Board member resigning - Should we have community vote replacement?

SteveS8 (New York)
Posts: 128

Posted:

The builder gave up control of the HOA board in our community a little over a year ago. His Offering Plan By-laws had a regulation that when a board member resigned or left for whatever reason, the remaining board members would select a replacement to serve out his/her term. This allowed the builder's majority on the board to select the board member of his choice.

Now that the builder is gone and all seven board members are homeowners, a board member is resigning and the other board members want to select the replacement, but the community is asking that the By-laws be changed to allow the community to vote on a replacement since the term runs till the end of 2019.

Is that a good idea?

Steve

AugustinD
Posts: 5,144

Posted:

Quote:

Posted By SteveS8 on 04/26/2018 8:20 AM
The builder gave up control of the HOA board in our community a little over a year ago. His Offering Plan By-laws had a regulation that when a board member resigned or left for whatever reason, the remaining board members would select a replacement to serve out his/her term. This allowed the builder's majority on the board to select the board member of his choice.

Now that the builder is gone and all seven board members are homeowners, a board member is resigning and the other board members want to select the replacement, but the community is asking that the By-laws be changed to allow the community to vote on a replacement since the term runs till the end of 2019.

Is that a good idea?

Steve

The courts expect HOA Boards to follow the governing documents (a.k.a. Declaration, Bylaws, and so on). The governing documents are the only thing that keep people on the same page. Two parts of the governing documents are in play here:

-- The Bylaws state that, when a director resigns during his or her term, the Board selects replacements. Such a Bylaw happens to be common nationwide.

-- The Bylaws also have a procedure for amending the Bylaws. Typically it takes a super majority of all owners to amend. E.g. 75% or 67%. Check your Bylaws for the procedure to amend them, and report back.

I think your Board should inform the owners of these Bylaws and offer the members the chance to have a vote to amend, such that members elected replacements. Remind them of the costs of running a formal members' vote on anything. Remind them that notification requirements mean the Board will not have a full slate for several weeks at least. Alternatively, your Board could invite input at a regular board meeting about who the members would like to have as the replacement. The board could take this input 'under advisement.' But in this instance, the Board is not legally required to do what members want.

GeorgeS21 (Florida)
Posts: 3,808

Posted:

While not a clear answer, I can tell you that all communities I have been a part of had Bylaws allowing the sitting Board to replace a member for the duration of the term of the person resigning.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Steve

In most cases the BOD is allowed to name a replacement. The question then becomes how long is this appointment for?

1. Fill the remainder of the term regardless how long.

2. Fill the term only until the next BOD Election.

The answers should be in your Bylaws.

RogerB (Colorado)
Posts: 5,067

Posted:

Quote:

Posted By SteveS8 on 04/26/2018 8:20 AM
The builder gave up control of the HOA board in our community a little over a year ago. His Offering Plan By-laws had a regulation that when a board member resigned or left for whatever reason, the remaining board members would select a replacement to serve out his/her term. This allowed the builder's majority on the board to select the board member of his choice.

Now that the builder is gone and all seven board members are homeowners, a board member is resigning and the other board members want to select the replacement, but the community is asking that the By-laws be changed to allow the community to vote on a replacement since the term runs till the end of 2019.

Is that a good idea?
Steve

No that is not a good idea. There are many good reasons to not change the Bylaws to having the homeowner select a replacement.

KerryL1 (California)
Posts: 14,550

Posted:

With others, Bylaws permits the Board to select replacements. I wouldn't want to change them to give this power to Owners. Most likely that's not the only change you'd want, so time +$$. Our bylaws say these replacements serve till the next annual meeting, so the replacement would never serve for such a long time as yours, Steve.

Our Bylaws also say that the Board "may" (not "shall") appoint a replacement. And, in fact, this Board voted in March to not fill a vacancy (I opposed), but to wait till the Annual Meeting in Oct.

Your Board could be very proactive in seeking candidates and even have them give a speech and do a Q & A from Owners. There's really no hurry, is there? Unless, of course, there'd be a 2-2 tie on many votes.

What size is your HOA?

SteveS8 (New York)
Posts: 128

Posted:

We have seven board members. Whether or not it is a standard practice to have board members appoint replacements in other communities, it is a concern to the our community that the person they pick will be a member for over 1 1/2 years, and perhaps allowing the community to make the decision would be a better solution. It is understood in the By-laws that would take a 2/3rds vote, but I think the community would do that.

Someone responded here that there are problems with such a solution. I'd be interested to know what they may be. There is nothing stopping the board members from giving their blessing to one particular candidate and telling the community why, but the choice should be with the community since the time frame is long.
Steve

GeorgeS21 (Florida)
Posts: 3,808

Posted:

This seems harder than it need be ... what do the Bylaws say?

If there is no requirement to replace the resigned, then don’t ...unless the Board wants to, then follow the Bylaws.

SteveS8 (New York)
Posts: 128

Posted:

It is not a matter of whether to replace or not to replace. We will replace.
The By-laws state that the board "shall" select a replacement. My point is that the By-laws can be changed with a vote of 2/3rds of the community. The community wants to change the By-laws and can probably generate a 2/3rd vote. I was asking this forum what they thought of that idea.
Steve

TimB4 (Tennessee)
Posts: 21,059

Posted:

Steve,

We have one year terms.
The cost of notifying, making ballots and hosting a meeting (attended by 20% or membership or less) is, in my opinion, wasteful, to fill a six month vacancy or less.

Even if you have longer terms, you may still run into this issue (depending when the vacancy occurs).

Why not simply ask for volunteers and see how many are interested? We typically have to beg to get enough volunteers.

GeorgeS21 (Florida)
Posts: 3,808

Posted:

Good grief - why would you want strap future boards, when volunteers might be lean, to getting the neighborhood to fill a position on the board?

SteveS8 (New York)
Posts: 128

Posted:

The term of the resigning board member ends 1 1/2 years from now (end of 2019).

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By SteveS8 on 04/26/2018 9:12 PM
The term of the resigning board member ends 1 1/2 years from now (end of 2019).

Doesn't change the situation.
You need to look at the long term possibility vs. this single instant.

If you want the option, change the word from "shall" to "may".
This will give the board an option to fill the vacancy themselves or to bring it to the membership for a vote.

GenoS (Florida)
Posts: 4,276

Posted:

Quote:

Posted By SteveS8 on 04/26/2018 12:35 PM
We have seven board members. Whether or not it is a standard practice to have board members appoint replacements in other communities, it is a concern to the our community that the person they pick will be a member for over 1 1/2 years, and perhaps allowing the community to make the decision would be a better solution. It is understood in the By-laws that would take a 2/3rds vote, but I think the community would do that.

Someone responded here that there are problems with such a solution. I'd be interested to know what they may be. There is nothing stopping the board members from giving their blessing to one particular candidate and telling the community why, but the choice should be with the community since the time frame is long.
Steve

I disagree with just about all of this. It is very much standard practice to have remaining board members appoint/select replacements to fill vacancies. You don't HAVE to do it. Our docs also say the vacancies MAY be filled. Sometimes there are good reasons to just wait until the next election. Allowing the community to make the decision MAY be a better solution but I'm having a hard time coming up with reasons why. It sounds to me like there are personal agendas in play (not saying they're yours). If you think there's adequate interest in having enough people to fill all 7 director seats then the selected replacement, after all, is only 1 vote among 7. I wouldn't have a problem with that. Change the bylaws if you have to, no problem there either.

I'd suggest it was a bad job by the developer to not amend the bylaws right before turnover to allow the homeowners to have complete say over who's on the board of directors. When our turnover date arrived, all developer-appointed directors resigned en masse and there was a Members Meeting an hour later to elect a new board consisting only of homeowners. Are you implying that your board still has developer-appointed directors on it dating back to last year?

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By GenoS on 04/27/2018 2:05 AM

Posted By SteveS8 on 04/26/2018 12:35 PM
We have seven board members. Whether or not it is a standard practice to have board members appoint replacements in other communities, it is a concern to the our community that the person they pick will be a member for over 1 1/2 years, and perhaps allowing the community to make the decision would be a better solution. It is understood in the By-laws that would take a 2/3rds vote, but I think the community would do that.

Someone responded here that there are problems with such a solution. I'd be interested to know what they may be. There is nothing stopping the board members from giving their blessing to one particular candidate and telling the community why, but the choice should be with the community since the time frame is long.
Steve

I disagree with just about all of this. It is very much standard practice to have remaining board members appoint/select replacements to fill vacancies. You don't HAVE to do it. Our docs also say the vacancies MAY be filled. Sometimes there are good reasons to just wait until the next election. Allowing the community to make the decision MAY be a better solution but I'm having a hard time coming up with reasons why. It sounds to me like there are personal agendas in play (not saying they're yours). If you think there's adequate interest in having enough people to fill all 7 director seats then the selected replacement, after all, is only 1 vote among 7. I wouldn't have a problem with that. Change the bylaws if you have to, no problem there either.

I'd suggest it was a bad job by the developer to not amend the bylaws right before turnover to allow the homeowners to have complete say over who's on the board of directors. When our turnover date arrived, all developer-appointed directors resigned en masse and there was a Members Meeting an hour later to elect a new board consisting only of homeowners. Are you implying that your board still has developer-appointed directors on it dating back to last year?

I agree.

SteveS8 (New York)
Posts: 128

Posted:

When the builder left, there was an election and homeowners voted to fill the 4 vacant builder board seats. All seven have now been elected by homeowners. The question now is when one of these seven have to resign, do we follow the builder's By-laws and allow the board to select a replacement for a seat which will not expire until the end of 2019, or do we change the By-laws and allow the homeowners to make that decision.
Steve

GenoS (Florida)
Posts: 4,276

Posted:

Quote:

Posted By SteveS8 on 04/27/2018 6:49 PM
When the builder left, there was an election and homeowners voted to fill the 4 vacant builder board seats. All seven have now been elected by homeowners.

OK that's good.

Quote:

Posted By SteveS8 on 04/27/2018 6:49 PM
The question now is when one of these seven have to resign, do we follow the builder's By-laws and allow the board to select a replacement for a seat which will not expire until the end of 2019, or do we change the By-laws and allow the homeowners to make that decision.

Gotcha, that's clearer now.

I'd suggest amending the Bylaws to say that board-appointed directors only serve to the next annual meeting/election. Ours say that even though state law says "serve out the unexpired term" is fine as well. And I tend to agree that the owners should be able to vote for who they want in that seat ASAP.

But until you can change the Bylaws I think you just have to live with the situation. If the person selected to fill the vacancy is bonkers then they're still only 1 vote on the board and can't do a lot of damage all by his/her self.

Or you can just not fill the vacancy and the owners will decide on who fills the seat at the next annual election.

GenoS (Florida)
Posts: 4,276

Posted:

Just to add.... if you amend your Bylaws to deprive the remaining directors of the ability to select replacements in favor of an owner election you could run into trouble. Directors have been known to resign and you may find yourself short of board members to even call for and organize an election.

Think about it, you have 7 directors. 4 resign all at once (this has been known to happen). You're left with 3 directors, not enough for a majority quorum so they can't even have a meeting to discuss scheduling a homeowners' election. The homeowners can, of course, do that themselves but it's not going to happen overnight. Or maybe it can in your case. Smaller associations

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By SteveS8 on 04/27/2018 6:49 PM
When the builder left, there was an election and homeowners voted to fill the 4 vacant builder board seats. All seven have now been elected by homeowners. The question now is when one of these seven have to resign, do we follow the builder's By-laws and allow the board to select a replacement for a seat which will not expire until the end of 2019, or do we change the By-laws and allow the homeowners to make that decision.
Steve

The builders Covenant/Bylaws are yours until you change them. Typically BOD fills any BOD vacancy. The question then becomes is it filled only to the next BOD Election or until the end of term the appointee is filling.