BOD Elections / Proxy / Ballot

So my HOA has some major problems right now. Very few are happy with the current board and the way they are handling things. Problem is at the annual meeting we didn't have a quorum so the meeting did not happen hence no election for new board members. There were at least 4 that indicated they submitted interest in sitting on the board + 7 sitting members. Of the 7 only 3 hold officer positions. They had an "informal" meeting and when I asked if we would be having elections the board indicated they had re-elected themselves and already approved the 2014 proposed annual budget. Of course no one has seen the proposed budget. So you can see the issues are clear, the board is out of control. The current board has not read the bylaws, AIC, nor Indiana code. I believe they are correct that they can remain in their position as no election was had to elect a replacement, but they did/can not re-elect themselves. They just did not know how to speak to my question.

Immediately after this meeting I started requesting information in writing. After 27 days they continue to not respond. I have collected over the required 20% signatures to call a special meeting to hold an election and review and approve the budget. My concern is that they will not call the meeting to hold the election. If they don't and I call the meeting myself, how do I handle the election process? Do I form an election committee myself and create an election process per the bylaws? The board is supposed to do this and since I am not on the board I am concerned how this will work?

The current board also has avoided proxies at all cost as they know with no quorum they don't have to have elections and can just remain on the board until a quorum is reached. I am determined to make that happen, however I need to understand appropriate proxy procedures. I am also concerned that they have to be turned into an officer of the board before the meeting. If they board is no doing their job how can we expect that the proxies will be honored and not just tossed in the trash.

The board has essentially eliminated all communication with myself and anyone who indicated they would be signing the petition.

This board is acting illogically and against our own governing documents and Indiana Code.

I have requested the financial and have been ignored, so I have submitted a complaint to the Indiana Attorney General and I am currently waiting to see how they will proceed. My guess is the board is ignoring them as well :-) I will file suit if needed for breach of fiduciary responsibility.

I really just need some help figuring out how to handle the elections and proxies?

Thanks as always for any help!

I have read and re-read the Bylaws, AIC, Covenants, Indiana Code, Nonprofit Act of 1991, anything I can get a hold of. They tell me how to get the meeting called, but not how to hold the election or handle the election committee when the current board refuses to do there job. My guess is they are taking the ignore him and hope he goes away. This approach is silly and obviously won't work. I want to be prepared when I have to call the meeting and send out notices. I anticipate the old board challenging the validity of the new board once elected. Trying to make everything we do as solid as possible to withstand any challenges.

Thanks for your help.

Expecting that your Association is incorporated as a non-profit (most are, but check to be sure), in addition to any HOA/COA laws, the Indiana Nonprofit Corporation Act of 1991 would also need to be complied with.

Kevin, with this expectation, you are correct that the existing Directors may stay in their position if there was no election. That authority comes from IC 23-17-12-5 which says:

"(d) Despite the expiration of a director's term, the director continues to serve until:
(1) a successor is elected, designated, or appointed and qualifies;"

Since there was no election, all existing Directors would continue to serve unless they submit a resignation.


Per IC 23-17-11-6, applicable if your Association is incorporated as a non-profit, members are allowed to vote by proxy unless your Articles of Incorporation or Bylaws say that they can not use proxies or limit how proxies may be used.

Therefore, the use of proxies will depend on what your governing documents say.

Governing documents do allow proxies, but the board have not sent out proxy forms at anytime that I know of. At the meeting when they were brought up the board took the stance that they would have no way of knowing if they were forged. My guess is they don't want a quorum as they know they will not be re-elected.

320 Members
20% Required for a Quorum
7 Directors - all filled currently

Section 2.06. Quorum. At any meeting of the Members twenty percent (20%) of the
Members entitled to vote at such meeting, present in person or by proxy executed in writing, shall
constitute a quorum for the transaction of business, except as otherwise provided by law. In the
absence of a quorum, the Members present in person or by proxy, by a majority vote and without
notice, may adjourn the meeting from time to time until a quorum is present. At any such adjourned
meeting at which a quorum is present, any business may be transacted for which notice was
originally given. The Members present at a duly organized meeting may continue to do business
until adjournment notwithstanding the withdrawal of enough Members to leave less than a quorum.

Section 2.10. Proxies. A Member may vote either in person or by his duly authorized and
designated attorney-in-fact. Where voting is by proxy, the Member shall designate his attorney-infact
in writing, delivered to an officer of the Corporation prior to the commencement of the meeting.
No proxy shall be valid after eleven (11) months from the date of its execution unless a longer time
is expressly provided in the proxy.

Kevin,

This is what I understand from the posts:

1) Annual meeting was held.
2) There was no quorum at the annual meeting, therefore business could not be conducted.
3) Due to lack of elections, the existing board members stayed on (as authorized by law)
4) Any vacancies on the Board were filled by appointment of those remaining on the Board.
5) You gathered support and want to hold elections vs. allowing the individuals to stay in office.

If this understanding is correct, the proper way to do this is to hold a special meeting of the membership for the purpose of recalling and replacing the Board. The other option is to wait until next year and simply vote the bums out.

Again, based on this understanding, to do what you want to do you need to follow the process outlined in your governing documents and applicable State laws. Failure to comply with this process can result in the recall failing to happen due to technicalities.

Some examples of issues you need to pay attention to:

1. Wording on the petition. The membership has a right to call a special meeting for a specific purpose. Therefore, that is what the petition must say.

A petition that says: "We the undersigned desire to hold a meeting to elect Directors" may not be valid because the current Directors were properly seated therefore you need to first recall the Directors. A petition that says "we the undersigned desire to recall the Directors" may not be valid because the membership only has standing to call a meeting for a specific purpose.

Although it's from CA, this petition example's generalized info should be applicable. You will need to check your own governing documents and applicable laws to update percentages and references to specific statutes and your own governing documents.

Let me know if my understanding is correct or not.

I hope this helps,

Tim