Board Expasion

TampaI (Florida)
Posts: 6

Posted:

Here is a little blurb from our by-laws.

"The number of Directors on the first Board of Directors of the Association (''First Board'') and the ''Initial Elected Board'' (as hereinafter defined) shall be three (3). The number of Directors elected by the Members subsequent to the ''Declarant's Resignation Event'' (as hereinafter defined) shall be an odd number of no more than seven (7). The Board shall determine the number of Directors to comprise the Board from time to time. Except for Declarant appointed Directors, Directors must be Members or the parents, children or spouses of members, officers or directors of Members. There shall be only one (1) vote for each Director . "

The developer recently transferred control to the residents and we elected 3 board members(president, VP and treasurer).

Board now wants to expand to 7.

The Q: Is a special election needed or can the existing board expand without residents approval?

I have read the bylaws and no-where it prohibits board from expansion but also doesn't clearly state board has the power to expand.

Your thoughts?

MarkM19 (Texas)
Posts: 1,459

Posted:

I think we need some general information about your HOA.

Home many Homes or Condos?

Do you have enough active support for 7 members?

More board members means more opinions so are you ready for that?

Most communities have trouble filling seats on board. Careful to not create trouble for future boards.

TampaI (Florida)
Posts: 6

Posted:

Quote:

Posted By MarkM19 on 07/06/2018 11:30 AM
I think we need some general information about your HOA.

Home many Homes or Condos?

Do you have enough active support for 7 members?

More board members means more opinions so are you ready for that?

Most communities have trouble filling seats on board. Careful to not create trouble for future boards.

We have about 240 homes - single family homes.

We have support to expand it to 5 but 7 is the max and have strong interests from residents(who were earlier on the ballot but couldn't get on the board)

I looked at bylaws and didn't find any verbiage which was for or against board expansion.

Can someone post what that verbiage might look like?

RichardP13 (California)
Posts: 3,868

Posted:

It is great to have 7 Board members. The officer positions are President, VP, Secretary, and Treasurer. That's four. What are the other three going to do.

Before just expanding, think what the roles of each Director are going to be.

Too many chiefs and not enough Indians, is never a good thing.

Build a community through a couple of good committees. They can also hold checks and balances over a Board.

TampaI (Florida)
Posts: 6

Posted:

Quote:

Posted By RichardP13 on 07/06/2018 11:57 AM
It is great to have 7 Board members. The officer positions are President, VP, Secretary, and Treasurer. That's four. What are the other three going to do.

Before just expanding, think what the roles of each Director are going to be.

Too many chiefs and not enough Indians, is never a good thing.

Build a community through a couple of good committees. They can also hold checks and balances over a Board.

I appreciate your concern but we are deviating from the original topic.

Does board need a special election or does the board have powers to nominate few residents to get on the board?

RichardP13 (California)
Posts: 3,868

Posted:

The Board can expand, but the Members should make the decision to who fills the spots. No special election is required. Hold it at your annual election.

GeorgeS21 (Florida)
Posts: 3,808

Posted:

Typically, the developer passes the small number, via the Bylaws, to the First Board.

The Bylaws allow the First Board to modify the Bylaws without membership involvement.

The First Board can then change the number of directors to whatever number they like by modifying the Bylaws with only Board approval.

The First Board could also take the new Bylaws to full membership (I wouldn't).

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By GeorgeS21 on 07/06/2018 12:47 PM
The First Board can then change the number of directors to whatever number they like by modifying the Bylaws with only Board approval.

Exactly, where does it say that?

GeorgeS21 (Florida)
Posts: 3,808

Posted:

My last two HOAs have been turned over from two different developers ...each Bylaws had language allowing Board to amend Bylaws. Neither had language saying it could be done only once.

One Board modified the Bylaws, voted for them, changing several things, including the number of directors, and left the language allowing Boards to modify.

The other Board modified the Bylaws, took them to the membership for approval - the usual hard time getting enough votes. Finally got done.

CathyA3 (Ohio)
Posts: 6,299

Posted:

In my COA, the number of board positions is spelled out in the Declaration, with no language saying that the board can change this, which means an amendment would be necessary. Homeowners would have to vote to approve.

GeorgeS21 (Florida)
Posts: 3,808

Posted:

Wow - putting the number of governance directors in the CCRs is pretty cruel.

Question is .... since this is a governance issue, is it legal?

KerryL1 (California)
Posts: 14,550

Posted:

The # of directors seems weird to be in the CC&Rs.

Our bylaws say 5 to start, can be raised to 7 via board vote, which did happened a decade ago. But there's no way to bring it back to five, we'd have to go to three. Weirder?

JenniferG11 (Texas)
Posts: 667

Posted:

Quote:

Posted By TampaI on 07/06/2018 11:00 AM
Here is a little blurb from our by-laws.

"The number of Directors on the first Board of Directors of the Association (''First Board'') and the ''Initial Elected Board'' (as hereinafter defined) shall be three (3). The number of Directors elected by the Members subsequent to the ''Declarant's Resignation Event'' (as hereinafter defined) shall be an odd number of no more than seven (7). The Board shall determine the number of Directors to comprise the Board from time to time. Except for Declarant appointed Directors, Directors must be Members or the parents, children or spouses of members, officers or directors of Members. There shall be only one (1) vote for each Director . "

The developer recently transferred control to the residents and we elected 3 board members(president, VP and treasurer).

Board now wants to expand to 7.

The Q: Is a special election needed or can the existing board expand without residents approval?

I have read the bylaws and no-where it prohibits board from expansion but also doesn't clearly state board has the power to expand.

Your thoughts?

The board does have the power to expand. From what you quoted above:

"The Board shall determine the number of Directors to comprise the Board from time to time."

Personally I don't like the verbiage. It doesn't make clear how or when they may do so. Without seeing anything else from your docs, yes I would say there has to be a special meeting/election if they want to expand. The power to choose *who the directors are* is up to the owners, not for them to hand pick who they want. Or they could pass a motion to expand, with the expansion to take place at the next regularly scheduled election, but it seems like they want to expand now. Perhaps they have discovered that 3 is not enough for the workload.

As to the homeowners who had not been able to get elected before, I can see why this would be attractive to them. Another chance to get on the board. I agree with the poster who said 7 is too many for your association. I think it is too many for ours, with a higher workload. Unfortunately, your by-laws leave that up to the board.

GenoS (Florida)
Posts: 4,276

Posted:

Quote:

Posted By TampaI on 07/06/2018 11:39 AM

I looked at bylaws and didn't find any verbiage which was for or against board expansion.

Can someone post what that verbiage might look like?

First of all we nominally have a board of 7. Many of us have thought long and hard about a good number and we feel that for our 100 home HOA a board of 5 is probably best. However, every year we lose a couple of directors due to attrition (they move, they die, they have health problems, they get aggravated and quit, they get sick of the drama and quit, etc.).

Since 1988 our Articles of Incorporation have said, "The board shall consist of not fewer than 3 directors." 3 is the state minimum. In the intervening years there have been boards of 4, 7, 5, 9, back to 7, and so forth. There is nothing in the Articles or the Bylaws that provides a specific procedure by which the number of board seats may be changed.

I've read that, in the condo statute, where no clear method for changing the size of the board is spelled out in the governing documents, that the number shall be 5.

Some places require the exact number to be in the Bylaws. Others give the sitting board the power to change it for the next year. It really depends on your documents. If your documents are otherwise silent, as mine are, then the Bylaws should probably be amended and until that happens you have to play it by ear. Go with 5 to be safe and, of course, ask an attorney for legal advice.

JenniferG11 (Texas)
Posts: 667

Posted:

Quote:

Posted By GenoS on 07/06/2018 11:52 PM

Posted By TampaI on 07/06/2018 11:39 AM

I looked at bylaws and didn't find any verbiage which was for or against board expansion.

Can someone post what that verbiage might look like?

First of all we nominally have a board of 7. Many of us have thought long and hard about a good number and we feel that for our 100 home HOA a board of 5 is probably best. However, every year we lose a couple of directors due to attrition (they move, they die, they have health problems, they get aggravated and quit, they get sick of the drama and quit, etc.).

Since 1988 our Articles of Incorporation have said, "The board shall consist of not fewer than 3 directors." 3 is the state minimum. In the intervening years there have been boards of 4, 7, 5, 9, back to 7, and so forth. There is nothing in the Articles or the Bylaws that provides a specific procedure by which the number of board seats may be changed.

I've read that, in the condo statute, where no clear method for changing the size of the board is spelled out in the governing documents, that the number shall be 5.

Some places require the exact number to be in the Bylaws. Others give the sitting board the power to change it for the next year. It really depends on your documents. If your documents are otherwise silent, as mine are, then the Bylaws should probably be amended and until that happens you have to play it by ear. Go with 5 to be safe and, of course, ask an attorney for legal advice.

How were ties broken when you had an even number of board members?

GenoS (Florida)
Posts: 4,276

Posted:

Quote:

Posted By JenniferG11 on 07/06/2018 11:56 PM
How were ties broken when you had an even number of board members?

In 25 years there have only ever been maybe a dozen tie votes at board meetings. When it happens, a tie is the same as the motion getting voted down. Without a majority in favor, it fails. We had 7 directors at the end of January last year (2017). By March we were down to 4 and managed to survive to the end of the year. There were no tie votes of any consequence last year. We had another homeowner lined up to accept a board appointment if one of the remaining 4 resigned during the year, but he just stayed waiting in the wings for a call that never came.

If you thought my HOA was borderline dysfunctional you wouldn't be wrong.

JenniferG11 (Texas)
Posts: 667

Posted:

Quote:

Posted By GenoS on 07/07/2018 12:07 AM

Posted By JenniferG11 on 07/06/2018 11:56 PM
How were ties broken when you had an even number of board members?

In 25 years there have only ever been maybe a dozen tie votes at board meetings. When it happens, a tie is the same as the motion getting voted down. Without a majority in favor, it fails. We had 7 directors at the end of January last year (2017). By March we were down to 4 and managed to survive to the end of the year. There were no tie votes of any consequence last year. We had another homeowner lined up to accept a board appointment if one of the remaining 4 resigned during the year, but he just stayed waiting in the wings for a call that never came.

If you thought my HOA was borderline dysfunctional you wouldn't be wrong.

I think I am finding out that dysfunctional is the norm. If you don't have high drama, maybe count yourself lucky. :-)

That is horrible about the tie. The no's have their way. We're trying to figure out the best language to allow 5 OR 7 board members, but not 6.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By TampaI on 07/06/2018 11:00 AM
Here is a little blurb from our by-laws.

"The number of Directors on the first Board of Directors of the Association (''First Board'') and the ''Initial Elected Board'' (as hereinafter defined) shall be three (3). The number of Directors elected by the Members subsequent to the ''Declarant's Resignation Event'' (as hereinafter defined) shall be an odd number of no more than seven (7). The Board shall determine the number of Directors to comprise the Board from time to time. Except for Declarant appointed Directors, Directors must be Members or the parents, children or spouses of members, officers or directors of Members. There shall be only one (1) vote for each Director . "

The developer recently transferred control to the residents and we elected 3 board members(president, VP and treasurer).

Board now wants to expand to 7.

The Q: Is a special election needed or can the existing board expand without residents approval?

I have read the bylaws and no-where it prohibits board from expansion but also doesn't clearly state board has the power to expand.

Your thoughts?

I would contend the BOD can “initially” expand to more BOD members just by appointing. However, in the future they would need to be elected at the next Annual Meeting!!! QUESTION: Why does the BOD want 7 vs the next level of 5 BOD Members? Keep in mind in the future you will potentially have “apathy” and have a hard time filling a larger number of positions. With your current number of homeowner’s potentially 5 would be a good number.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

I would contend the BOD can expand to more BOD members just by appointing. Appoint them with their term to expire at the next Annual Meeting, thus an election for at least those seats if not more will be held.

GenoS (Florida)
Posts: 4,276

Posted:

Quote:

Posted By JenniferG11 on 07/07/2018 12:29 AM
That is horrible about the tie. The no's have their way. We're trying to figure out the best language to allow 5 OR 7 board members, but not 6.

The thing is, when you think you've got a good solution on paper, something will come along and mess it up. We used to struggle with implementing staggered terms for directors. It ended up being more trouble than it was worth because all it takes is a couple of resignations and the staggered terms go out the window because seats filled due to a vacancy only last until the next Annual Meeting. 2-year terms become 1-year terms and, along with the other terms set to expire, all of a sudden you've got 1 carryover board member and 6 seats up for election. That's the situation we'll have next year here.

We could do a "reset election" to re-stagger the terms but in all honesty that would be more trouble than it's worth. Apathy reigns supreme.

KerryL1 (California)
Posts: 14,550

Posted:

We had a binge of resignations several years ago and our HOA counsel recommended that at the next election --6 or 7 seats were up--to give the top 4 a 2-year term (per our Bylaws) and the next two, one-year terms. This got us back on staggered terms also required by our Bylaws.

When we expanded to 7 in Aug. of one year, we had to let those two serve till Oct. of the next year per our bylaws, when we hold our annual meeting. As permitted in our bylaws, the board appointed these two and one was an awful dud whom we were stuck with for 15 months! He then sold his unit.

This seems like a topic with a lot of variation among HOAs and anyone interested should carefully read their bylaws. Remember to NOT confuse officers with directors.

GenoS (Florida)
Posts: 4,276

Posted:

Staggered terms were implemented here 18 years ago on a whim. Someone had the idea to do something similar to what Kerry's association did. There's nothing in our bylaws that talks about staggered terms, though. "It seemed like a good idea at the time," is the best explanation I ever got. So when we don't try to set up staggered terms again in the near future, my response is, "the Bylaws don't require staggered terms".

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Staggered terms are good. It maintains some corporate memory and allows on the job training. I say jiggle if you must with the amount of votes controlling. Largest vote getter, longest term. Least vote getter, shortest term.

GenoS (Florida)
Posts: 4,276

Posted:

Quote:

Posted By JohnC46 on 07/07/2018 3:02 PM
Staggered terms are good. It maintains some corporate memory and allows on the job training. I say jiggle if you must with the amount of votes controlling. Largest vote getter, longest term. Least vote getter, shortest term.

They are a good idea for the reasons you mention and more. We haven't had an election since 2014 because each year there are fewer candidates than vacancies to fill. Anyone willing to be on the board gets on. I suppose we could flip a coin to determing which seats are 2-year terms and which are 1-year terms.

I'd be in favor of labelling the board seats, Seat A, Seat B, Seat C, Seat D, etc. and describe terms and vacancy replacements using those designations. I brought up the idea a couple of years ago and it didn't get too many supporters.

JenniferG11 (Texas)
Posts: 667

Posted:

Quote:

Posted By JohnC46 on 07/07/2018 7:55 AM
I would contend the BOD can expand to more BOD members just by appointing. Appoint them with their term to expire at the next Annual Meeting, thus an election for at least those seats if not more will be held.

Based on what? Certainly not the portion of the by-laws that was quoted above. It clearly states the membership will elect the directors.

GeorgeR8 (Arizona)
Posts: 182

Posted:

Maybe state law? Ours covers appointing directors. They also finish the term of the person they replace.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By JenniferG11 on 07/08/2018 12:10 AM

Posted By JohnC46 on 07/07/2018 7:55 AM
I would contend the BOD can expand to more BOD members just by appointing. Appoint them with their term to expire at the next Annual Meeting, thus an election for at least those seats if not more will be held.

Based on what? Certainly not the portion of the by-laws that was quoted above. It clearly states the membership will elect the directors.

I say yes the BOD Members should be elected by owners but what happens in the case of a vacancy? Typically the BOD appoints thus no election. This shows it is not uncommon to have BOD Members that were not elected. Now carry that out to a BOD expansion.

JenniferG11 (Texas)
Posts: 667

Posted:

Quote:

Posted By JohnC46 on 07/08/2018 7:00 AM

Posted By JenniferG11 on 07/08/2018 12:10 AM

Posted By JohnC46 on 07/07/2018 7:55 AM
I would contend the BOD can expand to more BOD members just by appointing. Appoint them with their term to expire at the next Annual Meeting, thus an election for at least those seats if not more will be held.

Based on what? Certainly not the portion of the by-laws that was quoted above. It clearly states the membership will elect the directors.

I say yes the BOD Members should be elected by owners but what happens in the case of a vacancy? Typically the BOD appoints thus no election. This shows it is not uncommon to have BOD Members that were not elected. Now carry that out to a BOD expansion.

Nope. What was quoted from the docs doesn't support that. They can't create a vacancy to fill.

GeorgeS21 (Florida)
Posts: 3,808

Posted:

I have seen many Bylaws that allow the BoD to replace a director that had been elected ...death, resignation, etc. But, I don’t think I have seen Bylaws that allow BoD to simply appoint someone to fill a seat that was not filled at a meeting of members.

KerryL1 (California)
Posts: 14,550

Posted:

My above isn't very clear, George, but our bylaws do permit the board to appoint additions to it when it expanded from 5 to 7. I suggested that this topic may have a lot of variation among boards. In some states their business or corporations code might help.

CathyA3 (Ohio)
Posts: 6,299

Posted:

Quote:

Posted By KerryL1 on 07/06/2018 8:43 PM
The # of directors seems weird to be in the CC&Rs.

Our bylaws say 5 to start, can be raised to 7 via board vote, which did happened a decade ago. But there's no way to bring it back to five, we'd have to go to three. Weirder?

I went back and checked our Declaration. Yup, in Article III it specifies that the Board will consist of 3 directors serving staggered 3-year terms. However, it's nearly always a struggle to fill those 3 spots, so expanding the board is a moot point for us no matter how we'd have to go about it.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By JenniferG11 on 07/08/2018 7:53 AM

Posted By JohnC46 on 07/08/2018 7:00 AM

Posted By JenniferG11 on 07/08/2018 12:10 AM

Posted By JohnC46 on 07/07/2018 7:55 AM
I would contend the BOD can expand to more BOD members just by appointing. Appoint them with their term to expire at the next Annual Meeting, thus an election for at least those seats if not more will be held.

Based on what? Certainly not the portion of the by-laws that was quoted above. It clearly states the membership will elect the directors.

I say yes the BOD Members should be elected by owners but what happens in the case of a vacancy? Typically the BOD appoints thus no election. This shows it is not uncommon to have BOD Members that were not elected. Now carry that out to a BOD expansion.

Nope. What was quoted from the docs doesn't support that. They can't create a vacancy to fill.

I did not see their entire doc thus I do not know what size BOD they are allowed and how to expand it. Many docs give a range of the BOD size typically from 3 to 9 with the BOD deciding on the size. Our Docs call for 3 to 7 and we try to keep it at 5 but if one or two resign we do not always fill the vacancy especially if only for the remainder of the year and the Annual Meeting is within a few months.

BenA2 (Texas)
Posts: 1,273

Posted:

This might depend on what your governing documents say about picking directors. The bylaws clearly give the board the authority to create four more positions, so the question becomes how are directors selected? Usually, they are elected but most HOAs allow the board to appoint directors to empty positions between elections. If there is nothing stating otherwise, I don't see why the board could not create four positions and then appoint them as interim directors until the next election.

If it were me, I either wait until the next election to create the positions or have a special election.