By laws Interpretation

Hi All,

I am new to this forum and need some help in bylaws interpretation. Our board has 5 members out of which 3 are builders and 2 are homeowners elected through homeowner votes an year ago and I am one of them. The builder is done with the community and when residents requested them to handover the board to us, the builders agreed, but builders wanted to appoint one of the resident as the board member for the unexpired term of one of the builder. Residents are not happy with it as they would like to have all three positions opened up for elections as opposed to appointment or if nomination is inevitable to maintain 3 board members at any time to give them a choice to propose a name. My question is our by laws clearly specify this appointment needs majority of the other board members votes... but since they are builders do they have additional rights that supercedes this by law? does the builder have right to appoint anybody without seeking other board members votes even when they do not own any lots in the community??

Appreciate ur help..

Susan.

Yes, agree with Tim. The language you might look for, though, is "declarant," which is what the builder or developer is called, at least in Calif.

So, look both in your Bylaws and in your CC&Rs (aka: declaration, covnenants.)

From what I've seen, a majority of the Board can appoint (elect) another or others to fill vacancies. With the developer turning over control, three vacancies are being created. And the developer has that majority to (s)elect new directors.

How long a term would these directors, appointed by a majority of the board, serve?? That should be in your Bylaws too.

Your bylaws also should say how often directors are elected by h/ownrs to the board. Read that part too.

thanks for the reply. Our by laws specify as below.....

a. A vacancy created by the resignation, death, or disability of a director prior to the expiration of his/her term, may be filled by the affirmative vote of the majority of the remaining directors , regardless of whether theta majority is less than the quorum, A director so appointed to fill a vacancy is appointed for the unexpired term of the member's predecessor in office.

This to me means that it does need majority of the rest of the board members once one director who is a builder decides to leave.... But since the resignee being a builder , does it give him authority to appoint any resident of his choice without seeing other board members votes???

In another section of the by-laws it says
During the existence of Class B membership, Declarant shall retain control and authority to appoint all members of the BOD(the "declarant control period") until the earlier to occur of the following:

1. On or before 120th day after75% of the authorized residential interests transfer to homebuyers, 1/3of the mebers to be elected by homeowners; or

2. From and after the 10th anniversary of the date of declaration is recorded, at which 1/3 of the mebers to be elected by homeowner; or

3. Declarant shall retain the control and authority to appoint 2/3 of the members of the BOD of the association until such time as Declarant no longer owns any portion of the property..

It is the third clause(3) as opposed to (a) mentioned above I am getting confused on.....

Susan,

That section, to me, is fairly clear if you read it in sections.

First and foremost, the Declarant controls who is on the Board until one of the following occurs:
a) 6 months after 75% of the property is sold
b) 10 years after the CC&Rs were recorded

When either a or b occurs, the members will then be able to vote to fill 1/3 of the seats.

Additionally, as long as the Declarant owns any property within the development, they may appoint up to 2/3s of the Board.

Therefore, in my opinion, since the Declarant is only looking to name a single individual to the Board to fill a vacancy, I'd let them do it. The members will still be able to elect individuals to the Board who will be able to control the votes (if needed).