First Elected BOD

Started by JohnC46 • 8 replies • 1741 views

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JohnC46 (South Carolina)
Posts: 14,265

Posted:

We are transitioning from Declarant to homeowners on 01/01/2014. It is a harmonious transition with all working closely to make it happen.

A 6 person Declarant Appointed Transition Committee (all owners) has been working on this transition for the past 3 months. On 01/01/2014 this Transition Committee will become the Acting BOD. The Committee was introduced at a General Membership Meeting. At this meeting we also announced we would be working to have a BOD Election at our Annual Meeting in April at which time the Elected BOD will take over from the Transition Committee. All were in favor of that plan.

Well here is the problem. Our Bylaws call for a 50% (61 out of 112) Quorum at the Annual Meeting in order to do business including a BOD election. The question arises what if we do not have a Quorum at the Annual Meeting thus unable to hold an election?

The belief of the Advisory Committee is Quorum or no Quorum, we go ahead and have an election so we can at least get a Elected BOD (5 Member BOD) in place. Several on the Transition Committee have said they will run for election. I am on the Transition Committee but I will not be running for election. I have done my part for the transition. Enough is enough for me at this time.

Keep one thing in mind. Transitions are a one time deal and there has been very little written on how to do such. We can find no guidelines.

Has anyone experienced this before and how was it handled? Other opinions welcomed.

Thanks

TimB4 (Tennessee)
Posts: 21,062

Posted:

John,

I believe you know the answers to the issues but are looking for a way out if no quorum is met.

If there is no quorum, the committee can recess and reconvene to try and obtain a quorum.

Another possibility is to have the Declarant change the governing documents (if they are allowed to) prior to the actual transition to have a lower quorum requirement.

In the interim, I'd suggest for everyone to knock on doors and solicit proxies in order to ensure a quorum.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By TimB4 on 12/04/2014 5:42 AM
John,

I believe you know the answers to the issues but are looking for a way out if no quorum is met.

Yes I am looking for a way out. Was hoping someone had faced this one time election and could cite a reference.

If there is no quorum, the committee can recess and reconvene to try and obtain a quorum.

Aware of that.

Another possibility is to have the Declarant change the governing documents (if they are allowed to) prior to the actual transition to have a lower quorum requirement.

We had the HOA lawyer look into that. SC Articles of Incorporation say it can be done but the original Quorum in the docs (50% in our case) must make the change. Thus a no go at this time. This will be something we will work on at a later time. We want 25%.

In the interim, I'd suggest for everyone to knock on doors and solicit proxies in order to ensure a quorum.

I think this will have to be the way we do it. We will have a few months to get it done.

If any one can cite another method used please reply.

Thanks Tim.

DouglasK1 (Florida)
Posts: 2,046

Posted:

Electing a BOD without a quorum is only a problem if someone challenges it. Luckily, the last couple of years we've gotten enough proxies to meet the quorum requirement, but we had several years where boards where elected without a quorum. If someone had challenged it, it could have gotten messy, but the same apathy that keeps us from getting quorums allowed the "improper" election results to stand.

As Tim mentioned, the best thing to do is get enough proxies to be legal.

Escaped former treasurer and director of a self managed association.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Doug

Like many on here do, I am shopping for an answer I like............LOL

Thanks, and I agree proxies will probably be the way we have to go.

JerryD5 (Colorado)
Posts: 218

Posted:

In our HOA, we used to have a 50% of homeowners to have a quorom. I believe the previous board (prior to the declarant turned over the property) had the percentage changed to 20% (actually the declarant did all the required work). It has been much easier to conduct annual meetings since then. I seriously would recommend the percentage be lowered. We still get proxies of course. In fact, I had more proxies than there were homeowners in attendance at our last annual meeting 2 months ago.

EmmaH1
Posts: 674

Posted:

Posted By DouglasK1 on 12/04/2014 8:46 AM
Electing a BOD without a quorum is only a problem if someone challenges it. Luckily, the last couple of years we've gotten enough proxies to meet the quorum requirement, but we had several years where boards where elected without a quorum. If someone had challenged it, it could have gotten messy, but the same apathy that keeps us from getting quorums allowed the "improper" election results to stand.

WOW!!!! NICE!!!!!!

(no wonder some people don't want laws passed.......lol)

TimB4 (Tennessee)
Posts: 21,062

Posted:

Although many may consider it unthinkable. The reality is that a Board can basically do what they want until challenged. When challenged, they will need to support their decision and deal with any consequences. However, it takes someone to challenge them.

In my opinion, this goes for laws as well.

We often read posts where Board refuse to allow various documents to be seen even though there is a law that specifies a member has a right to see the documents being refused. Even when the member takes the issue before the courts, the Board is simply told to provide the documents. They may or may not be told that the Association has to pay the legal expenses and court costs. Often, as the case drags on, members will get upset enough that they vote that Board out and a new Board comes in and settles the case before it goes to court.

With or without the law, the result is the same. The Board can do what they want until challenged.

Since the result is the same, I'd prefer less laws and more involvement from the membership.

EmmaH1
Posts: 674

Posted:

Since the result is the same, I'd prefer less laws and more involvement from the membership.

Tim,

I agree we all I think would like to see more involvement from the membership.

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