again, if we had two people present in person along with 25 voting papers from individual lot owners, but four of those voting in that way were unfinancial, then we only have 21 voters there – meaning we do not have a quorum.
If you do get past the two tests for a quorum (physical attendance and 25% of voters), then unfinancial owners can vote, but only on motions requiring a resolution without dissent or for the committee.
That can become very complex, so let us know if you ever need help deciphering this any further.