Annual meeting to vote on Board of Directors

I’ll try not to make a book of this. The letter announcing the annual meeting this year the Board wrote only 2 people have said they would be on the roster and 2 will be voted on. According to our By-Laws, this year there should be 3 Directors on the roster as last year only 2 were voted on. I emailed the Pres. and Sect and explained they were in error. He responded “As per the Covenants the position of "Member at Large" is an appointed position. I know that in the past we have voted for this position but simply because that was done in error in the past does not mean we should continue to do so.” My response back was “Thank you for the quick response, because this is an urgent matter. I ask you where in the Covenants does it state that the Member at Large is an appointed position? In the By-Laws under Article V, Board of Directors Section 1. After the Applicable Date (this is when Developer turned the Assn over to the homeowners 08/04), the affairs of the Association shall be governed by a Board of Directors composed of five (5) persons. You and I were 2 of the first 5. If you will recall when the original Board was elected in 08/04 there were 5 people voted on. The new Board didn't know what name to use for the 5th Board member so the Board decided on the name "Member at Large". It was not an appointed position. This is to have an odd Board member in case there are any ties when the Board has to vote on HOA business. Voting for the 5th member in the past 9 years was not in error. As a suggestion you should also read Section 4: Term of Office Generally. This explains the term of Directors. The original Directors, when turned over to the Assn, (3) were elected for 2 years and (2) for 1 year. After these terms were up each director elected thereafter were elected for a 2 year term.

My question is if the Board does not correct there letter and proxy how could a person at the meeting stop the election until it complies with the By-Laws?

Nancy

I am not nor do I play a lawyer.

Based on what you said, my suggestion is to stick to the simple fact that the Bylaws say you shall have a 5 person BOD. Forget names, past methods, etc. The attempt should be to get 5 on the BOD.

It is common for not enough people to run for election so the BOD comes up short. Check your Bylaws how to fill this vacant position. Usually the BOD alone can do so.

John - Thank you for your suggestion. I checked the Bylaws under Vacancies, it appears twice. Under term of office generally it says: Until the Applicable Date any vacancy in the Board of Diretors shall be filled by the Declarant. Thereafter, any vacancy in the Board of Directors shall be filled by vote of the majority of remaining Diretors, even though they may constitute less than a quorum. Each person so elected shall be a director for the unexpired term of his predecessor or until his successor is elected. The other appears under Officers and their duties: A vacancy in any office may be filled by appointment by the Board of Directors. The officer appointed to such vacancy shall serve for the remainder of the term of the officer he replaces. The member at large (I'm not sure when it was done)was appointed by the Board when one Director went to a better place. My position is he should also be voted on this year. This is the Director spot that should be on the Ballot, unless, he decided not to run. This was not in the letter. The letter said 2 BODs positions will be open and elections will be held to fill these two positions. Nominations received to-date include incumbents (the Pres. and the Treasurer). Additional nominations will be accepted as well as nominations taken from the floor. So if 2 incumbents were elected last year, then there should be 3 elected this year. I'm just hoping our Pres. will correct this before the meeting. Again thanks for your suggestions.

John thank you, I will stick to the simple facts as you suggest if comes to me bringing it up at the meeting. I'm not sure what's going on with the 3rd Director. There has been nothing in the minutes that he is leaving the Board or has left. There isn't a vacant positon as far as I know. I sent you what the By-Laws say in prior reply.

NpS - I appreciate your reply. I wish I could send you all the emails between me and the Pres. I don't know how to do attachments to this. I have copied the last email from the Pres and my response. Now I will wait and see if he responds if not a letter will be sent to the homeowners advisisng them of this situation. I will use your last 2 sentences. I have removed names from these emails.

----- Original Message ----- Pres response to my previous email
From: Pres of Board of Directors
To: Me
Cc: Other Officers
Sent: Thursday, July 03, 2014 11:32 AM
Subject: Re: Letter re Aug 2, 2014 annual meeting

I refer to Article VI, Section 1:Enumeration of Officers. President, Vice President, Secretary and Treasurer.

Then Section 4 that states the Board may elect such other officers as the affairs of the Association requires. I agree we need a fifth person and that person we have, indeed, named "member-at-large." That person the Board elects.

Regards,

My response to his email:

The Article VI is for - OFFICERS AND THEIR DUTIES. (not Directors)

To sum it up Officers can not elect Directors to the Board. The five Directors were elected by the Members of the Association to create the Board, the five Directors elect the five Officers to be President, Vice-President, Secretary, Treasurer and Member-At-Large.

Article IV and V explain how Directors are nominated and elected. ................ should be nominated like the two in the annual letter so he can be elected by the Members of the Association.

After the Board studies these articles, will they issue a correction to their letter and add ............. so he can be elected by the Members of the Association? The meeting could be postponed until this is resolved.

Thank you for responding.

Nancy, it seems there is confusion between officers an directors. A "member at large," is not an officer; s/he is simply a director. That person is elected by the membership, not by the Board (unless a vacancy occurs, blah, blah).

Do your bylaws have description of officer duties?? If so, it probably spells out tasks for the prez, VP, tres. & sec's. Directors powers & duties also probably are specified somewhere and your director at large and all officers who are directors abide by those.

I know yore trying t make the president understand your bylaws, but, your statement to him that "... five Directors elect the five Officers to be President, Vice-President, Secretary, Treasurer and Member-At-Large, muddies the waters. Th board should not elect the "director at large"; only the owners do.

We are board of 7 and there are 4 officers and 3 "directors," plain & simple.

We actually created a new officer position and called it Maintenance. This provides an Officer position for the fifth Director and helps split up the work load.

The Maintenance Officer takes care of:

Overseeing all contracts
Deals with resident issues concerning common area maintenance items (tree pruning is the big one).

John - DUH! Congratulations you finally got through this thick skull. Now I understand about the 5th Director. How simple it is now. Your explanation is great. Thank you.

So to pull it all together for you a bit:

Your Organizing Documents (Declaration and/or Bylaws) should require a minimum and/or maximum number of Board members. These numbers are always odd, because the Board always needs to be able to break a tie vote.

All Board members (usually called Directors but sometimes Trustees) are elected by the Association Members.

After an election, the newly formed Board decides who its Officers will be - usually President, VP, Treasurer, & Secretary - whose duties are typically spelled out in your Organizing Docs and/or your State Statute. Other Board member responsibilities, like Member at Large (or any other designation that the Board chooses) may be assigned at the Board's discretion.

A major distinction between the 4 primary Officers (Pres, VP, Treas & Sec) and the other Board members is that most third parties (like banks, contractors, insurance companies, etc) will require specific Officer signatures before certain documents can become valid. These requirements are either because you are a non-profit corporation or due to industry practices. Rarely are all Board member signatures required.

When it comes to a vote of the Board, every Board member's vote is equal. Usually a majority is sufficient, but for special circumstances, a super-majority (a specific proportion like 2/3) is required. These special circumstances will be spelled out in your Organizing Docs and/or your State Statutes.

In most Associations, Board members serve for more than 1 year (most often 2 years) and those terms are usually staggered so that the entire Board does not change in any one year. After every election of new or re-elected Board members, the newly formed Board gets to rearrange its composition by changing who will sit in which Officer position. How this is done is not usually spelled out in any documents. In my opinion, every Officer position should be subject to change every year after elections, but some Associations follow different traditions.

When a Board member can no longer serve (due to death, illness, resignation, removal, or any other reason), a Vacancy is created. Organizing Docs and/or State Statutes almost always give the remaining members of the Board the authority to fill the Vacancy without a vote of the Association members. The Organizing Docs often state that the Board-appointed Director sits for the balance of the term of the Director who left the Board. Some Associations require that the term of the Director who left the Board automatically ends at the next election. Often, the "balance of the term" language was adopted at a time when Directors served for only a single year and before the Association introduced multi-year staggered terms. Some Associations have updated their docs in this area. Others haven't.

Officer vacancies are filled the same way that Board vacancies are filled. The key difference is that the Officer positions don't ordinarily get voted on by the Association membership.

In your particular case, your Pres is violating many of the principles stated above, all of which were put in place to ensure that your Association runs by democratic process. The tie-breaking vote of the Board is given to someone who wasn't even elected and doesn't ever have to be elected. The Member-At-Large position (which probably has no specific responsibilities) gives the Board-appointed Director a free ride. He or she never has specific responsibilities but is the final decision maker on every 2-2 split of the elected Directors. If the Association members vote to remove the Board-appointed Director, the Board can simply appoint someone else and undermine the will of the Association members. Your Pres obviously hasn't thought through the ramifications of what he is trying to impose. I wouldn't put up with it.

No we did not change the Bylaws as our governing documents, and State statutes, require the normal Officers but allows the Board to create other officer positions as needed.

Of course, I don't know why I even asked this question. I just have a feeling the Board will not do anything about getting the 3rd Director on to vote for him. Just have to wait and see. Thanks again.

Kerry you are correct. The Board says only 2 Directors positions open when it should be 3. That's what I' trying to do is to get them to change the 2 to 3 Directors. In the past 2 years 1 Director did resign and the Board replaced him. The 1 died and the person that resigned came back on the Board. One of these should be on the ballot this year, I just don't have the dates and when all this occured. I'm waiting to hear back from the Board. Thanks for responding.

I agree with everything you have written and thank you.

The problem with the Nomination from the Floor idea is that it doesn't correct the defective notice - Because the 3rd Board seat wasn't pre-announced to the community, there is no basis for taking a vote or any other action on that 3rd seat. That's why I recommended a continuance - So that proper notice could be made.

That being said, flawed elections happen all the time in HOAs. So maybe you want to give a Nomination from the Floor a shot. Just know what you're up against. If rules of order are applied, you may not be allowed to make the Nomination.

Hey Folks - "Hey everybody I just received this from our President "I understand your concerns and appreciate your position. I will get the Board together and discuss this and make a determination. I certainly have no desire to operate against our Covenant when there seems to be simply a mis-understanding. Again thank you for your input". Looks promising.

John - I checked our By-Laws and it has nothing about electing someone from the floor. It could be in Robert's Rules but I'm not sure. I think the Board can come up with something. I was very happy to receive the Pres. email and will let everybody know the outcome. Again, I thank everyone for educating me. I know you are not lawyers, but, you sure know how HOA's operate.

Nancy

Kerry raised an interesting point. If your BOD Meetings are open to members, as I believe they should be and most are, then I advise you to attend.

Do understand in many cases you cannot speak unless you are asked to speak but be prepared if asked.

Also if they have an open comment, Q/A session let it be known you raised the issue as you felt it might have been misunderstood and you know they want to do what is best/right. Do not accuse them. Seduce them.

Nancy, I would go further up the food chain so to speak and look at the Covenants or Articles of Incorporation, somewhere in there should be language to the effect that the HOA will be governed by a Board of X elected from the eligible homeowners. The Covenants set the what, the by-laws just define how to get there, election rules, qualifications, duties etc.

I have no new ideas and stand by my earlier suggestions and others had good advice. You're back at square one with the prez refusing to seek three candidates and thinking or pretending to think that detector at large is an "officer."

NpS From our By-Laws: Article V Sect 1 Until the Applicable Date, the affairs of the Assn shall be governed by the Initial Board of Directors and shall consist of not fewer than three (3) members nor more than five (5) members. After the applicable date the affairs of the Assn shall be governed by a Board of Directors composed of five (5) Persons.

The Pres statement is not true he got his info in Article V Sect 3 - Initial Board of Directors. The Initial BOD (the Initial Board) shall maintain, manage and administer the affairs and the property of the Assn until the Applicable Date. The names and post office addresses of the initial members of the Board of Directors are as follows: Then there are 3 people listed who were the Developers. (The Pres only reads what he wants to read. Seem he didn't read INITIAL BOARD AND WHO THEY WERE.)

Under Sect 4 -Term of Office Generally.- After the applicable date, three of the Directors elected pursuant to Article IV (Nomination and Election of Directors) shall be elected to serve for a term of two (2) years. Two (2) of the remaining Directors shall be elected to serve for a term of one (1) year. Members of the Board of Directors shall hold office until their respective successors are elected, or until they are removed or resign. Each Director elected thereafter shall be elected for a two (2) year term.

I appreciate everyones response and suggestions, now I have to put it all together and make a decision on how to handle this. I'm thinking of sending an official letter to the BOD using suggestions from this forum. I haven't made decision yet to send to the entire community. Probably will have to do. Will let everyone know later how this was handled and the outcome. Thanks again to everyone.

Thank you John. You have been very helpful explaining this to me. "Keep it simple".

JohnC did a great job in simplifying what actually is a simple statement in your bylaws. That section is all you should use with the prez & the board. Anything else just muddies the waters.

Nancy

Well so far, so good. It is now recognized that you should have a 5 person BOD. Now work on getting someone acceptable to you in that 5th chair. Talk it up with fellow owners. Find out if nominations from the floor can be made. If so, then have some made.

Until I see the language of the Bylaws, anything is possible. Governing documents over 20 years old have had some very strange language. I wonder if some attorneys really understood what they were doing, or was it done on purpose.

Richard I can't get the by-laws to you, however, if you will go the NC Planed Community Act 47F and NC NON-Profit Corp Act this is where our Covenants and By-Laws come from. Our community is not over 20 years old. Can't answer your last question. If you read some of the prior posting on this forum you may find some answers to your questions. Thanks for responding.