How to handle an illegal Board Position

Started by JosephS21 • 64 replies • 4947 views

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JosephS21 (South Carolina)
Posts: 54

Posted:

Hi everyone.
After nine months of placing pressure on the Board I along with 2 others are running against the 2 incumbents that we feel is where our problems lie.
Here is my concern. The Board for the second time this year has changed positions since our pressure. The one incumbent was our Treasurer of which we have some real concerns has now been made VP. They moved our VP to Secretary/Treasurer and according to our By-Laws the Secretary is NOT allowed to hold 2 positions. We feel they are preparing for a loss and the Secretary who is now just a Director will resign which will probably allow the other back on the board because of his number of votes.
So the election is in 3 weeks - is there an advantage of going after the illegal board member and his position at the meeting or prior and is it possible to have him or someone removed for their actions?

GlenL (Ohio)
Posts: 5,491

Posted:

Joseph it would take longer than three weeks to go after the two members, better to concentrate your time and energy into getting elected.

Studies show that 5 out of 4 people have problems with fractions

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By GlenL on 08/19/2015 8:02 PM
Joseph it would take longer than three weeks to go after the two members, better to concentrate your time and energy into getting elected.

Good advice from Glen.

Sikubali jukumu. Read all posts at your own risk.

JosephS21 (South Carolina)
Posts: 54

Posted:

Thanks..
Our focus for almost 9 months has been campaigning and preparing for the election. We have suspicion that the election is rigged.
There has been comments made by the maintenance staff that they are "untouchable" just adds to suspicion. The frustration is so bad
that members are selling, losing interest to attend and vote.
We have all the warning signs of big trouble - the start of many large unfinished projects, contractors are all friends and family, the now VP (past Treasurer) has onsite security (which is virtually non-existent) is making big purchases for his other onsite business, we attend board meetings and they do the exact opposite of what we ask, over spending by double in the budget lines that reflects their services and on and on.
We have prepared for our meeting - Motions to terminate contracts (for conflicts and ethics), validation of votes (they refuse to give a count - only a percentage, and every year they change paragraphs around on proxy to confuse people - my opinion) etc. We have a recall drafted just in case.
I personally believe our MC and VP are working together - the numbers in the budget has a clear spike and the lack of response coincide with his entrance to the board.

I need to poke as many holes as I can at this meeting and try to get at least one of them out. As we all know a legal battle is a waste of time and money.
Any advice or ideas on how I may ask or demand a step down for the illegal position would help greatly on our efforts.
Thanks for your suggestions - this forum has been a big help.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Most important questions:
1. How many units?
2. How many votes do you have in your pocket?

Sikubali jukumu. Read all posts at your own risk.

JosephS21 (South Carolina)
Posts: 54

Posted:

608 units..
Only 130 are full time residents which is part the problem and we have 3/4 of those.
We have spent money on mailing to inform others just recently - election will tell there. Some have reached out and offered their votes.
So you see the dilemma.

I want to keep the pressure tight.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Numbers look difficult.

Some suggestions:
1. Strongest argument you have is that they are spending double the budget amounts and there are unexplained spikes in expenditures. You may even get the remote owners energized with that. Best to choose one or two primary messages.
2. If board member is hiring security for his own business and having the HOA pay for it, that's clearly a conflict of interest. Youer second strong message.
3. IMO, difficult to be successful on motions to terminate contracts. Distraction. Better to focus on getting new blood on the board.
4. You can draft and send out your own proxy - You don't have to rely on theirs.
5. Many states allow HOs to demand an independent count of voting results. Check your state statutes.

Best of luck.

Sikubali jukumu. Read all posts at your own risk.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

NPS and Joseph

SC allows proxies but your Covenants/Bylaws can override this. Assuming they do not, then the latest dated proxy is the one that counts/matters.

Jan 1 dated proxy says NO. Jan 2 dated proxy says YES. The YES controls.

JosephS21 (South Carolina)
Posts: 54

Posted:

Nps and JohnC46,

Thanks again for your input.
Our by-laws allow proxies to remove officers with 67% of the members - with the numbers I shared above it will be tough.
As far as Meeting Minutes, Amendments, Covenants etc - I would be more successful pulling my own teeth. They continue to resist showing us these items using excuses that there are other members names on the minutes and for privacy reasons we are not allowed to see it or whatever else they can come up with, the minutes for last years meeting was incorrect - we believe that these minutes do not exist and the shots are being called by our suspects.

If we fail to gain a seat on the board in 3 weeks, I fear our suspect will be moved to President.
We have aligned some members that will pony up some cash for information mailings, Lawyer to write letter for release of records, and proxies to remove the board member. 2 of us sent a letter to each owner with our resumes and asking for vote - just that alone cost a nice penny. I have even considered sitting down with some of the local legislators who have been on the recent news trying pass bills limiting these HOA's - but I am held back by what the shame and exposure will do to our value if publicized and if not done we will see are funds depleted, large dues increase and/or assessment all for their pockets.

Thanks again.

GeorgeR8 (Arizona)
Posts: 182

Posted:

You are running 3 people to replace two. That may give the advantage to the incumbents since the anti incumbent vote will be split among 3 people. At least that is my take on it.

JosephS21 (South Carolina)
Posts: 54

Posted:

GeorgeR8,

I understand and somewhat agree. However, Myself and one other has strong background and think we will take the large majority. The other has a strong tone to his approach but sheds light on issue, I thinks he will lessen the incumbents votes.

Strange occurrence today, which makes me believe we may have succeeded but I am appalled at their action. For the first time the MC on behalf of the Board has resent the proxy to everyone asking to vote and in big bold RED letters states "YOUR PREVIOUS PROXY WILL BE VOID AND THIS WILL COUNT AS YOUR VOTE"...
I have never seen such an underhanded reach. They will stop at noting including wasting our money on postage for their personal gain. I hope I am right about what I am thinking and we win this..

Thanks for input...

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By JosephS21 on 08/21/2015 5:58 PM
GeorgeR8,

I understand and somewhat agree. However, Myself and one other has strong background and think we will take the large majority. The other has a strong tone to his approach but sheds light on issue, I thinks he will lessen the incumbents votes.

Strange occurrence today, which makes me believe we may have succeeded but I am appalled at their action. For the first time the MC on behalf of the Board has resent the proxy to everyone asking to vote and in big bold RED letters states "YOUR PREVIOUS PROXY WILL BE VOID AND THIS WILL COUNT AS YOUR VOTE"...
I have never seen such an underhanded reach. They will stop at noting including wasting our money on postage for their personal gain. I hope I am right about what I am thinking and we win this..

Thanks for input...

What was done "YOUR PREVIOUS PROXY WILL BE VOID AND THIS WILL COUNT AS YOUR VOTE" is entirely legal. The BOD is playing hardball politics and I kind of admire them for doing such. At least they were upfront with the wording.

If you want to play softball, then do so. Me, I like hardball.

NpS (Pennsylvania)
Posts: 4,216

Posted:

What is the nature of the proxy?

1. Is it a directed proxy, or is it an open ended proxy?

A directed proxy says "I want A to vote for X on my behalf.
An open proxy says "I want A to vote for whoever A wants on my behalf.

2. Is there a default person named on the proxy form?

For example "I select __________________ (John Smith if no name entered) as my proxy."

3. Does it name all of the candidates?

Sikubali jukumu. Read all posts at your own risk.

JosephS21 (South Carolina)
Posts: 54

Posted:

JohnC46,
I threw the first pitch.. And hardball it is. I have had them on their toes for 9 months.
I am all about legal wording but, it is my dime they just spent on a scare tactic for their benefit
by re mailing the proxy.
Thanks for the push...

JosephS21 (South Carolina)
Posts: 54

Posted:

NpS

The proxy is for the election in 3 weeks at annual meeting.

We have one of 2 choices on the proxy:

1. ______ "I want A (MC) to vote for whoever A wants on my behalf."

OR
2. ______ "I want A (MC) to vote for X on my behalf."

Please Select only 2

___ Candidate A (incumbent) ___ Candidate D
___ Candidate B ___ Candidate E (incumbent)
___ Candidate C

Thanks

TimB4 (Tennessee)
Posts: 21,061

Posted:

Quote:

Posted By JosephS21 on 08/21/2015 5:58 PM

"YOUR PREVIOUS PROXY WILL BE VOID AND THIS WILL COUNT AS YOUR VOTE"...

Make a lot of copies and start knocking on doors again just to be sure.

The members who you have proxies from need to understand that the previous proxy was good and is still valid unless they fill out a new one.

TimB4 (Tennessee)
Posts: 21,061

Posted:

So it looks like the MC is casting votes on behalf of members.

That is legal but, I believe, inappropriate in this situation.

Remake the proxy with I want ___________ to vote (vs. MC) then, as I said, go around and knock on doors.

BTW - if the new proxy form fails to include the date, the proxy itself can be challenged (as there is no way to determine which proxy came first).

JosephS21 (South Carolina)
Posts: 54

Posted:

TimB4
Thanks..
If I get in or not I do intend to challenge the wording for change.

Funny - They have not put a date or respond by date on the new proxy only "2nd Proxy" marked at the top..
I wonder if it could be challenge with that marking. I have already begun contacting members to ignore if they do not intend to change their votes.

I truly believe our MC is in total control and really calling the shots with our Treasurer now just turned VP 4 weeks ago demonstrates to me the political manipulation and may validate who I believe are the culprits.

I would appreciate you thoughts about "2nd Proxy" vs Missing Date

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By TimB4 on 08/22/2015 4:45 AM

The members who you have proxies from need to understand that the previous proxy was good and is still valid unless they fill out a new one.

Correctamundo.

Sikubali jukumu. Read all posts at your own risk.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Joseph

I now have a concern over who counts the ballots. Can you describe the process? Is the MC involved?

Sikubali jukumu. Read all posts at your own risk.

JosephS21 (South Carolina)
Posts: 54

Posted:

TimB4
See below for EXACT proxy wording. "All previous proxies are hereby revoked." is not worded the same in the letter. Letter states "Only if this is sent the other proxy will be void and original vote counts" - I think I need to get my attorney on standby. Notice that there is no date to have it returned only "Upon Receipt"

Would like to know your thoughts on below.

##th ANNUAL MEMBERS MEETING SEPTEMBER 12, 2015
2nd PROXY

___________The undersigned appoints Person A of MC, Inc., as Agent and Proxy and instructs him/her to cast a vote only as indicated below on the date indicated or at any adjournment of such meeting:
OR
___________The undersigned appoints Person A, of MC, Inc. or ____________________ as Agent and Proxy and instructs him/her to cast a vote based on his/her preference as indicated below on the date indicated or at any adjournment of such meeting:

FOR THE ELECTION OF BOARD MEMBERS: Check or list only TWO (2)
_________ Candidate A (incumbent)
_________ Candidate B
_________ Candidate C
_________ Candidate D
_________ Candidate E (incumbent)
Number in party to attend meeting ________
Unit #: Name:
Signed: ______________________ Signed: ______________________ Date: ___________________

All previous proxies are hereby revoked. Please return this proxy by mail, email ([email protected]) or fax (123-456-7890) upon receipt.

JosephS21 (South Carolina)
Posts: 54

Posted:

TimB4
The MC counts the proxies

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By TimB4 on 08/22/2015 4:48 AM
So it looks like the MC is casting votes on behalf of members.

That is legal but, I believe, inappropriate in this situation.

Remake the proxy with I want ___________ to vote (vs. MC) then, as I said, go around and knock on doors.

BTW - if the new proxy form fails to include the date, the proxy itself can be challenged (as there is no way to determine which proxy came first).

When one signs it, they date it. That becomes the date of the proxy.

The proxy should ask for name, address, maybe Loty#, date.

JosephS21 (South Carolina)
Posts: 54

Posted:

JohnC46

Thanks for clarification. Unit# is address

TimB4 (Tennessee)
Posts: 21,061

Posted:

One thing that's interesting, as the form is can be either a general proxy (option a) or a directed proxy (option b), is that only option b has a line to appoint anyone the individual chooses to be their proxy. This gives the false indication that one cannot collect general proxies and control the vote.

As you are in SC, I would suggest you review the South Carolina Nonprofit Corporation Act of 1994, specifically SECTION 33-31-724 that deals with proxies.

Note, the links above may not provide the most recent laws. The State website is undergoing maintenance and is unavailable. I'd review the above links and then double check the language in the law when the State site comes back up. Here is a link to the State website:

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CB4QFjAAahUKEwjBgrqU67zHAhUFbz4KHXEHCzI&url=http%3A%2F%2Fwww.scstatehouse.gov%2Fcode%2Ft33c031.php&ei=pn7YVcGXOIXe-QHxjqyQAw&usg=AFQjCNFGY8uOmIyd4LT7oobRqitr45ZbXQ

JosephS21 (South Carolina)
Posts: 54

Posted:

I just spoke to the other candidate.
He was told they only have 21% of votes in which is far cry from 51% needed.
The question is what happens is we do not reach a quorum?
Reading by-laws and do not see anything.

TimB4 (Tennessee)
Posts: 21,061

Posted:

Joe,

If you do not reach a quorum, then the election does not take place.

Per SC Code § 33-31-805 (scroll down the page), the sitting director will remain in office unless they resign:

"(d) Despite the expiration of a director's term, the director continues to serve until the director's successor is elected, designated or appointed, and qualifies, or until there is a decrease in the number of directors."

JosephS21 (South Carolina)
Posts: 54

Posted:

Tim
Thanks for the link..

I have read our entire bylaws - there is 2 sentences that just says 51%..
Myself and others are puzzled that this is the only year this happened and if this is correct
we are suspect that it has always been under 51%. When asked, they resist giving the number
of votes that were taken in and will only provide a percentage that a candidate received. That percentage
could be of anything - for all we know it was a number the board gave them because they could decide who and
what they want without a quorum and everyone bought it.

If at the meeting we do not have a quorum, I will challenge it and I think I need to demand to see
last years proxies without violating privacy by outside, attorney maybe.

My gut tells me they are trying to confuse/scare the members to try and get or change votes because
we have them beat.... These next 3 weeks will be brutal until the real answer.

TimB4 (Tennessee)
Posts: 21,061

Posted:

Quote:

Posted By JosephS21 on 08/22/2015 2:52 PM

I have read our entire bylaws - there is 2 sentences that just says 51%..

Joe,

Can you give the exact language for a quorum at a meeting and the language to elect?

51% of the membership is different than
51% of the voting members (or 51% of eligible votes), which is different from
51% of the votes cast, which is different from
51% of members in attendance

JosephS21 (South Carolina)
Posts: 54

Posted:

Tim,

Section 8. Voting procedures for Directors
At any election of Directors to the Board of Directors, each Voting Member may cast, in respect
to each vacancy, as many votes he or she is entitled to exercise under the Articles of Incorporation.
The candidates receiving the largest number of votes wins.

Section 11. Quorum.
Except as otherwise provided in these By-Laws or in the Master Deed or the
Articles of Incorporation the presence in person or by alternate of the Voting Members representing
fifty-one (51%) percent of the total vote of the Association shall constitute a quorum at all
meetings of the Association. Any provision in the Master Deed concerning quorums is specifically
incorporated herein. So long as a quorum is present at the opening of a meeting, business may
be transacted until adjournment notwithstanding the withdrawal of enough members to leave less than a
quorum in attendance. Further, that at any adjourned meting at which a quorum is present at the
reconvening of such meeting, any business may be transacted which might have been transacted at the
original meeting notwithstanding the withdrawal of enough members to leave less than a quorum in
attendance.

I had to retype this - they only provide us with scanned copies. Just another way to make things tough.

Thanks

TimB4 (Tennessee)
Posts: 21,061

Posted:

Quote:

Posted By JosephS21 on 08/22/2015 4:45 PM

Section 8. Voting procedures for Directors
At any election of Directors to the Board of Directors, each Voting Member may cast, in respect
to each vacancy, as many votes he or she is entitled to exercise under the Articles of Incorporation.

OK. Your governing documents aren't clear. It's possible that the documents are allowing Cumulative Voting vs. Plurality voting

However, the proxy you previously provided indicates the plurality system.

Quote:

Posted By JosephS21 on 08/22/2015 4:45 PM

Section 11. Quorum.
Except as otherwise provided in these By-Laws or in the Master Deed or the
Articles of Incorporation the presence in person or by alternate of the Voting Members representing fifty-one (51%) percent of the total vote of the Association shall constitute a quorum at all meetings of the Association. Any provision in the Master Deed concerning quorums is specifically
incorporated herein. So long as a quorum is present at the opening of a meeting, business may
be transacted until adjournment notwithstanding the withdrawal of enough members to leave less than a
quorum in attendance. Further, that at any adjourned meting at which a quorum is present at the
reconvening of such meeting, any business may be transacted which might have been transacted at the
original meeting notwithstanding the withdrawal of enough members to leave less than a quorum in
attendance.

I had to retype this - they only provide us with scanned copies. Just another way to make things tough.

Thanks

Posted By JosephS21 on 08/22/2015 4:45 PM emphasis added]

Section 11. Quorum.
Except as otherwise provided in these By-Laws or in the Master Deed or the
Articles of Incorporation the presence in person or by alternate of the Voting Members representing fifty-one (51%) percent of the total vote of the Association shall constitute a quorum at all meetings of the Association. /div>

Note: This does not mean 51% of the membership. It means 51% of the members entitled to vote.

Voting privileges are sometimes suspended if the member is behind in paying assessments. If a member can not vote, the total vote of the membership decreases by the number of people who are behind in assessments.

Example A: 100 lots, everyone current in assesments
Quorum = (100 multiplied by .51)

Example B: 100 lots, 5 are behind in assessments and voting privileges are suspended:
Quorum = 49 (100 minus 5 multiplied by .51, rounded up)

Example C: 100 lots, 5 are behind, 2 bring thier account current at the door - reinstating voting privileges.
Quorum = 50 (100 minus 5) plus 2 (who paid)=97 multiplied by .51 and rounded up.

You should ask the MC/Board how many, if any, members have had voting privileges suspended.

Hope this helps,

Tim

TimB4 (Tennessee)
Posts: 21,061

Posted:

Oops, second posting is the charm:

Quote:

Posted By JosephS21 on 08/22/2015 4:45 PM emphasis added]

Section 11. Quorum.
Except as otherwise provided in these By-Laws or in the Master Deed or the
Articles of Incorporation the presence in person or by alternate of the Voting Members representing fifty-one (51%) percent of the total vote of the Association shall constitute a quorum at all meetings of the Association. /div>

Note: This does not mean 51% of the membership. It means 51% of the members entitled to vote.

Voting privileges are sometimes suspended if the member is behind in paying assessments. If a member can not vote, the total vote of the membership decreases by the number of people who are behind in assessments.

Example A: 100 lots, everyone current in assessments
Quorum = (100 multiplied by .51)

Example B: 100 lots, 5 are behind in assessments and voting privileges are suspended:
Quorum = 49 (100 minus 5 multiplied by .51, rounded up)

Example C: 100 lots, 5 are behind, 2 bring thier account current at the door - reinstating voting privileges.
Quorum = 50 (100 minus 5) plus 2 (who paid)=97 multiplied by .51 and rounded up.

You should ask the MC/Board how many, if any, members have had voting privileges suspended.

Hope this helps,

Tim

TimB4 (Tennessee)
Posts: 21,061

Posted:

Oops, I was wrong. Let try number 3

Quote:

Note: This does not mean 51% of the membership. It means 51% of the members entitled to vote.

Voting privileges are sometimes suspended if the member is behind in paying assessments. If a member can not vote, the total vote of the membership decreases by the number of people who are behind in assessments.

Example A: 100 lots, everyone current in assessments
Quorum = (100 multiplied by .51)

Example B: 100 lots, 5 are behind in assessments and voting privileges are suspended:
Quorum = 49 (100 minus 5 multiplied by .51, rounded up)

Example C: 100 lots, 5 are behind, 2 bring their account current at the door - reinstating voting privileges.
Quorum = 50 (100 minus 5) plus 2 (who paid)=97 multiplied by .51 and rounded up.

You should ask the MC/Board how many, if any, members have had voting privileges suspended.

Hope this helps,

Tim

JosephS21 (South Carolina)
Posts: 54

Posted:

Tim

I see that our issue has got you running in a circle. LOL.
Your info is great.

I understand what you are saying so let's assume the following:

608 possible votes
- 58 delinquencies
= 550 eligible votes

The MC only receives 21% (116) total proxies and all are eligible
Now let's assume (hope) I have 64 votes which is 55% of total eligible votes received
Candidate A (incumbent) has 12 votes which is 10% of total eligible votes received
Candidate B has 20 votes which is 17% of total eligible votes received
Candidate C has 14 votes which is 13% of total eligible votes received
Candidate D (incumbent) has 6 votes which is 5% of total eligible votes received

How does this play out giving the confusion of Cumulative Voting vs. Plurality voting? It
Clearly there isn't a quorum and if I understand your assumption....
Myself and Candidate B are clear winners regardless of quorum...

Thanks again

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Joe and Tim

1. Sounds like Cumulative voting to me. A whole other Pandora's Box.

2. Seems clear on the 51% of all eligible voters. Yes some might not be eligible but I expect that will be few. Now remember that is for Quorum only. Not all have to vote. 100 owners. 51 for Quorum via in person or proxy. Only 10 of the 51 vote in person or via proxy. 6 of the 10 votes wins thus only 10 of the 51 swing the election. Not typical but possible. One has to keep their numbers straight.

JosephS21 (South Carolina)
Posts: 54

Posted:

John and Tim

I appreciate all your input. The 2 of you actually helped me
when I first started this 9 months ago.

I am understanding that if there are only 50 people at the meeting already
counted by proxy and my numbers stated above are it - then game over, I win..

Thanks again.

TimB4 (Tennessee)
Posts: 21,061

Posted:

Joseph,

The 51% is only for the membership meeting to take place and conduct business.

A quorum is not votes. It is the number of members present (in person or by proxy) that equate to 51% of the members eligible to vote. Therefore, ignore percentages (as you outlined them). Only count how many proxies are brought to the meeting and add to that the number of lots represented in person. This number needs to be 51% of the total votes of the Association (i.e. the number that can vote).

You stated you had 550 eligible. Then you need 281 present (in person or by proxy) to hold the election.

Once you have a quorum, the meeting can be held and an election can take place.
Ballots are filled out (proxies are not ballots), turned in and votes tabulated.
Those candidates with the most votes win.

JosephS21 (South Carolina)
Posts: 54

Posted:

Tim,

The proxy represents an owners vote by way of MC recording it on their behalf and acknowledges
them being a part of the meeting adding them to the number needed for a quorum.

At the meeting only 40(of 550) attend, now these people have sent in a proxy and technically
do not need to be there. However, they are given a piece of paper (ballot) if they choose to
change their vote. This happens every year.

So the 21%(116) I mentioned is less than half of what we need to reach a quorum. If this is the
same in 3 weeks then nothing changes. This opens another can of worms, as this now validates our suspicion
that this has been happening for a long time and that the board has been choosing among themselves a
member and just giving us a percentage to make it seem they are not doing anything wrong to avoid another meeting.
This is why it was mumbled by one of the MC's maintenance crew servicing our property that we
will never win. I need to attack this next.

I am hot on their tails and they know it. If they do not play by the book I will be all over it.
My problem now is that the real numbers hurt us and they know they can use against us. As you can see
they have played it well. Even sending a 2nd proxy to validate their efforts to reach a quorum.

I need to challenge this at the meeting. I now need to know if I can demand all the proxies from the last
3 elections and how. They resisted at last years election.

They are chewing at our reserves at an accelerated rate that we will be faced with increase in dues and possible
assessment. This action in our opinion is intentional as it is all friends and relatives gobbling up.
This books and place were impeccable until our Treasurer now VP came on - he and MC are quite friendly and
go way back.

I really want to avoid legal avenue. This will be ugly and costly. The attorney who was part of this in 1996
at construction and put all the part paperwork together is still here by way of MC.

Thanks again

TimB4 (Tennessee)
Posts: 21,061

Posted:

Quote:

Posted By JosephS21 on 08/23/2015 4:58 AM

I am hot on their tails and they know it. If they do not play by the book I will be all over it.
My problem now is that the real numbers hurt us and they know they can use against us. As you can see they have played it well. Even sending a 2nd proxy to validate their efforts to reach a quorum.

The question should always be asked in the meeting if a quorum is present.
This fact (of a quorum being present or not) should be part of the minutes.

Again, and as you know, if there is now quorum, then an election may not take place. If it does take place, then the election is invalid.

Keep in mind that without an election, the sitting board members stay in place and may appoint their own replacements (all per SC Corporate law). Therefore, technically, one could say that the Board did just that but utilized the numbers from the invalid election to appoint their replacements.

Simply another way of looking at the issue at hand.

JosephS21 (South Carolina)
Posts: 54

Posted:

Tim..

Understood.

They have always stated that we "just made" quorum at 51% - this is more fishy then ever. However, it would
be misrepresentation and in my mind illegal if it did not exist and the stated it in the minutes.

I have been the only one that has not bitched and challenged them with the By-laws, Legal reference and
pointed out their fiduciary responsibility.

So I must challenge the previous minutes and proxies.

I read somewhere in SC law that a director must leave after five years if a quorum has not been met.
I would like to use this against them if possible if in fact I could prove the previous quorums wrong.

Thanks

TimB4 (Tennessee)
Posts: 21,061

Posted:

Quote:

Posted By JosephS21 on 08/23/2015 8:15 AM

I read somewhere in SC law that a director must leave after five years if a quorum has not been met.
I would like to use this against them if possible if in fact I could prove the previous quorums wrong.

If you find that, please cite the section for us.
I've personally never heard of such a requirement in any statute.

GlennB4 (Florida)
Posts: 12

Posted:

Wow! I'm not going to address the proxy issue as there are plenty of intelligent replies already.
- Our by-laws prevent the HOA President and Treasurer from holding additional officer positions. Have you found similar language in your CC&R's? Can you request comment/question from the floor (of members) at the Board meetings? (See Roberts Rules) If so, I'd ask why there's a violation of the By-laws, Rules & Regulations, etc.
- Is "MC" the manager of the community. If so, is the MC a member of the Association? If not, how can the MC "vote" for proxy votes/
- Here in Fl, in our Association, per the Florida Statutes and our governing documents, the members of the Community are absolutely entitled to any and all Board meeting minutes. All members are given a copy of the By-laws, Articles of Incorporation, Occupancy Agreement (which they must sign), and Rules & Regulations. Additionally, members vote annually on the proposed budget. We have verbiage that REQUIRES investigation if approved budgeted items are a certain percentage over budget.
- Our By-laws require 3 contractor bids for any contracted work that is done to community property.
- Of course a meeting of the Board occurs any time there is a quorum (of Board members) and minutes MUST be taken and made available to ALL members in a "reasonable" time. (Reasonable time is discussed in our state statutes)
Didn't mean to be boring, just sharing information that might help!

TimB4 (Tennessee)
Posts: 21,061

Posted:

Quote:

Posted By GlennB4 on 08/23/2015 8:24 AM

- Is "MC" the manager of the community. If so, is the MC a member of the Association? If not, how can the MC "vote" for proxy votes/

With proxies, a member is identifying an individual to attend the meeting and cast a vote on their behalf.

Although it's common to give assign another member as a proxy representative, there is no requirement that the individual identified be another member of the Association. It can be anyone the member trusts to represent them (friend, other family member, attorney, etc.).

Quote:

Posted By GlennB4 on 08/23/2015 8:24 AM

- Of course a meeting of the Board occurs any time there is a quorum (of Board members)

Not exactly correct.

A meeting of the Board occurs when a their is enough board members together that meets the quorum requirement (typically a simple majority) AND Association business is discussed.

A Board member can invite other board members over for a bar-b-Que and, as long as Association business isn't discussed, not have a meeting. It's just friends/colleagues enjoying some social time together.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Joe

To refresh. You have 608 units with only 130 full time residents. You will need 305 (assuming all eligible) to achieve quota.

The only possible way if for you to make quorum is with proxies.

A proxy can say it is to be used for quorum only. This would mean they are not voting but with enough to form a quorum, then an election can be held.

Many will not return a proxy that is assigned to someone they do not know and/or use it to vote for someone they do not know. Many will also let the MC be proxy designated especially if they have no issues as in they do not want to rock the boat.

You might have a better chance to obtain a quorum only proxy from the absent owners and then work on getting people to vote for you.

What I think will happen is you will be able to force the BOD to follow the Bylaws but there will not be a quorum and the existing BOD will remain seated and they will be able to fill any vacancies. Sorry to say but I expect you will be back to square one when the election is over.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Joe

SC does allow a BOD meeting to be adjourned for 30 days and when readjourned, the quorum requirements are reduced by 50 %.

Meeting one, 300 for a quorum. Quorum not met.
Meeting two, 151 for a quorum. Quorum not met.
Meeting three, 76 for a quorum. Quorum met. Business done and election held.

In one SC HOA of 700 homes, we did have to go to a 3rd meeting to achieve quorum.

If you go this route I expect they will fight you tooth and nail. You must be prepared which in most cases will mean legal counsel to fight it out for you.

Hope this helps.

JosephS21 (South Carolina)
Posts: 54

Posted:

Quote:

Posted By GlennB4 on 08/23/2015 8:24 AM
Wow! I'm not going to address the proxy issue as there are plenty of intelligent replies already.
- Our by-laws prevent the HOA President and Treasurer from holding additional officer positions. Have you found similar language in your CC&R's? Can you request comment/question from the floor (of members) at the Board meetings? (See Roberts Rules) If so, I'd ask why there's a violation of the By-laws, Rules & Regulations, etc.
- Is "MC" the manager of the community. If so, is the MC a member of the Association? If not, how can the MC "vote" for proxy votes/
- Here in Fl, in our Association, per the Florida Statutes and our governing documents, the members of the Community are absolutely entitled to any and all Board meeting minutes. All members are given a copy of the By-laws, Articles of Incorporation, Occupancy Agreement (which they must sign), and Rules & Regulations. Additionally, members vote annually on the proposed budget. We have verbiage that REQUIRES investigation if approved budgeted items are a certain percentage over budget.
- Our By-laws require 3 contractor bids for any contracted work that is done to community property.
- Of course a meeting of the Board occurs any time there is a quorum (of Board members) and minutes MUST be taken and made available to ALL members in a "reasonable" time. (Reasonable time is discussed in our state statutes)
Didn't mean to be boring, just sharing information that might help!

Glenn..
Not boring.. I appreciate every bit of information from everyone.
1) In our By-laws our Secretary is only position forbidden to hold to seats - he now is Secretry/Treasurer (illegal). They just promoted the Treasurer to VP (this is my target - ethics, conflicts etc.) I need to stop him before they make him President. They have been playing musical Directors all year every time I poke. My guess is they are trying to protect themselves. I now need to scold the Secretary/Treasurer who was VP as of 3 weeks ago for holding illegal seat.

2)MC is manager not member of Association. They get vote because proxy directs it (see above) especially if your not paying attention when filled out.

3)There is no communication for any meetings - no minutes that they will share (privacy excuse) - as far as I am concerned they do not have meetings. We are handed the budget and we are to accept it, nothing to sign. I am their nightmare because I am getting people to question.

4)They refuse to let us see the bids and we are not allowed to view the contracts. We asked for the job descriptions of MC's own maintenance crew working our complex and they said "We will not, they are our employees"

5)There is no such thing as reasonable in their book

Thanks

JosephS21 (South Carolina)
Posts: 54

Posted:

Quote:

Posted By JohnC46 on 08/23/2015 8:54 AM
Joe

SC does allow a BOD meeting to be adjourned for 30 days and when readjourned, the quorum requirements are reduced by 50 %.

Meeting one, 300 for a quorum. Quorum not met.
Meeting two, 151 for a quorum. Quorum not met.
Meeting three, 76 for a quorum. Quorum met. Business done and election held.

In one SC HOA of 700 homes, we did have to go to a 3rd meeting to achieve quorum.

If you go this route I expect they will fight you tooth and nail. You must be prepared which in most cases will mean legal counsel to fight it out for you.

Hope this helps.

John
Thank you very much for this one!
This is exactly what I need for my arsenal - I will push this at the meeting for sure. I can get another mailing out to all owners and block VP being moved to President.
Question: Do I need a majority floor vote to adjourn the meeting?

JosephS21 (South Carolina)
Posts: 54

Posted:

Quote:

Posted By JohnC46 on 08/23/2015 8:47 AM
Joe

To refresh. You have 608 units with only 130 full time residents. You will need 305 (assuming all eligible) to achieve quota.

Many will not return a proxy that is assigned to someone they do not know and/or use it to vote for someone they do not know. Many will also let the MC be proxy designated especially if they have no issues as in they do not want to rock the boat.

John
That is the problem here - they are not returning the proxy.
Thanks

JosephS21 (South Carolina)
Posts: 54

Posted:

Quote:

Posted By TimB4 on 08/23/2015 8:18 AM

If you find that, please cite the section for us.
I've personally never heard of such a requirement in any statute.

Tim
This is what I read, and don't know if I fully understand it.
I am interested in the second sentence starting with "Except for designated or appointed directors, the terms of directors may not exceed five years.
If was appointed and not elected is this a tool?

http://www.scstatehouse.gov/code/t33c031.php

SECTION 33-31-805. Terms of directors generally.

(a) The articles or bylaws may specify the terms of directors. Except for designated or appointed directors, the terms of directors may not exceed five years. In the absence of a term specified in the articles or bylaws, the term of each director is one year. Directors may be elected for successive terms.

TimB4 (Tennessee)
Posts: 21,061

Posted:

That means 2 things:

1) The Bylaws may specify the term of a Director

2) Regardless of what the Bylaws specify, no term may be more than 5 years (Example: The President of the US serves for a term of 4 years).

3) There is nothing in the statute that limits the number of terms an Individual may serve as a Director (Example: The President of the US may only serve for two terms). Therefore, unless your Bylaws specify a limitation in the number of terms one may serve (aka term limits), an individual may serve as many terms as they can be elected or appointed to serve.

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