ALL TRUSTEES HAVE RESIGNED

We are a planned community (non-profit corporation) in Ohio with 28 townhomes. Today all homeowners received a letter that all three of our Board members are resigning, effective immediately; and they will NOT be calling an election meeting or special meeting. Also says, "as soon as a duly elected Board is voted in by the Association, we will turnover all Board records and information to the new Board".

The only thing I can find in our bylaws on how to elect a new Board pertains to when officers are removed. There are people that want to be on the new Board. Not sure if we can call our own meeting and vote new officers in.

The outgoing Board has had our lawyer in their back pocket for years, so I hesitate to call him right away. Pretty sure they want to catch us making a mistake (as stated in their letter - better be "DULY elected Board").

Needing advice to try to figure this out.........

Thank you.

What a dirty thing to do. They could have resigned one at a time and let the sole remaining trustee appoint replacements for the other 2. Then the last could have resigned, leaving in place the 2 replacement directors to get things up and running.

I don't know the Ohio laws but I imagine there's some way for a percentage of homeowners to call a special members meeting where a new board could be elected. Check your governing documents as well. If they're silent about how to fill vacancies on the board then the laws of Ohio should be your starting point.

I agree with others ... was a dirty and slimey thing to do. You need to call a special meeting of the owners meeting requirements in your governing documents and State Laws. If you are incorporated as a Non-Profit here is those laws:

http://codes.ohio.gov/orc/1702

LOL ... Jerks such as your past BOD members potentially should have read their laws. One section states:

(E) (1) Subject to divisions (E)(2) and (3) of this section, a director is liable in damages for any act that the director takes or fails to take as director only if it is proved, by clear and convincing evidence, in a court with jurisdiction that the act or omission of the director was one undertaken with a deliberate intent to cause injury to the corporation or was one undertaken with a reckless disregard for the best interests of the corporation.

LOL ... all resigning at once ... was that a deliberate intent to cause injury to the HOA corporation or undertaken with a reckless disregard for the best interests of the corporation???

Now you see why many of us say it was a dirty thing to do to their fellow homeowners.

I think that's a given.

Immediately get a group of interested people to be the organizers of a special meeting to elect a new board. Attempt to dot every i and cross every t when it comes to notice of the meeting and election procedures. If the current attorney will not cooperate in advising this interim group, go out and hire a new one. If the manager is a fool and will not release funds to pay this new attorney, pay out of your pockets and apply for reimbursement later. (Hopefully you will be reimbursed.) Meanwhile, if the former board members try to mess with things, be aware that there is no such thing as a temporary resignation. My former HOA had a board member explicitly attempt such a "temporary resignation," using this in an extortionate way. The remaining board went to the attorney and said a temporary resignation has as much validity as being 'a little pregnant.' One is either on the board or off. Your HOA is presently board-less. Furthermore, as others have said, the former board members resigned in a way that has caused expensive chaos to the HOA. As needed, get an attorney to write them a letter to stand down. Make sure the manager understands his or her obligations during this interim period.

Interesting how 72% of the homeowners signed a petition to remove the board, but only a handful bothered to show up at the meeting to explain why. While I agree the ethical and professional way to behave would have been to stay on to ensure a smooth transition to the new board, part of me understands why these folks basically said: “to hell with it – they want us gone, we’ll leave and they can run the show their damn selves!”

As others have said, you and a group of like-minded homeowners should read the documents to call a special meeting to get a board seated – and I hope you consider stepping up. You need to do this immediately so the new board can sit down with the property manager to ensure the bills get paid. While you’re at it, you may want to plan to have an audit of the finances done to check for any irregularities.
Once you have a board, contact the former group and association attorney to arrange for the handover of the records – and tell them they will be expected to sit down with the new board and answer any and all questions completely and honestly. Don’t be afraid to go after the former members if you do find anything inappropriate or downright illegal.

Finally, you might also consider coming up with a formal procedure on how resignations and recalls are to be handled. Your documents may already have something, but a board resolution may be sufficient to handle details (e.g. all resignations must be done in writing and list an effective date, otherwise it takes effect immediately, all documents in the member’s possession must be turned over to the Board secretary or president within 24 hours, etc.)

PS – you say the previous board had the association attorney “in their back pocket for years”. Don’t know if you have any verifiable proof of this, but if you don’t trust the guy or lady, prepare to have a frank discussion with him/her on any concerns. As Melissa said, the attorney works for the HOA and takes direction from the board, so you can’t entirely blame him/her for doing something you don’t like. Give him/her a chance to tell their story – if trust is still an issue, you can start looking around for a new one.

The current HOA attorney may have an agreement with your HOA, spelling out how and with whom communications may be made, per hour cost, and the costs of various ancillary service. It's common for such an agreement to permit termination at any time without consequence.

When you contact the attorney, send him a copy of all documentation that you have showing that the board resigned. From the sound of things, it sounds like your new board needs a fresh start, including a new attorney. Attorneys are corruptible, and from what I have seen in the last five years or so, the attorney market is flooded with incompetents. I think this goes beyond an attorney just taking foul instructions from the board. Many attorneys are looking for ways to inappropriately add billable hours. After 'taking the temperature' of the current attorney, I would consider getting a new attorney as soon as possible. Try googling for "real estate attorneys" in your area. Interview at least three. Usually there is no charge for such an interview, unless the attorney is hired as general counsel subsequently.

Kathy

Were you one who signed the petition for the BOD removal? If yes well darling you made your bed, now sleep in it.

I believe enough have told you how to go about seating a new BOD.

1. Check your docs as to how to call a Special Meeting. Usually this requires 10-20% of all owners requesting such. Also when calling for such, the purpose of the meeting must be defined. Yours will be to Hold BOD Election to replace the resigned members.

2. Appoint somebody to chair/run the meeting.

3. Hold an election. If only 3 run, no need for an election. They become the BOD.
If two run, then no need for an election and they can appoint a 3rd.
If 4 or more run, get out the ballots. and vote for 3.

With only ?28? of you, this should not be a major project. Solicit proxies from those that cannot attend. Get those proxies signed over to you and you could control the outcome.

Thank you. We're meeting today. Appreciate your help! Have a great holiday weekend!