Removal of HOA Board Member in NC

I reside in a planned community of about 1500 homes in North Carolina. I knew people who lived in the community and after talking to others in the neighborhood who had lived here for many years, thought this would be a great place to live. Unfortunately, the former president of the HOA Board moved, and a couple of Board members resigned. The current president was previously the vice president.

I would like to know the exact steps necessary to remove the president of an North Carolina HOA Board. Our bylaws state:

“Removal: Any Director may be removed from the Board of Directors, with or without cause, by a majority vote of the Members of the Association present and entitled to vote at any meeting of the Members at which a quorum of the Membership is present. In the event of death, resignation or removal, pursuant to these Bylaws, of a Director his successor shall be selected by the remaining Directors and shall serve for the unexpired term of his predecessor.”

“Quorum: The presence at the meeting of Members or proxies entitled to cast 10 percent of the votes of the Membership shall constitute a quorum for any action except as otherwise provided in the Declaration or these Bylaws. In the event business cannot be conducted at any meeting because a quorum is not present, that meeting may be adjourned to a later day the affirmative vote of a majority of those present in person or by proxy. Notwithstanding any provision to the contrary in the Declaration or these Bylaws, the quorum requirement at the next meeting shall be 50% of the quorum requirement applicable to the meeting adjourned for lack of a quorum. This provision shall continue to reduce the quorum requirement by 50% from that required at the previous meeting, as previously reduced, until such time as a quorum is present and business can be conducted. Thereafter, the quorum requirements for the next meeting shall return to its original amount.”

Below are my reasons for wanting to remove the president of the HOA Board:

The previous board signed agreements with developer #1 (developer of a planned community being built adjacent to our community) which conveyed easements for 1) a sewer needed for developer’s property and 2) a BMP for a proposed retention pond which would be built on our community’s common area for our use. This common area was a very narrow, heavily wooded parcel which included streams and wetlands, and is adjacent to multiple residents’ properties. The Board did not engage a civil engineer or other expert, nor did the attorney or property management advise one was needed.

The retention pond had initially been seen by the Board as a good idea because our community might not have had a pond to place water used for irrigation (due to litigation with developer #2 – the original developer of this community, who had not properly conveyed all land to the Association, and who is also planning to build a separate development adjacent to our community). The pond was to be fed by overflow from developer #1’s retention pond located next to our common area, and then the collected water to be fed to another retention pond to which our community had access. However, prior to the easement agreements with developer #1 being signed, the community was able to obtain permanent access to a retention pond on developer #2’s property. This was part of the litigation settlement. In exchange developer #2 was conveyed a small parcel from our community property. This annexation agreement required 80% approval from the community.

The Board did not seek nor obtain community approval for the easement agreements with developer #1. After creating a resolution (which I have not seen), the Board approved the easement agreements with developer #1. However, neither the resolution nor the easement agreements with developer #1 were ever mentioned to members in any monthly Board meetings, agendas or minutes. The resolution was never posted to the Association website (not sure if this was required; I am requesting the resolution from the property management company). Additionally, adjacent homeowners were never informed of the possibility of a retention pond being built within 15 feet of their properties. (Although the BMP easement did not include a 15 foot buffer, supposedly the agreement did.) All this was done under the direction of the previous president and the previous vice president (current president).

Six months later, without apparently either providing a plan for the retention pond or giving notice to the Board, developer #1 clear cut approximately one acre or so of the community’s common area, including the 15 foot buffer against resident’s properties. They also clear cut a swath of land on community property for the sewer easement. In the process, wetlands on the common area were destroyed. The developer also removed valuable timber. Police were called and the developer was warned to stay off our community property. A couple of weeks later the developer, once again without notice, accessed the community’s common area to remove the lumber they had placed on top of streams and wetlands. The Board subsequently placed construction fencing along the access points to enforce the cease and desist order.

Reviewing the developer’s plans, it was determined that the developer had enlarged the proposed retention pond on our community property in order to use a smaller portion of his land for his retention pond, thus gaining two or three more town homes.

The residents with backyards adjacent to the community property lost the privacy provided by the woods (as backyards are now opened to nearby commercial properties) and have had their property values damaged. The wooded common area which added value to their homes, would have provided even more value once two planned developments adjacent to our community are built over the next year.

To make matters worse, once the developer built the retention pond on his property -- a monstrosity topped by a 6-8 foot dirt berm and to be topped by a 6 foot chain link fence -- it was clear this type of retention pond cannot be allowed just a few feet from residents’ properties. This is exactly the type of retention pond that the developer plans to build on our community property (albeit smaller in circumference). Not only do realty sites caution against buying a home close to a pond, this retention pond would be a mud pit most of the time since it does not have its own water source. All of this will be noticeable from surrounding homes and will damage the property values of the affected residents, the neighborhood and eventually the entire community. Currently, the downed trees and tree trunks have been left as felled by the developer on community property - a very distressing sight which has ruined multiple holidays and vacations.

Almost half a year has gone by without any communication by the Board. Remember, the president was previously the vice president. He and the former president were the only Board members who worked with the attorney on these agreements, and the only members (I believe) who met with developer #1. We have spoken at the last 4 Board meetings to no avail. I have written two letters to the Board asking for an explanation with no response. I have tried to keep things on friendly terms because I thought that the Board (through the attorney) was negotiating with the developer to repair the common areas - and they simply needed a reminder to keep things moving along.

However, I have learned of several things that make me very concerned that the president is leaning towards letting the developer built the retention pond on the common area. The reasons for this may be: to have a backup retention pond (although the retention pond as planned by the developer would not work as it overran the 15 foot buffer – and, more importantly, we already have access to the retention pond on developer #2’s property), to cover up Board and / or attorney incompetence and/or impropriety, or to save money being spent on a lawsuit…or all of these. When I asked for assurance that the retention pond would not be built, I was told they could not discuss under advisement of the attorney. Once the annexation agreement with developer #2 was finalized, there does not seem to be a valid reason why the Board 1) did not inform developer #1 that a retention pond on our community property was no longer needed, and 2) did not take the opportunity to renegotiate the sewer easement for a larger payment (after receiving 80% community approval).

I’ve been warned by more than one resident that the president may have had an improper relationship with either or both developers #1 and #2, but I don’t see a way of obtaining proof. I do know that when the president brought over a representative of developer #1 the day after the common area was clear cut, the developer’s representative made it seem that they had every right to clear cut the property (except for the 15 foot buffer, which they would replant). The president did not rebut this statement.

The president seems to be very manipulative, and I’m petrified that he may manipulate enough Board members to see things his way, e.g., it’s more economical to let the developer build a retention pond, than to litigate. (At the moment the Board is short one member, and a special election via electronic vote is ongoing until April 19. One candidate is against the retention pond and one candidate is of the president’s choosing -- a former Board member, although not at the time of the signing of the easement agreements with developer #1. He has been used on a consulting basis to review contracts.)

Litigation against the Board is a last resort, with removal of the president a preferred solution to this disaster. May I ask someone to kindly walk me through the exact steps needed to remove the president and guidance on pitfalls to avoid. I want to ensure there are no errors on my part. I am hoping that once the president is removed, the other directors will be able to work together to bring litigation against developer #1. I also do not believe it will be difficult to meet the quorum, as I understand it to be about 77 members (a majority [51%] of 10% of 1500 homes).

Please forgive me for this long note and convoluted history. Thanks in advance!

Yes, that is the good news. However, I am hoping to obtain guidance from someone with NC experience as to the exact steps I need to take, e.g. how do I go about calling for a special meeting? Is it possible to gather signatures by walking the community or do I need to mail 1500 letters? There does not seem to be any formal guidelines for how to handle the process. Thanks for your reply and reading a very long post!

Is there anything in NC state statutes? If you're a corporation, and most HOAs are, you might get good guidance from NC corporations codes. In CA, they affect HOAs a lot concerning such matters as governing procedures.

Kelly of NC is a very knowledgeable contributor, but doesn't post regularly.

You can skim your Articles & CC&Rs, but I'd be surprised if they offer guidance.

Karen

Typically it may only take a given % of owners (say 10% of 1500 or 150 members) to call a Special Meeting with the purpose of removing a BOD Member, but it will typically take 51% of ALL OWNERS voting yes to removing a BOD Member or 751 of all members regardless of how many at the Special Meeting.

You are wanting it to be 51% of those attending. Sorry, that is not how it works.

As to how you gather 10% or more agreeing to the Special Meeting, typically you can do it in any number of ways including signed petitions.

Removing a BOD Member is very tricky and often ends up in protracted legal battle.

I keep saying typically as it can vary depending on your HOA docs.

Usually the best bet is to gather support to put others on the BOD. Others that will vote so the President is no longer an Officer in a BOD Officer Election.

My belief is you probably do not stand a snowball's chance in he!! unless you are willing to gather others(including legal advice) and work hard, hard, hard, hard at it.

Our Florida HOA Bylaws specifies 2/3 or all members voting to remove a director.

It is supposed to be hard to recall directors, not easy 🙂

Thanks for your reply - although it contained difficult news. I guess I did not correctly interpret the bylaws: I thought a director could be removed by a majority of a quorum at a special meeting - not a majority of members. I guess the statement regarding a quorum misled me. I agree that a majority of members would be very difficult - especially contacting those who have rented their homes.

Here is the NC statute:
"...Notwithstanding any provision of the declaration or bylaws to the contrary, the lot owners, by a majority vote of all persons present and entitled to vote at any meeting of the lot owners at which a quorum is present, may remove any member of the executive board with or without cause, other than a member appointed by the declarant."

Thanks again! I appreciate your remarks.

Thanks for your reply. I included the paragraphs from our bylaws in my original note - but obviously did not interpret these correctly.

Thanks again!

So do ours, but they are superseded by the 720.303 statute:
(10) RECALL OF DIRECTORS.—
(a)1. Regardless of any provision to the contrary contained in the governing documents, subject to the provisions of s. 720.307 regarding transition of association control, any member of the board of directors may be recalled and removed from office with or without cause by a majority of the total voting interests.

So then why doesn't this apply?
617.0808 Removal of directors.—
(1) Subject to subsection (2), a director may be removed from office pursuant to procedures provided in the articles of incorporation or the bylaws, which shall provide the following, and if they do not do so, shall be deemed to include the following:
(a) Any member of the board of directors may be removed from office with or without cause by:
1. Except as provided in paragraph (i), a majority of all votes of the directors, if the director was elected or appointed by the directors; or
2. A majority of all votes of the members, if the director was elected or appointed by the members.

That word "shall" is again troublesome, but I think it means that this takes precedence over your bylaws.

My understanding is that state law takes precedence over governing documents. In this case, the bylaws say something different from the statute, so the statute should be followed. Especially since that section of the statute says nothing about "Unless otherwise specifically stated in the governing documents" or other words to that effect.

Gee Karen
You don’t mention the city/county role in all this. Around here, there would have been multiple hearings to go over engineering issues, drainage, buffer zones, etc. , etc for a project of this size. There would have been a required notice to residents within 3 hundred feet of any project this size.

I find it hard to believe there is no paper trail leading back to your board and minutes to record discussion.

You sound like you want to cut off the head if the snake, but in reality you need to put a stop- work order on this project.

Thanks to everyone who has commented - I am grateful for any suggestions! I lived in a much larger planned community in South Florida for 7 years, and never had any complaints. I'm ashamed to say I also never attended Board meetings. So there may have been problems during those 7 years of which I was unaware -- just 90% of my community is unaware of this problem. Hardly anyone attends the monthly Board meetings, and I did not broadcast this issue because I was under the impression that they were working with the developer to rectify this situation, as litigation would take a long time. Right now I'm living next to all these downed trees and water -- not a pleasant thing.

I have not listed the city/county because I am concerned that someone could recognize the community if I do, and I don't want to give the Board notice of what I'm doing. I can say it's in a fast growing-formerly rural part of NC, and developers have a lot of power...

The community was never informed about either of the easements. There was no discussion with members during monthly Board meetings, there are no agendas or minutes reflecting discussion or approval of the easement agreements by the Board. The resolution was never posted to the Association's website. Furthermore, while the sewer easement to the City has been recorded with the County, the easement to developer #1 seems not to have been. I spent the day trying to locate the easement, but was unsuccessful. I'm not sure what this means.

By our governing documents and NC statute, both easements (BMP to the developer and sewer easement to the city - the latter easement for which the Association received a sum of money from the developer) required 80% community support. The only reason these easements to community property could have been conveyed without community support would have been if the Board determined that it was required for the Association. However, this argument does not hold because the Board was aware of the prior permanent easement to developer #2's retention pond.

I've attached text from our governing documents pertaining to community property - hopefully, it will upload properly

I'm in NC. Now that I correctly understand the bylaws, I think it would difficult/impossible to gather a majority since it's a large community - and only a handful of residents are aware of what happened with community property. The developer has not been in control of this community for several years (although there is declarant language in the governing documents because they have never been updated). My concern is that for whatever reason, the Board will let Developer #1 build the retention pond on community property adjacent to my home - although it will not work properly since they overran the 15 foot buffer, and more importantly, is no longer needed (if it ever was to begin with).

It's a convoluted story, but there are two developers involved. Developer #1 was given an easement by the Board (without proper community support) to community property in 2018. Developer #1 then clear cut the woods on community property adjacent to my home. Developer #2 is the original developer of this community, who is building a new development adjacent to our community, and forced by litigation (and the conveyance of a small parcel of our community property -- not located near my home) gave permanent access to our community to a retention pond on his property. The permanent access to developer #2's pond, meant that our community never needed a back up retention pond proposed by developer #1. My apologies if this is still too convoluted. It's a complicated mess.

The president is steering the Board, and an upcoming special election will decide what course the Board will take. The next election is too far away to help stop the retention pond, or to ensure the Board takes action against Developer #1.

Litigation is a last resort - although I've been advised it's feasible, I'm not interested in pursuing that path until there are no other choices.

Thanks again for your comment!

Previous in the thread ...

"Good point, Bob.

The HOA to which I referring is actually a FS 617 not for profit - a “voluntary” HOA with mandatory covenants - long story, but Florida statute certainly takes precedence over the FS 720 HOAs (most of them)."

The proposed retention pond to be constructed on our community property would have been for our community's benefit; therefore, it does not have to be built - unless the Board wants it to be. It was not paid for. The only money that changed hands was for the easement for the sewer settlement. The only reason to build a retention pond on our community property now would be to cover up incompetence or worse. The president (formerly vice president) and former president (moved away) were the only board members who worked with the attorney on the two easements, and I believe were the main contacts for developer #1 regarding the easements. These two board members and the attorney were also the people involved with the settlement with developer #2. Therefore, all these parties understood another retention pond was not needed.

Removing the president who is very manipulative would very likely remove the impetus to build the retention pond.

The settlement with developer #2 was totally unconnected with this sewer easement and the proposed retention pond -- except for the fact that the settlement gave our community access to a retention pond on developer #2's property. This was done prior to the agreements with developer #1. Which means that the proposed retention pond was not needed.

I know - it's convoluted.

Thanks again for spending time trying to help me through this - I really appreciate it!

I believe originally it could have been necessary as the Board didn't know if/when the community would have access to the large retention pond on developer #2's property. (However, the proposed retention pond would never have worked as designed; unfortunately, no civil engineer was hired to assess the developer's proposed retention pond prior to the agreements being signed. I hold the attorney responsible for this, as well as the property management company.)

More importantly, by the time the agreements were signed with developer #1 (BMP easement and sewer easement), the Board had already negotiated permanent access to the retention pond on developer #2's property.

Therefore, there was no urgent reason to convey community property (which meant, according to NC Statute 47F, community approval was required). I believe the Board was trying to save money by having developer #1 construct a retention pond at no cost, but overreached and created a disaster.

I just want what the original owners of my home had: a house adjacent to wooded community property. Unfortunately, unless a way is found to stop it, I might end up with a house adjacent to a retention pond with a 6-8 foot dirt berm and a 6-8 foot chain link fence.

Hi, thanks for the advice! I will try, although my intent is to ensure that the retention pond (no longer needed) is not constructed.

Thanks again!