We can safely assume that no homeowners association (HOA) board, no matter how aligned or amiable, enjoys unanimous agreement from all board members on every decision they must make on behalf of their HOA. Inevitably, reasonable minds can disagree on various decisions, and such decisions are often made with the approving vote of most, but not all, of the board members. Occasionally, a board vote may even result in a tie.Boards often inquire as to the implications of a tie vote. While, as is often the case, that answer would depend on what their community’s specific governing documents do or do not say, this article will explain why it is generally the case that a tie vote among board members would be construed as no action being approved.
As we often note, the overwhelming majority of HOAs in South Carolina are nonprofit corporations. Therefore, this article applies to those South Carolina HOAs that are nonprofit corporations and therefore subject to the South Carolina Nonprofit Corporation Act (the “Act”).[1]
Pursuant to the Act, except as otherwise provided by a corporation’s governing documents, a quorum of a board of directors consists of a majority of the directors in office immediately before a meeting begins.[2] For example, under this provision, the quorum for a three-director board would be two directors. Therefore, it is easy to see how often a tie vote on a board action may present itself. The Act further provides that an “act of the board” is the “affirmative vote of a majority of directors present” when a quorum is present, unless the corporations’ governing documents require a greater vote.[3] Therefore, going back to our above three-director board as an example, if all three of them were present, two would need to vote in favor of approving an action for it to be the “act of the board” under the Act. If only two were present, however, both of those present would need to vote in favor of approving the action. As the Act requires an affirmative vote of a majority, the effect of a tie vote, unless the governing documents provide otherwise, would generally mean no board action.
As regular readers of our blog will recognize, this is where we provide the reminder that it is important to review the community’s specific governing documents to see if there are provisions which would apply to a tie vote and/or supersede the relevant provisions of the Act. Moreover, if an HOA board finds tie votes to be a common occurrence, they might consider reviewing their governing documents to see what would be required to actually change the number of directors on the board. For instance, it is generally preferable, although not required, to have an odd number of directors on the board. Also, if an action receives a tie vote from the board, and additional discussions fail to break the deadlock, then it may just be an opportunity for the board as a whole to reevaluate the situation and look for other options that might be satisfactory to a greater consensus.
This article is not intended to be an exhaustive discussion of applicable law regarding HOA board decisions, tie votes by HOA boards, or any guarantee of the outcome of any litigation regarding the same. Our attorneys at McCabe, Trotter & Beverly, P.C. are experienced and well-equipped to answer questions you may have regarding this topic. Please contact us at 803–724–5000 for further information.
Ashley Green
McCabe, Trotter & Beverly, P.C. blogs and other content are for educational and informational purposes only. This is not legal advice and does not create an attorney/client relationship between McCabe, Trotter & Beverly, P.C. and readers. Readers should consult an attorney to understand how this information relates to their personal situation and circumstances. You should not use McCabe, Trotter & Beverly, P.C. blogs or content as a substitute for legal advice from a licensed attorney.
[1] S.C. Code Ann. § 33-31-101 et seq.
[2] S.C. Code Ann. § 33-31-824(a).
[3] S.C. Code Ann. § 33-31-824(b) (emphasis added).