AGM elections on 3 year cycle or every year after a term is served

John,

Procedural issues are typically addressed in Corporate law as well as your governing documents.

When a vacancy occurs, the Directors may appoint someone to fill that position for the remaining term. In other words, if the individual was elected to a three year term and served 2 years, the person appointed to replace them would serve for 1 year and then that seat would be up for election.

See Florida Not For Profit Corporation Act. specifically FL 617.0809:

3) The term of a director elected or appointed to fill a vacancy expires at the next annual meeting at which directors are elected. Any directorship to be filled by reason of an increase in the number of directors may be filled by the board of directors, but only for a term of office continuing until the next election of directors by the members or, if the corporation has no members or no members having the right to vote thereon, for such term of office as is provided in the articles of incorporation or the bylaws.

It is possible that the Association attorney was correct, If you are on a three year cycle for directors then elections would be held in 2006, 2009, 2012, 2015.

What I find strange is that your Directors are on 3 year terms. Typically, when an Association has seats for 3 years, the terms for all seats are staggered, which allows for an election every year but not for all seats.

John

Typically one cannot call for an election any time they desire to. Election times are generally at the Annual Meeting.

One can do a recall on part or all of the BOD and if successful then have an election immediately following the recall to fill the recalled positions.

Point 3. should have said "What are the remedies if they do illegally refuse"

TimB4,

Thanks again for your comments.

I should have been clearer with my comments and given you some background.

We have a dispute in regard to whether long term rentals (LTR's) are allowed in the community. The President of the HOA has declared in the past that he wished to discourage long term rentals and this is something the HOA have taken legal advice on with an out of town lawyer and their lawyer has determined that they are not allowed. 2 other local attorneys have determined that LTR's are allowed. As far as I'm concerned and other homeowners agree that the HOA Governing Documents do not even come close to prohibiting LTR's. Also they have been permitted for the last 9 years since the resort was developed. The homeowners who disagree with the out of town lawyer include 5 former board members (including the former President and current Vice President who was appointed in an advisory but has been frozen out of recent meetings) and 2 Realtor.

The only member election that has taken place was in 2006. No quorum has been achieved in any AGM since then. All current members of the board are replacements of resigned positions.

There is probably going to be litigation in regard to the LTR issue but an alternative may be to vote out the current board. The quorum is 30% but a second meeting can be called if this isn't achieved with a quorum then being 15%. I do not believe the directors will do anything to encourage an election.

So in response to your answers, you say the HOA are holding elections every 3 years, this may be what they would do but we've never had a quorum so it's impossible to tell. I am therefore wondering, given there is nothing specific in either the HOA Governing documents or statute which could without doubt be interpreted to suggest that elections are periodic then it might be that an election could (special meeting) or should (AGM) be possible now the terms of the directors who were elected in 2006 have expired. There is very little chance of managing 50% support for a recall, however a special meeting can be called by 25% (from governing docs) which might be possible.

Alternatively, if there are currently no positions due for election as there is something that dictates that elections are every 3 year period then 2015 is the next opportunity. However with us being unable to achieve 50% support and it not being a condominium, should the board fail to allow an election then there's nothing that can be done.

Thanks again.

>The issue isn't not holding elections. The issue is failure to obtain quorum (or membership apathy).

Yes, apathy is a problem but also directors have never made it known that elections can take place. It will be hard to obtain a quorum but possible with hard work. We don't want to go through all that effort to find that the board say (as an earlier board did in 2011) that elections are every 3 years and it is not an election year.

Could you please clarify why you believe elections are every 3 years. There is nothing specific in either statute or the HOA Governing documents. Directors were elected by members in 2006 and the term for a director is 3 years. The terms are now all expired. Are you completely convinced?

I would personally say that there should be an election now whenever there is a quorum. Then when a director is actually elected by members a new 3 year term starts. I don't see anything specific in statute or the HAO documents to say that because there was no quorum in 2009 then each director is granted a new 3 year term and then again in 2012.

If I am right then I believe that just 25% of members can call a special meeting, specify the agenda and vote on all 3 seats.

Let me try this again.

I would suspect that once nobody was elected to fill a new term that the Board would appoint the same individual to the seat for a new term. Effectively being the same as if the individual was reelected to the new term.

Not always. If it's within the corporate statutes, it may be what favors the corporation (which would be to make sure business operations continue).

As I said, it is possible under any of those statutes, that the Board could appoint someone (even the same individual) to fill the new term.


Unless your Association started in 2006, there should have been annual meetings prior to 2006.
Those are the minutes you would need to see a pattern on how often elections were held and to determine any staggered terms. You may have to go back to the beginning, the first annual meeting, and work forward.


Probably. But you would at least know a time frame that they won't fight with.

If you don't want to go through old records to determine what has been going on, then this would be the next easiest thing.


Perhaps. Perhaps not. When there are differing interpretations either the two parties agree to one interpretation (hence the suggestion to simply ask the Board) or one party (likely you) takes the issue to a third party (the courts) for a definitive ruling.

John,

Other than the principal of having elections, what is the main issue that brought this to your attention (conflict with a board member, recent ruling by the Board, etc.)?

Additionally, are you willing to serve on the Board? Even if you have a quorum at the next election meeting, if there are no alternatives, it's likely the same individuals will be reelected (just being honest).

2 questions then:

1) Are you in a condominium development (I ask because you referred to the property as units)?

2) If the Association was formed in 2006, are you still under Declarant control?

The recent law change in regard to condominiums may be something of possible persuasive influence on any arbitration or court. Terms, when they are not staggered, have been outlawed:

“Except in a timeshare condominium, or if the staggered term of a board member does not expire until a later annual meeting, or if all members’ terms would otherwise expire but there are no candidates, the terms of all board members expire at the annual meeting, and such members may stand for reelection unless prohibited by the bylaws.”

Hi Tim,

Thank you (again).

The terms that the directors serve are not staggered. I have read the HOA Governing Documents including the single amendment to the Articles of Incorporation. In 2006, 3 directors were elected by members and the original directors named in the Articles resigned.

If terms are not staggered then does this mean that the director (or any replacement of that director) ceases to be a director on the last day of the original directors term? I was assuming that the statute, which relates to staggered terms, allowed directors to continue until replaced by a vote of members, applied even when terms are not staggered. However I've now seen a lawyers comment, admittedly in regard to another state, suggesting otherwise.

Does this invalidate the status of the board?

Here are the relevant sections from the HOA Governing Documents. Note the amendment to the articles were to bring in criteria in terms of who could be a director. a new section "Removal" was added but this is exactly the same (yes, I've carefully checked) as the "Removal" term which was already in the by-laws:

Original Articles of Incorporation:

Section 2 Term. Directors shall be appointed to serve for three (3) year terms, unless a Director sooner dies, resigns or is removed. There shall be no limit to the number of terms any one Member may serve as a director.

Section 3 Initial Directors. (the names and addresses are then listed)

By-Laws:

Section 2 Term. Directors shall be appointed to serve for three (3) year terms, unless a Director sooner dies, resigns or is removed. There shall be no limit to the number of terms any one Member may serve as a director.

Section 3 Removal. After Turnover any Director may be removed from the Board, with or without cause, by an affirmative vote of a majority of the outstanding votes entitled to be cast by the Members of the association. A Director appointed by the Board as a successor may be removed by a majority of the Board of Directors. Prior to Turnover, the Declarant shall be entitled to remove Directors with or without cause and appoint replacement Directors. In the event of death, resignation or removal of a Director, his successor shall be selected by the remaining members of the Board and shall serve for the unexpired term of his predecessor.

Amended Articles of Incorporation (amended):

Section 2. Qualifications. (the criteria for directors e.g. must be homeowner)

Section 3. Term. Directors shall be appointed to serve for three (3) year terms, unless a Director sooner dies, resigns or is removed. There shall be no limit to the number of terms any one Member may serve as a director.

Section 4. Removal. After Turnover any Director may be removed from the Board, with or without cause, by an affirmative vote of a majority of the outstanding votes entitled to be cast by the Members of the association. A Director appointed by the Board as a successor may be removed by a majority of the Board of Directors. Prior to Turnover, the Declarant shall be entitled to remove Directors with or without cause and appoint replacement Directors. In the event of death, resignation or removal of a Director, his successor shall be selected by the remaining members of the Board and shall serve for the unexpired term of his predecessor.

No. See earlier citation. A Director continues to serve until their replacement is elected or appointed.

Additionally, if there were no elections, it's possible for the Board to appoint the same individual to a new term.


No.

If the Association is incorporated, then corporate statutes apply in addition to HOA statutes, other civil laws as well as Federal regulations.

In fact, per FL 720.303, Associations in FL must also be corporations. Therefore, the Association must comply with corporate statutes in addition to HOA and any other statutes that are applicable.


Let me try to explain it this way -

Director terms run from Jan to Jan.
Director A's term is expiring on Jan 1.
At the Annual meeting in December, a quorum was not obtained and elections were not held.
On Jan 1, the term ends and a new term begins.
Because there is no replacement Director A continues to serve until a replacement is appointed.
At the February Board meeting, Director A resigns and the Board appoints Director A to fill the vacancy just created and to serve the remainder of the new term.

Effective end result - Director A is appointed to a new term.


FL 720.306:

Unless otherwise provided in the bylaws, any vacancy occurring on the board before the expiration of a term may be filled by an affirmative vote of the majority of the remaining directors, even if the remaining directors constitute less than a quorum, or by the sole remaining director. In the alternative, a board may hold an election to fill the vacancy, in which case the election procedures must conform to the requirements of the governing documents. Unless otherwise provided in the bylaws, a board member appointed or elected under this section is appointed for the unexpired term of the seat being filled.

and FL 617.0809.

John.

Based on what you have provided, your Associations issue isn't that the Directors continue to serve. The issue is that a quorum has not been achieved in order to hold elections. If you can gather enough proxies, then a quorum can be achieved at the next meeting where elections are to be held and new Directors may be seated (or the old directors may simply be reelected).

The easiest way to know when that meeting will be is to do as I suggested and ask the current Board when the terms of the current Directors expire.

I don't know any other way to explain this. I'm not an attorney and I do not work in the legal profession. If I'm not making it clear, perhaps I'm not the one to explain it to you.

There should be some record of that action. However, lack of a record doesn't mean it wasn't done.

Often things that should be in the minutes are omitted. They aren't omitted by malice, they are simply omitted because the Board didn't think the issue was important enough to notate. However, that doesn't mean that it didn't happen.

Hi Tim,

Thanks for all your help.

If it did come to litigation I think the board would be hard pressed to claim they elected themselves at the end of their term because the terms for all seats expire at the same time. In any case, it is previous board members who were on the board when the 3 year terms expired. They will confirm that they didn't re-elect themselves.