Seeking HOA Attorney in MD

Our homeowners need an Attorney to review our documents.

Our BOD refuse to give us a letter from the attorney proving that they are in compliance with our documents, so our only option at this point is to do this on our own.

Our BOD is holding elections in 2 weeks and we need to do this prior to that date because this concerns our election terms. The BOD is not following our ByLaws or our Articles and they said that their Attorney told them it was legal for them to change the terms from the documents because an amendment changed the number of directors. But the amendment does NOT cover terms and only covers Article 4 Section 1, and the terms are Article 4 Section 2.

Any help would be appreciated!

I have attached the forms I sent to BOD and management company.

Unfortunately, I do not have a copy of the Amendment as it was not recorded until recently, but if you look at the higlighted section in the Articles of Incorporation on the first page it says:

"The affairs of the Association shall be managed by a Board of three (3) directors, who need not be Members of the Association. The number of Directors may be changed by an amendment of the By-Laws of the Association."

The amendment to Article IV, Section 1. of the By-Laws changes it to read:

"The affairs of this Association shall be managed by a board of five (5) directors (the "Board of Directors"), 2 of which who need not be members of the Association."

They (the BOD and Management/Attorney) are saying that by changing the number of directors, it automatically changed the number of directors elected to a 3 year term.

I strongly disagree!!!

Our Articles allow that change (and that change only) to the By-Laws without an amendment to the Articles in the Articles as you can see if the file I attached.

I will see what I can find....but I KNOW the terms are not covered in that amendment, and even if they were, it wouldn't be in effect without an amendment to the articles of incorporation, as they ONLY allowed a change to the NUMBER of directors by amendment to the By-Laws...not the terms.

The affairs of this Association shall be managed by a board of five (5) directors (the "Board of Directors"), 2 of which who need not be members of the Association.

Christina, you articles allow only for the change of number of directors by amending By-laws. BUT, they do not allow for changing qualifications, i.e. non-member to member. Let me get the amendment in a few.

Christina,

it is actually very simple. You have amended only Article IV Section 1. Number.

However, Section 2. Term of Office has not been amended and therefore remains the same. So, you cannot challenge it. Original By-laws used to say.

Section 1. Number. The affairs of this Association shall be managed by a board of three (3) Directors (the Board of Directors), who need not to be Members of the Association.

CORRECT amendment to the By-laws would be.

'Section 1. Number. The affairs of this Association shall be managed by a board of FIVE (5) Directors (the Board of Directors), who need not to be Members of the Association. '

Nothing more and nothing else because the Articles permit you to ONLY change the number of Directors

However the existing amendment not only changed the number of directors but also changed the qualifications (not permitted by the Articles). Consequently there is a conflict between the Articles and the By-laws. And the Articles prevail. You have to amend the Articles to make the change in Section 1. of the By-laws valid.

So, to make your case, I would not challenge Section 2. Terms of office, but I would challenge Section 1.

Hope, this makes sense to you. But, of course discusss it with an attorney.

PS: And if you would like to amend 'Section 2. Terms of office' you will of course have to amend the Articles and By-laws.

Myself and multiple neighbors don't want them electing the TWO new directors to a 3 year term...ONE is all our documents call for.

You are correct. I thought you were challenging the amendment.

The Articles do prevail...it says so right in our Articles and our ByLaws.

BUT...the one exception is that in the Articles, it gives permission for that one amendment.

I am just concerned with the terms.

We don't get any turnout at our meetings, and NO ONE wants to be on the board. One 3 year term allows the Members to voice their opinion when they actually do show up. Our current board will more than likely be re-elected as a whole, since no one else will volunteer. This board has done nothing in over 7 months...including filling the seat of vacant Board Members, they never even sent out a notice that he resigned asking for volunteers to fill his seat. We don't want 2 of them getting re-elected for 3 more years. At least with only 1 of them being re-elected to 3 years, we can choose the lesser of 2 evils!

We are looking for one ourselves - we are near Ocean City, MD. Just a review of a Resolution to allow fines for violations (discussed in an earlier forum discussion), as opposed to amending the bylaws. Somebody here was kind enough to point us in the right direction, but before we put this resolution into place, we'd like a review by a competent lawyer - we want to assure ourselves this will 'pass muster' if fines turn to nonpayment turns to a lien, etc., etc.

Also was thinking of turning to justanswer.com. Haven't tried them yet, and feel pretty sure that even if their answers may be right, we may still need confirmation.

Anybody try them before?

PS: Sorry it is none of my business if you voted for the amendment or not.

PS: Sorry it is none of my business if you voted for the amendment or not.

Christina:

I agree that your HOA has a problem.

Both the Articles of Incorporation and the Bylaws originally established a 3-person board, each serving a staggered 3-year term. At each annual election (after the first annual meeting), the members could vote for just one director. The Amended Bylaws changed the board to five members but left intact the provision for voting for just three board members with staggered 3-year terms. This creates an ambiguity in the Bylaws.

If your HOA's attorney gave his stamp of approval to this mess you need a new attorney.

Your association needs to amend Article IV Section 2 of the Bylaws to reflect the fact that you now have five directors and to state terms and how and when directors will be elected.

When I first read your post I was of the opinion that there was also a conflict between the Amended Bylaws and the Articles of Incorporation. However, the Articles of Incorporation state explicitly that "The number of Directors may be changed by amendment to the By-Laws of the Association." Due to this explicit wording I see no conflict between the Amended Bylaws and the original Articles of Incorporation.

Due to this explicit wording I see no conflict between the Amended Bylaws and the original Articles of Incorporation. (Larry)

Larry,

Please read again, The Articles state, the Association can be managed by three directors who do NOT be to be the members of the Associations. Furthermore, they state that the number of Directors can be changed by amending the By-laws.

However, the Amendment to the By-laws changes much more than a number of directors.

It says that at least three directors must be members of the community. Furthermore, it states that two directors must be residents of the community. Where did those restrictions come from? Thin air, I assume. The Articles did not authorize changing the qualification of directors. Clearly, the By-laws amendment is in conflict with the Articles. I bet you a key-lime pie.

I hadn't read the amendment fully as I understood the issue was the terms and not the number of Directors.

Based on the Corporate law, the terms the Board is proposing is not an issue.

P,

To break it down:

Is there a conflict for the qualifications - yes
Is there a conflict on the numbers of Directors - no
Is there a conflict or issue on the Board wanting the three year terms for the 2 additional directors - no (per Corporate law cited earlier).

The original concern in this thread was "The BOD is not following our ByLaws or our Articles and they said that their Attorney told them it was legal for them to change the terms from the documents because an amendment changed the number of directors."

Since the Original Poster is only concerned about the new Directors being voted to a 3 yr term, I tried to address that concern rather then get into other areas. In my opinion, Based on the States Corporate law - the concern over the length of terms is unfounded and the Board is correct about having 3 year terms for the new Directors.

As you pointed out, based on the language in the amendment, there is an additional issue that the OP didn't care about or was unaware of. The conflict about the qualifications for Directors. However, this is conflict is already addressed by the Bylaws which defers to the Articles of Incorporation for when there is a conflict. The conflict you discovered doesn't throw out the whole amendment, just the section about qualifications for the Directors.

Are you saying that if part of the Bylaws are in conflict with the CC&Rs, then the entire set of Bylaws should be tossed?

As usual, it appears we will just have to agree to disagree.

Petunka,

Yep you caught me. I inadvertently used CC&Rs instead of the Articles of Incorporation. I guess that throws my whole question out. I'll do my best not to repeat the mistake.

I don't know how else to explain it.

I see the amendment addressing two items (# of Directors and qualifications).

I base my logic on the ability of Courts to say a part of a law is invalid while keeping the rest of the law valid. I'll also admit that a different court might say because a part of the law is invalid the whole law is invalid. The best example of this currently in the news is the Health Care law going to the Supreme Court.

Both points of view can be valid.

Since you appear to see the whole document as one item (the amendment) and I see it as addressing two items and I believe both points of view could be valid, the best you and I can do is agree to disagree.

I don't think I'm going to change your point of view on this and I'm fairly positive that you are not going to change mine. Therefore, the best we can do is acknowledge each others point of view and agree to disagree.

I do think we can agree that the amendment could have been better written. Again, the original poster wasn't even concerned that the amendment was invalid or not. They were concerned about the term limits for the new Directors (which are not addressed in the amendment).

Tim

My agenda is to make sure our Board of Directors is following the documents and not making up thier own rules, such as electing 2 directors for 3 year terms, when our documents only allow 1 director for a 3 year term. I don't see this as a bad thing, just watching our BOD so they don't just run amuck like they have in the past few years.

And just so you know...I did not vote for the amendment...the amendment was approved prior to the purchase of my home.

Larry,

I completely agree with your entire post. The only problem with amending the bylaws for the terms, is then there would be a conflict with the Articles as the terms are defined in the Articles. As a board, in 2009, we decided it would be a waste of resources to try and get 75% of our members to vote on changing the length of the terms in the Articles. An amendment to the By-Laws is simple...an amendment to the Articles isn't worth it if the terms are already staggered. Our philosophy back in 2009 was "if it ain't broke, don't waste time trying to fix it."

You've made that point clear in your earlier posts

No, we haven't change any of the original directors terms.

Every year we still elect only 1 director for a 3 year term...as stated in our by-laws and Articles. But since we do elect 3 new board members, the other 2 received 1 year terms by default. We have to elect them, because we must have a 5 member board, but we can only elect 1 director to 3 years, which staggers down. It has worked well since 2003, when the amendment was approved.

Our biggest problem with changing the terms to match a 5 member BOD is that our BOD has removed the right to vote from about 30% of our Members as they are delinquent. Our Articles do not state that the vote must be 75% of Members in good standing, it says 75% of the entire membership. Our previous Attorney warned us that removing their right to vote could come back to hurt us...well...here it is. We can always reinstate, but more than 15% of our owners are in forecloser or are owned by banks, so getting them to respond to anything is useless.

Besides the fact that our annual meeting had to be reschedule due to a lack of quorom...we have 102 units and the quorom for the annual meeting is 10%. So we had less than 10% in attendance by person or proxy...how would we ever get 75% for an amendment?!?!

Except that Officers do not have a voting position on the Board.

Except that Officers do not have a voting position on the Board. (Tim)

Tim,

Somehow I think I know that. There are not too many choices in these situations:

1. Live with the attorneys ssociation opinion and do not be upset about three year terms for two directors
2. Challenge the attorney (lost case and waste of money in my opinion)
3. Revert to the original By-laws OR amend the documents correctly

Michael,

I'm confused also. Therefore, I went back and reread what was provided.

The Articles of Incorporation says [emphasis added]:

"At the first annual meeting the members shall elect 1 Director for a term of 1 year, 1 Director for a term of 2 years and 1 Director for a term of 3 years.and at each annual meeting thereafter the membership shall elect a Director for the Term of 3 years."

The date on the Articles is 1991. The Date on the amendment is 2003.

Therefore, per the articles

Dir A - 1 year term initially first election then 3 year term all other elections
Dir B - 2 year term initially then 3 year term
Dir C - 3 year term
Per the amendment Dir D & E were added but there was no mention of term. The logical expectation (based on the Articles of Incorporation) would be that all directors were to serve three year terms. Hence you get the following chart:

Dir - Years Seat is up for Election

A - 91,92,95,98,2001,04,07,10,13,16
B - 91,93,96,99,2002,05,08,11,14,17
C - 91,94,97,2000,03,06,09,12,15,18
D - 2003,06,09
E - 2003,06,09

Christina,

I have not seen anywhere in the documents you provided that established the term for Directors D & E. Based on the Articles of Incorporation, I do believe that the term for all Directors should have been 3 years. If the Association have previously been electing Directors D & E to one year terms and the Board now wants them to be 3 year terms, I believe that the 3 year term would be in compliance with the Articles you provided and that the past practice was not in compliance with the Articles.

However, with that said, since your Association has been electing Directors D & E for 1 year terms, an argument could certainly be made that this is what was intended in the amendment that increased the number of Directors. Because your documentation is ambiguous, I could see a judge ruling either way. You may want to check the minutes from that meeting and see if term length is mentioned, as that could be the deciding factor for a judge.

It's probably best to have the membership vote on the term length for Directors D & E and move forward from there. Perhaps you can solicit proxies from your neighbors so you will have enough voting power to be the deciding vote. It's also possible that the term length for Directors D & E could be a bylaw amendment but you should check with a local attorney on that.

Tim