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JM16 (North Carolina)
Posts: 24
Posted:
Looking for some guidelines on the potential argument for or against the use of a censure against a board member that is potentially acting well outside of their fiduciary duties and making false and inflammatory public statements in the community.

Davis Stirling offers the following guidelines:

Purpose of Censure. A censure is a reprimand of a director. Conduct worthy of censure may include but is not limited to:

disruption of meetings (shouting, use of profanity, engaging in personal attacks against fellow directors, etc.)

breach of confidences

interference with association operations

breach of fiduciary duties

improper behavior toward association vendors or employees undisclosed conflicts of interest

Is there anything specific to NC law?
SheliaH (Indiana)
Posts: 6,964
Posted:
If you want specifics on your state law, it's best to consult the association attorney.

If there isn't anything in North Carolina (or anywhere else), I see no reason why the board couldn't enact a resolution regarding unacceptable conduct and provide a procedure for censure. You could even consider proposing an update to your bylaws to address this and that could provide more teeth. A bylaw amendment will probably require a homeowner vote.

Unless you update the bylaws accordingly, a censure won't include booting the person off the board - usually, the homeowners have to either recall the board member or simply vote him/her out in the next election. If the person is an officer and the board appoints officers among themselves, they could remove that person from the position. The association attorney can help you draft language for your resolution and perhaps look into what would be the best approach if you want to go through the process of amending the bylaws.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
RichardP13 (California)
Posts: 3,868
Posted:
JM16

What you posted IS NOT part of the Davis Stirling Act or Civil Code for California, it is an attorney of a law firm practicing in California opinion. Based on that, you should conduct an attorney in North Carolina or the association's counsel for guidance.
JM16 (North Carolina)
Posts: 24
Posted:
Thanks to both of you for your advice!
TimB4 (Tennessee)
Posts: 21,059
Posted:
Quote:
Posted By JM16 on 01/23/2017 2:48 PM
Looking for some guidelines on the potential argument for or against the use of a censure against a board member that is potentially acting well outside of their fiduciary duties and making false and inflammatory public statements in the community.

I personally think censures are a waste of paper within an HOA setting.
Censuring politicians provide political banter for the reelection campaign, but actually does nothing more then telling the individual (in writing) they shouldn't have done something.

If an individual is overstepping their authority, telling them not to do it may or may not fix the issue.
Removing them from the authoritative position will fix the issue.

Boards appoint Officers and may remove Officers.

If, as is typical, the Officer position is filled by a director, that individual will still remain a Director but will no longer hold the office in question.

Of course, to remove an Officer you must have someone willing to take on those duties.
If you do not, then trying to remove is as bad as doing a censure.
JM16 (North Carolina)
Posts: 24
Posted:
Normally I would agree, but we're trying to make sure that if we're sued for this members actions (including defamation), we can show that we did everything possible to show we attempted to defuse the situation short of an official recall or going to court for removal.

TimB4 (Tennessee)
Posts: 21,059
Posted:
Quote:
Posted By JM16 on 01/23/2017 4:10 PM
Normally I would agree, but we're trying to make sure that if we're sued for this members actions (including defamation), we can show that we did everything possible to show we attempted to defuse the situation short of an official recall or going to court for removal.

removing him from Office would be a better action then (in my opinion)
LarryB13 (Arizona)
Posts: 4,099
Posted:
Quote:
Posted By JM16 on 01/23/2017 4:10 PM
Normally I would agree, but we're trying to make sure that if we're sued for this members actions (including defamation), we can show that we did everything possible to show we attempted to defuse the situation short of an official recall or going to court for removal.


You cannot prevent someone from suing you but the association and/or the BOD is not liable for the acts of an individual rogue director.

Since you identified this person as a board member but not as an officer there is no board endorsement of his activities and therefore no liability.
JanetB2 (Colorado)
Posts: 4,219
Posted:
Quote:
Posted By JM16 on 01/23/2017 2:48 PM

Is there anything specific to NC law?


High probability the answer is No. If you want to check for yourself here is a starting point:

http://www.ncga.state.nc.us/gascripts/Statutes/StatutesTOC.pl?Chapter=0047F

As Tim noted if the BOD member is an Officer the other BOD members can remove from that position, but not as a BOD Member. If he does not have an Officer position that potentially protects the other Officers. Keep in mind the Members elected this individual to the BOD, so your options are limited. However, if he ends up making a big enough fool of himself he could end up recalled or not elected in the future by the members who elected him in the first place. As Larry noted you and others are not responsible for another individuals personal actions ... the membership who elected is more responsible.

Sometimes it is better to sit back and let a fool make a fool of them self and which they pay for later. Making an issue of it possibly could just be playing into his agenda and hurt the rest of the BOD. If members complain ... put it back on them and their responsibilities.

TimB4 (Tennessee)
Posts: 21,059
Posted:
Quote:
Posted By JanetB2 on 01/23/2017 6:12 PM

Sometimes it is better to sit back and let a fool make a fool of them self and which they pay for later.

You don't go into what the issue is.

I would like to add to Janets and Larrys comments.

I agree that the Board is not responsible for the actions of one except in a few cases.
However, sometimes you may need to specify that in writing to the individuals in receipt of those actions.

Examples:

Director signs a contract with a contractor.
Worst case, the Board may have to honor that contract or pay to break it because the contractor would have been dealing in good faith and would have expected that the individual had the authority to act for the Board. In these instances, the Board should then take action to collect the cost of breaking the contract from the individual who exceeded their authority. Of course, that's only if the contractor doesn't listen to reason and just agrees to break the contract. This will likely depend on how the Board approaches the contractor.

Director does something to a member
Often a simple letter from the President (or the VP, if the individual is the President) specifying that the individual acted without authority of the Board. That the Board apologizes for any perception that the action came from the Board and then specify how the member should proceed (if necessary) to address the issue.

JM16 (North Carolina)
Posts: 24
Posted:
Thanks all, the advice is being taken to heart. I'm hesitant to provide further details to avoid any accidental identification of the individual.

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