explanation of By-Laws Article

Started by AndrewN • 12 replies • 1357 views

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AndrewN (Pennsylvania)
Posts: 3

Posted:

Hello:

I live in a Homeowners Association and was a Board member for six years, last serving two years ago. So I am somewhat knowledgeable with how HOA’s work. However, I would appreciate some help in the explanation of a section of our association’s By-Laws. I’ve researched online, but could not find an actual explanation of the language. It seems to be standard language for HOA By-Laws as far as I can tell.

It is the By-Law Article "Powers and Duties of the Board of Directors" specifically under the section Powers:

"The Board of Directors shall have power to:

(c) exercise for the Association all powers, duties and authority vested in or delegated to this Association and not reserved to the membership by other provisions of these By-laws, Articles of Incorporation, or the Declaration;"

We also have a By-Law Article "Board of Directors: Selection and Term of Office" specifically under the section Number:

"The affairs of this Association shall be managed by a Board of no less than five (5) and no more than seven (7) directors, who must be members in good standing of the Association."

Here is the situation. Our present Board consists of seven members and they recently decided to limit the number of directors to only five, starting next year. Our elections are in November, and there would have been three available positions if the allowable maximum number was seven. But since the Board decided to make the number of members to be only five, there will only be one available position.

I questioned the Board about this reduction, and they responded, quoting the above Powers section as their authority. They said that section gave the Board of Directors the power to determine the number of Board members unless determining the number of Board members is specifically granted to the membership by other provisions of the documents. There is no other provision granting this authority to the membership. Therefore the Board had the right to designate the Board to be 5 members.

Can anyone explain the Powers section and if it really does give the Board the authority to limit the number of Board members? It doesn’t make sense to me that one section of the By-Laws would allow the Board to decide something contrary to another section. In my view, to be in accordance with the By-Laws, the number of members can be 5, 6 or 7, but the Board has decided on 5 only.

Thanks for reading and any help would be appreciated.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By AndrewN on 08/28/2017 6:22 PM
Hello:

I live in a Homeowners Association and was a Board member for six years, last serving two years ago. So I am somewhat knowledgeable with how HOA’s work. However, I would appreciate some help in the explanation of a section of our association’s By-Laws. I’ve researched online, but could not find an actual explanation of the language. It seems to be standard language for HOA By-Laws as far as I can tell.

It is the By-Law Article "Powers and Duties of the Board of Directors" specifically under the section Powers:

"The Board of Directors shall have power to:

(c) exercise for the Association all powers, duties and authority vested in or delegated to this Association and not reserved to the membership by other provisions of these By-laws, Articles of Incorporation, or the Declaration;"

This is general language in most Bylaws

We also have a By-Law Article "Board of Directors: Selection and Term of Office" specifically under the section Number:

"The affairs of this Association shall be managed by a Board of no less than five (5) and no more than seven (7) directors, who must be members in good standing of the Association."

Question: Does your declaration (CCR's) mention how many Board Members the HOA is to have?

Here is the situation. Our present Board consists of seven members and they recently decided to limit the number of directors to only five, starting next year. Our elections are in November, and there would have been three available positions if the allowable maximum number was seven. But since the Board decided to make the number of members to be only five, there will only be one available position.

I questioned the Board about this reduction, and they responded, quoting the above Powers section as their authority. They said that section gave the Board of Directors the power to determine the number of Board members unless determining the number of Board members is specifically granted to the membership by other provisions of the documents. There is no other provision granting this authority to the membership. Therefore the Board had the right to designate the Board to be 5 members.

Is it possible ... potentially yes ... unless CCR's dictate otherwise. However, I personally have not known an HOA to reduce via next election. The ones I have known have had BOD members resign and did not fill the positions (i.e. Had originally 7 and two resigned). Then a year or two later chose to only fill the current 5 positions. This also was because only had 5 individuals step up to the plate to run for office at next annual election.

Can anyone explain the Powers section and if it really does give the Board the authority to limit the number of Board members? It doesn’t make sense to me that one section of the By-Laws would allow the Board to decide something contrary to another section. In my view, to be in accordance with the By-Laws, the number of members can be 5, 6 or 7, but the Board has decided on 5 only.

One section is not contrary to the other with what you posted. Both essentially describe powers and duties while only one states the minimum and maximum number of directors.

Thanks for reading and any help would be appreciated.

BTW ... Welcome to the Forum

JohnC46 (South Carolina)
Posts: 14,265

Posted:

In the HOA's I have been familiar with the BOD decided on its size as long as that size fell within the Bylaws. Ours call for a BOD of 3 to 7.

RichardP13 (California)
Posts: 3,868

Posted:

Below is from my former HOA which was restated in 2010. In this instance, thee members determine the number of Board members based on the number of candidiaes submitting nomination forms. In the OP's instance, the Board decides the number of the Board.

Section 4.1 - Number, Qualifications, Term of Office.
(a) Number. The affairs of the Association shall be managed by a Board of Directors comprised of either five (5) persons or seven
(7) persons as determined in subsection (b), below. Except as set forth below in subsection (b), the number of directors may be increased or decreased from
time to time by an amendment to these Bylaws.

(b) Determination of Number of Directors. At least sixty (60) days before the date of the meeting at which the ballots for the election of directors are to be counted, the Association shall mail to each Owner a candidate nomination form. The candidate nomination form shall contain the following statement:

“All candidates who meet the qualifications to serve on the Board of Directors and, if appropriate, have confirmed their willingness to run for election to the Board of Directors, shall be listed on the secret ballot if their candidate nomination form is received by the date stated on the form. If there are less than seven (7) candidates who are qualified and consent to nomination, the secret ballot shall state that the Members shall elect five (5) directors. If there are seven (7) or more candidates who are qualified and consent to nomination, the secret ballot shall state that the Members shall elect seven (7) directors.”

The candidate nomination form must be returned to the Association at the address provided on, and by the deadline stated on, such form, which deadline
must be at least forty-five (45) days before the date the ballots for the election of directors are scheduled to be counted. Owners may nominate themselves or another person; provided, however, all candidates must meet the qualifications set forth in Section 4.1(c), below. Any candidate nominated by another person will be contacted to confirm that such candidate consents to having his or her name placed in nomination for election to the Board. At the close of
nominations, the inspectors of election shall determine the number of candidates who meet the qualifications to serve on the Board of Directors and,
if appropriate, have confirmed their willingness to run for election to the Board of Directors. If there are less than seven (7) candidates who are qualified and consent to nomination, the inspectors of election shall cause the secret ballot for election of directors to state that the Members shall elect five (5) directors. If there are seven (7) or more candidates who are qualified and consent to nomination, the inspectors of election shall cause the secret ballot to state that the Members shall elect seven (7) directors.

SueW6 (Michigan)
Posts: 814

Posted:

Interesting question: the bylaws state that the board is comprised of 5 to 7 persons. It has had the 7 members.

The board has decided now to fill only one of the three positions available, making it a 5 member board.

I think the Board may be right. If it wanted to reduce or increase the board outside of the 5 to 7, it would have needed an amendment. But it is staying within its own parameters and meeting its minimum.

I think it is in their power to do what they have planned.

(If the homeowners are so upset, submit a bylaw amendment that locks in that minimum 7 number.)

AndrewN (Pennsylvania)
Posts: 3

Posted:

Thank you for another opinion. Although we have 235 units, during the eleven years I've lived here, the resident apathy is very high. There was even a year while I was serving that we only had three Board members, and we could not get anyone else to volunteer. It's only in the past several years that we are having more residents getting involved, and I fear that this reduction will stop this involvement and is a move backwards. I was planning on submitting my candidacy again and I recruited another very qualified resident, but now that there is only one position available, I don't know what's going to happen.

The situation is not serious enough to warrant an amendment to the By-Laws. In fact, we just went through a revision of our governing documents, which coincidentally involved reducing the number of positions. It was originally supposed to range from 7 to 9, which was impossible to reach, so we decided to lower it to 5 to 7. Now the Board, specifically the current president, wants to lower it even more. I still believe he is overstepping his authority with this reduction.

I'm glad I found this discussion board and I enjoy reading through other association's questions and issues.

JanetB2 (Colorado)
Posts: 4,219

Posted:

What I would question and watch out for if you have residents willing to serve ... is why reduce the number??? Generally reductions are made due to apathy. You have a fairly large HOA with people stepping up to serve at this time ... so why now reduce the number of BOD members? Sorry ... something does not quite compute ...

Is there any potential issue coming up in the future you are aware of???

GuyM1 (Ohio)
Posts: 318

Posted:

This would bother me that right after changing it to 5 to 7 from 7 to 9 they want to drop it to 5... Sounds like a board that may want less resistance in their future plan. Have you talked to the people leaving the board about their thoughts on this? IMO The Board shouldn't be the one to lower the board number to 5 it should take the collective of the Association to do that...but that is my opinion. Smaller board more control. You may need to get people together and have a meeting on the subject to vote to change it to just 7 and have it amended. Bigger board more fairness!

GenoS (Florida)
Posts: 4,276

Posted:

Quote:

Posted By GuyM1 on 10/15/2017 2:13 PM
IMO The Board shouldn't be the one to lower the board number to 5 it should take the collective of the Association to do that...but that is my opinion. Smaller board more control. You may need to get people together and have a meeting on the subject to vote to change it to just 7 and have it amended. Bigger board more fairness!

Actually it's pretty common for the Bylaws or the Articles of Association to specify the number of directors as a range and for the board to choose how many directors there will be for the upcoming year within that range.

AndrewN (Pennsylvania)
Posts: 3

Posted:

I believe the Board President reduced the number so that he can have more power and less opposition within the Board. Right now with seven members, there are only two that are not totally in the President’s pocket and under his absolute influence. One of the two is up for re-election this year and the other has one more year left. The other four members will go along and vote for whatever the President says.

The election ballots just came out and there are three people going for the now one position. Two are current members, one under the President’s influence and the other not. There is also another new resident who put his name in the hat. I chose not to put in my candidacy.

The election will be at our annual meeting November 14, and I can guarantee that the one under the President’s influence will be re-elected. They will probably go door to door and gather proxies for votes for their person. They may have done so already. I plan on visiting my immediate neighbors and get their votes for someone else, but it really won’t matter. The President and his cronies are just nuts and too powerful over the otherwise non-caring residents.

GuyM1 asked if I talked to the members leaving. I can say that these Board members would not give me the time of day if I asked about this reduction in positions. The only response I got from the Board was I am sure a copy and paste by the management company of the President’s words, saying to the effect he can do whatever he wants. I do plan to ask a question at the annual meeting about this reduction, and I am sure I will be given the same explanation.

I feel totally helpless and I realize that by next year, the other non-influenced Board member will be out also. And then the President will have all his members. It is really unbelievable what he has done. All because he is power hungry and wants to do everything his way.

KerryL1 (California)
Posts: 14,550

Posted:

You know, Andrew? If you only campaign with a few neighbors and you & others won't gather proxies, you will certainly get this guy to remain all powerful.

It takes solid, well-planned joint action by the opposition to change the compassion of the board. And....apparently most of your neighbors aren't willing to put in any effort. The result are predictable.

(Ye, I tend to agree he wants a Board of 5 to have fewer oppose him. But only the Board can vote to reduce it to five. He can't do that by his voice alone)

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By AndrewN on 10/16/2017 12:47 PM
I believe the Board President reduced the number so that he can have more power and less opposition within the Board. Right now with seven members, there are only two that are not totally in the President’s pocket and under his absolute influence. One of the two is up for re-election this year and the other has one more year left. The other four members will go along and vote for whatever the President says.

The election ballots just came out and there are three people going for the now one position. Two are current members, one under the President’s influence and the other not. There is also another new resident who put his name in the hat. I chose not to put in my candidacy.

The election will be at our annual meeting November 14, and I can guarantee that the one under the President’s influence will be re-elected. They will probably go door to door and gather proxies for votes for their person. They may have done so already. I plan on visiting my immediate neighbors and get their votes for someone else, but it really won’t matter. The President and his cronies are just nuts and too powerful over the otherwise non-caring residents.

GuyM1 asked if I talked to the members leaving. I can say that these Board members would not give me the time of day if I asked about this reduction in positions. The only response I got from the Board was I am sure a copy and paste by the management company of the President’s words, saying to the effect he can do whatever he wants. I do plan to ask a question at the annual meeting about this reduction, and I am sure I will be given the same explanation.

I feel totally helpless and I realize that by next year, the other non-influenced Board member will be out also. And then the President will have all his members. It is really unbelievable what he has done. All because he is power hungry and wants to do everything his way.

Sometimes it comes down to being smarter than the foxes in their den. Yep ... after they go door to door and gather proxies you and your group can follow behind ... present your case ... and see if the owner will give you an UPDATED proxie with a more current date. Which would make any prior proxy "null and void". Just because someone gave a proxy does not negate that they may have changed their mind.

Along with obtaining proxies I would also solicit owner's signing a petition noting that the current BOD members shall remain at the current level of X number vs the board changing to a lower number of Y members. If you get the majority of owners to agree to the higher BOD member number and present at the meeting ... the HOA could face potential legal litigation regarding the upcoming election.

GenoS (Florida)
Posts: 4,276

Posted:

My HOA is reducing the board size from 7 to 5 for next year. Our Bylaws say the board shall consist of not less than 3 active members of the association and we've usually tried to have 7. Every year we lose 2, however, and always seem to end up with 5. The change will make life easier for our candidate-search committee. If 3 board members are carryovers then we'd have to find 4 new members willing to serve as directors. With a reduction to 5 we only need 2. IF there's an unusual amount of interest from prospective board candidates then we'd probably keep the number at 7.

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