Lack of volunteers for BOD candidates

I am currently president of a HOA of single family homes in Michigan. We currently have 9 board members per our By Laws. Each boardmember's term of service is one year. Most of the boardmember have served 2-3 years. We have encountered many obstacles over the past year, including a law suit against the association by a member regarding his claim that we did not back him on an alleged deed restriction violation by his neighbor. The Lawsuit was declared a frivolous law suit by the court and was dismissed.
Eight of the nine boardmembers are not running for reelection, including myself. We have solicited for volunteers aggressively, without luck. What do we do at our annual meeting if no one runs except for the one boardmember? By the way, the one boardmember that is running again has not attended any board meetings or annual meetings since being on the board 2 years. There is no stipulation in our by-laws regarding attendance.

Shirley

Where would I find them?

We have a yearly budget of $2500/yr, that covers the cost of the annual meeting, office supplies and mowing the commons area. Membership in the association is not mandatory, so if the dues increase significantly, they will just not pay, right now the dues are $25/yr. We can't even get three people to run.

The by-laws do not address the possibility of no volunteers. I agree that a nine member board is excessive, the members or the board can amend the bylaws to lower the number of boardmembers, but as I recall the MI nonprofit corp. act requires at least 3 boardmembers.
Our dues cover the operating costs of the board, for example copies, postage, hall rental for annual mtg, refreshments, entrance sign maintenance, web-site, liability insurance, ink cartridges, envelopes etc.
Our board members meet about 4-5 times a year, and their duties are to handle complaints regarding the deed restrictions, maintain the web-site, organize the annual meeting etc. this year was unusual since the board had to spend many hours dealing with the frivolous law suit. We had to prepare documents and meet with the lawyer, insurance company and appear in court and mediation. No one wants to deal with it.
We have already sent a letter explaining that we need volunteers in order for the association to continue.

I plan to recommend the change in bylaws to reduce the number of boardmembers, but it still doesn't solve the problem of having only one volunteer.

Shirley,

I went through a similar situation recently - see this thread:

Subject: Seeking advice on how to handle this issue

Since most Associations are incorporated as nonprofits, I expect this to be the case with your association. As a corporation, the Association must also comply with Michigan NONPROFIT CORPORATION ACT. Per this act:

450.2505 Sec. 505 [emphasis added]:

(4) A director shall hold office for the term for which he or she is elected or appointed and until his or her successor is elected or appointed and qualified, or until his or her resignation or removal. A director may resign by written notice to the corporation. A resignation of a director is effective when it is received by the corporation or a later time if set forth in the notice of resignation.

Therefore, if the membership does not elect new Directors, you would continue to serve as a Director unless you resign. This would allow you and the other Directors, if so empowered, to appoint anyone to the Board who is qualified to fill the vacant seats (or take over yours).

Hope this helps,

Tim

I appreciate your suggestions, and I did read that section of the non profit corp. act. With what we have been through in the last year I am sure that the 8 board members, including me, will be resigning. You cannot force people to be on the board by appointing them.
I guess the only other option would be to dissolve the association. Our roads are county maintained, and garbage pick up is paid by each homeowner. The only things that will not get done are maintenance of the entrance ways, our web-site, liability insurance for the BOD, and any other projects that the BOD would suggest to spruce up the neighborhood. I have been reading the non profit corp. act and there are procedures that must be followed to dissolve the association. If there is only one BOD will they be able to do this? Has anyone out there ever been through this? If you could let me know how it went I would appreciate it.
Thanks!

Shirley

This is true.
That section of the law is intended to allow the remaining board members to appoint anyone who is willing to serve that meets any qualification requirement. Even if they don't live in the development.


Dissolving the Association doesn't dissolve any covenants or deed restrictions. It will just require each homeowner to enforce them through the courts (neighbor sueing neighbor).

Dissolving the Association doesn't dissolve any Association requirements for maintaining common area (entrance ways).

Dissolving the Association does require legal advice, which will cost money.

Dissolving an Association may or may not require consent of all mortgage holders (check the PUD (planned unit development) riders).


If there is not a quorum at the Board meeting, then business requiring a vote may not be done. With 9 board members I would expect that a quorum would be 5.

Even though there are procedures for dissolvement within the corporation act. These are the minimum requirements. Your Articles of Incorporation and/or Bylaws may have additional procedures that must be complied with.

Additionally, you need to check the CC&Rs to see if an Association is required. If it is, you may need to amend the CC&Rs first (goes back to requiring legal advice).


I have not been through this process. I did find the following links that may or may not be helpful:

Lawyer.com article titled Dissolution of Your Homeowners' Association

2011 Florida Article titled: Can a Florida HOA be dissolved?

Davis-Stirling.com Q&A titled: Dissolving an HOA

Shirley, I suspect that since membership in your Association is not mandatory, it's probably easier to dissolve it than a mandatory HOA as the other side of the coin would be, what happens if everyone resigned their membership and there were no members? That would be an interesting question to pose to your attorney.

Hope this helps,

Tim