3 board members resign...

Started by CarolP18 • 13 replies • 726 views

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CarolP18 (Florida)
Posts: 4

Posted:

At our HOA meeting in Florida in January 2019 the President and 2 directors resigned. Now their are 4 members left on the board, which still makes a quorum. They are filling 1 seat with the next top vote count at a special meeting. My question is, can an HOA board decide to take a 7 person board down to a 5 member board without a vote of homeowners? At the 2017 AGM Meeting, the board voted and is stated in the AGM Meeting Minutes to increase our HOA board from 5 to 7. Now that 3 people have resigned, they are shrinking it without any homeowner input. Also, they are doing away with a board members seat that still has a year left on it. They are making all 5 HOA member seats on the Board now 3 year terms. I have referred back to the By-Laws and CCR's and the only thing i can find is a statement saying that at the first Annual meeting 1 member will hold a 1 year term, 1 member will hold a 2 year term and 1 member will hold a 3 year term, any members after that will be a 3 year term. And the board must consist of an odd number.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Short answer, yes.

Basically, if there are no volunteers to fill the seats, then the board works with what they have (providing a quorum exists).

CarolP18 (Florida)
Posts: 4

Posted:

That's just it, they have 2 other individuals that are interested in the remaining 2 seats from the other 2 resignations, and the board said NO we are doing away with them.

TimB4 (Tennessee)
Posts: 21,059

Posted:

well, they can't do away with the seats. However, there might not be any requirement to fill the vacancy.

What do your governing documents specify about the number required?
Is it an absolute (shall) or a range (no more than)?

TimB4 (Tennessee)
Posts: 21,059

Posted:

Per FL corporate statute (applicable if the association is incorporated (most are but check to be sure)), the board has the option of filling vacancies and not a requirement. This is why I asked about your governing documents.

617.0809 Board vacancy

CarolP18 (Florida)
Posts: 4

Posted:

The documents state, not less then 3 board members. It also states 1 member is to serve a 1 year term, 1 member is to serve a 2 year term and 1 member to serve a 3 year term, anything after that will be 3 year terms. This board is doing 5 seats at 3 year terms.

GenoS (Florida)
Posts: 4,276

Posted:

Quote:

Posted By CarolP18 on 02/11/2019 2:05 PM
And the board must consist of an odd number.

Do your Bylaws or Articles of Association say that? Ideally you want an odd number so that there are no ties, but there's nothing in the FL statutes that says there must be an odd number.

To avoid shenanigans or manipulation, your association should amend its Articles of Incorporation and/or Bylaws to specifically provide for a way to change the size of the board. We did it this year. from 7 to 5, but the change was noticed in a board meeting last Fall more than 90 days before the annual meeting where the change was made. We did this based on the minutes of a board meeting from 2007 where the size of the board was increased from 5 to 7.

Technically, if the Articles of Incorporation or Bylaws don't specify the size of the board, then by judicial precedent in Florida the number is 5. We need amendments too because if you ask 5 different people about this you'll get 5 different answers.

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By CarolP18 on 02/11/2019 3:08 PM
The documents state, not less then 3 board members. It also states 1 member is to serve a 1 year term, 1 member is to serve a 2 year term and 1 member to serve a 3 year term, anything after that will be 3 year terms. This board is doing 5 seats at 3 year terms.

The term is two years. What you are quoting is for the original start-up.

CarolP18 (Florida)
Posts: 4

Posted:

that is taken right from the by-laws

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Our docs call for a BOD of 3 to 7 members but does not specify who chooses the amount. Thus we have left it up to the BOD to decide. We like to and try to have 5 members but we can easily and have operated with as few as 3.

I think many docs are like ours.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By CarolP18 on 02/11/2019 3:08 PM

The documents state, not less then 3 board members.

Based on this and the language in the statute, I would say that the Board does not have to fill the vacancies.
They can if they want to, but do not have to.

Quote:

Posted By CarolP18 on 02/11/2019 3:08 PM

It also states 1 member is to serve a 1 year term, 1 member is to serve a 2 year term and 1 member to serve a 3 year term, anything after that will be 3 year terms. This board is doing 5 seats at 3 year terms.

Basically, this is done when the first elections are taking place. I interprete what you provided that all future terms will be for 3 years. This provides at least one director being elected each year and a majority of directors being elected every 3 years.

Example:

Director A (initial 1 year term) has elections:
Year 1, 2, 5, 8

Director B (initial 2 year term) has elections:
Year 1, 3, 6, 9

Director C through G (initial 3 year term) has elections:
Year 1, 4, 7, 10

LisaD6 (Maryland)
Posts: 77

Posted:

Have choice of filling vacancies. But at the end of the year elections happen for the empty vacancies by unit owners. They can't vanish what was voted in but can hold off on filling that year..thats how I understand it. Provided the declaration or rules says it.

DouglasK1 (Florida)
Posts: 2,046

Posted:

Quote:

Posted By CarolP18 on 02/11/2019 3:28 PM
that is taken right from the by-laws

What are the requirements to amend the bylaws? Can the board do it, or does it require a member vote?

Escaped former treasurer and director of a self managed association.

GenoS (Florida)
Posts: 4,276

Posted:

Quote:

Posted By JohnC46 on 02/11/2019 4:10 PM
Our docs call for a BOD of 3 to 7 members but does not specify who chooses the amount. Thus we have left it up to the BOD to decide. We like to and try to have 5 members but we can easily and have operated with as few as 3.

I think many docs are like ours.

Ours are sort of like that except there's no upper limit. A "minimum of 3" is all that's required. Coincidentally that's the minimum number of directors needed in Florida for any type of corporation. Led to a situation a couple of years ago when we had 9 board members for a few months, most of whom were single-issue hidden-agenda types. What a hoot.

So this is "precedent-setting arbitration decisions" and not "judicial precedent" as I wrote above.

This DBPR arbitration ruling (Case 2010-03-4040) says (on page 7),

"Arbitration cases have consistently held that, when the governing documents provide a range for the number of directors, such as “not less than x but not more than y”, the statute sets the number at five,"

... and ...

"An Association always has the power to reset the number by a properly no ticed membership meeting to amend its by-laws, provided that the number cannot be amended in the same meeting as the annual election."

Unfortunately, the Florida HOA statute says no such thing. I would expect an arbitrator in an HOA dispute before the DBPR would decide that the condo statute can reasonably be applied to an HOA (DBPR arbitrators do this all the time where the HOA statute is lacking).

Ergo, amending our Bylaws in this area is on our radar. We want to explicitly provide a way to change the size of the board from year to year that leaves no gray areas open to interpretation or speculation.

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