Board of Directors Refuses to hold BOD Election

This is a continuation of a thread I started in May of this year located here -
https://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/285964/view/topic/Default.aspx

It's a long thread, so I'll summarize. Three unpopular board members of a five member board in our HOA cancelled the BOD elections and have refused to reschedule them. They used COVID-19 as the excuse, but we all know vote by mail and electronic meetings make the COVID-19 excuse invalid. The association attorney is propping up the three members as is the management company. Every attempt the community makes to force the counting of ballots (many ballots were mailed in before the scheduled elections in March) is met with a letter from the lawyer saying we have no say in the matter. We even convened a special meeting and voted overwhelmingly to count the ballots. The special meeting votes were submitted, but the management company and board refused to act on the vote.

It became clear we would need a lawyer and one has been hired. However, only one other resident and myself are shouldering the cost, which the lawyer has warned could ultimately cost $10,000 or more. The other resident is only in for $1,000. I am convinced without legal action, there never will be an election.

This is Florida where state statute 720 covers HOA's and statute 617 covers not for profit corporations.

So, I have a couple of questions:

1. The cost to pursue this to the end is probably going to be more than I can afford in retirement. Has anyone ever successfully represented themselves and prosecuted such a case?
2. If you were in my shoes, what would you do?

I'm seriously considering moving out of this community. The board has only had one meeting since last November and that meeting was in February. They are doing so many illegal things from sales tax fraud to clear and documented violations of our bylaws and statute 720. No one seems to care in the community other than to nod and say, "yes, we need elections." I'm just wondering if this is worth it. The community itself is nice and under different circumstances, I see it as the place in which I will live until the end.

Comments and opinions welcomed.

The lawyer is in the process of doing that. We tried every other avenue to force the election, but the association lawyer just keeps saying we can't, thus propping up the three board members. When we called for a special meeting, we followed the notice of meeting and petition requirements to a "T" and ran it by a lawyer who said we are good to go. The association lawyer said it was not legal and any vote was not binding. We held the meeting anyway and got an overwhelming vote to fire the management company (also propping up the three board members in question) and count the BOD ballots. The board simply ignored us.

The issue here as I stated, is I'm not sure spending up to $10,000 to resolve this is worth it. That is why I asked the questions I asked.

I also think the other homeowners are letting Tony down. If everyone's as upset with the current board as you and the other person who's paying the attorney, why in the hell aren't they helping with the fees? The more people involved, the cheaper for everyone, and this is a situation where I'd see if I could go after the board members personally to get reimbursement for all this.

I hope the DBPR can help you, but if they can't, you may need to make a decision about your finances and don't apologize if you need to tell the others you have to pull out and why. This is how it can be when effecting major change - you do all you can do, but you can't do everything by yourself. The others will either have to step up or this board will continue doing what it does. Good luck to you in whatever you do.

Tony, do you and the 8 other members constitute a majority of all the voting interests in your HOA? That would be required to recall one or more board members. Absent that, could you muster 10% of all the voting interests needed to call for a Special Meeting of the Members? It sounds like you already did something like that. Unfortunately, just because you manage to pull off a Special Members Meeting doesn't mean you can vote on anything at all at that meeting. Whatever you want to vote on must be something the homeowners have the power to do. Firing the Management Company is almost certainly not something the homeowners have the power to do. I'd have ignored that vote, too.

In a similar vein, whether the members voted to "count the ballots" from an earlier month or not, that's not something the members typically have the power to "force". I think the lawyer you seem to not like was possibly telling you the truth. In Florda, board elections have to take place at the Annual Meeting and if the board doesn't schedule the Annual Meeting, it doesn't matter what's on any of those ballots.

A majority of owners could recall the board (some or all of it). Without that majority vote, I think you're stuck. A members vote at a duly called Special Members Meeting has almost no effect outside of conducting a recall vote. 10% (unless your docs say different) can get you a Special Members Meeting, yes, but then you need a quorum to attend to even conduct the meeting, and a full majority to recall the board. Other than that, I think your Special Meeting was a waste of time. Essentially, I think you believe the homeowners have power and authority that they really don't possess. On that basis alone I'd argue that spending thousands of dollars on an attorney isn't going to be worth it for you. Half the money you'd spend would be eaten up by the time the lawyer would spend educating you about what can and cannot be done by the homeowners alone.

For what it's worth, I feel your pain. My board has been using COVID-19 as an excuse to avoid doing what they should do, and to justify other actions which they have no right to do. They haven't consulted the HOA attorney on any of it. The worst part is most of the homeowners don't care. There are some expenses in the monthly financial statements since March that I find questionable. They approach the "If it walks like a duck" stage of concern. Nothing major, mind you, but a few thousand in unsubstantiated petty cash disbursements and a shady contract or two really make the hairs on the back of my neck stand up.

Here's a 2009 DBPR arbitration case in Florida, 2009-04-3120. Three board members had expiring terms in 2009 and they were up for re-election. There was no quorum at the Annual Meeting and therefore no business could be conducted, including the election. The Annual Meeting was not rescheduled and the Directors on the Board that January continued on as directors (even though their terms had expired).

The homeowner/Petitioner argued that the association was required to organize a follow-up Annual Meeting after the scheduled meeting failed to attain a quorum.

The Petitioner also argued that the 3 directors whose terms had expired ceased to be Board Members because of the failed Annual Meeting.

Sound familiar?

As relief, the Petitioner wanted the DBPR to order the HOA to immediately hold an Annual Meeting with an election for the 3 seats whose terms were set to expire in January, and to declare that any actions taken by the 3 in the interim were invalid since the 3 were no longer directors once their terms expired.

Quick Ruling: The arbitrator laughed at the Petitioner, refuted both of her argunents, and denied her prayer for relief.

"Petitioner also argues that the Board Members whose seats were up for election lost their directorships on January 15, 2009, because their terms ended. Petitioner cites no legal authority to support her argument, and it runs contrary to Florida law.
...
Section 617.0806, Fla. Stat. (2009) states that a Director holds office for the term to which he or she is elected or appointed AND until his or her successor is elected or appointed. Accordingly, [name1, name2, and name3], whose terms were to expire, continue to hold their positions as directors until a successor is elected or appointed, or unless he or she resigns."

I re-read your thread from May, Tony. We tried to tell you and you wouldn't listen. You have some odd idea that if your board was forced to "count the ballots" from March that things would somehow be different. Save your money.

There are 187 homes in the HOA. You're wrong about the ability to vote and to cancel contracts at a special meeting. Both are supported by our bylaws and I believe Florida statute.


Board meetings can be postponed in an emergency according both my lawyer and the association lawyer.

Of course the issues go deeper. That's why I want the election held. The board has continued to break the law with impunity. An example. One member of the board committed tax fraud on behalf of the community. Wouldn't you want to get these people out of office? Unfortunately, the association attorney and management company, both of whom know of the legal issues, fight for the board members and against the wishes of the community.

GenoS made some good points and GenoS is probably right. I didn't listen to advice in the previous thread. I thought we could force the election to take place and it does not seem it will happen. Is that right? I don't think it is, but it looks like Florida laws have no recourse for those aggrieved parties when it comes to people who choose to break those laws.

In three and one-half months, our community will begin the clock for 90 days to hold an annual meeting and hold BOD elections. Based on what I have experienced so far, this board can again choose to not hold the meeting and there is nothing our community can do about it.

We called the DBPR a long time ago. They would not talk with us about anything other than arbitration. They don't intercede in HOA squabbles other than to settle issues on elections and recalls. If you know something different, please, let me know. As pointed out in the third post of this thread, a lawyer is in the process of filing for arbitration to force the elections. However, another respondent in this thread noted that if they haven't held the meeting yet, nothing we do will probably succeed in forcing the election. That respondent, GenoS, made a lot of sense. Our documents provide for meetings to be held within the first 90 days of the year and make no mention of remedies if they are not. Our lawyer even said we should consider letting it go and just wait until next year for the election. The reason we decided to have him file for the arbitration is I do not believe there is any guarantee the current expired term board members will allow the election even next year. The reason the management company and association attorney back this board is they know they will immediately be fired when new board members take office.

By the way, in the previous thread, you agreed that holding a special meeting was a good idea and that's what we did in late June. Your post:

"I agree this is an option to consider. Dotting i's and crossing t's is going to be difficult either way. At least with the Special Meeting approach, the members who want the jerks off the board do not have to roll the dice on the Florida DPBR's arbitrators being competent or saying that anything goes with COVID-19."
As pointed out earlier, the board, management company and attorney ignored the special meeting and the attorney even threatened us with a lawsuit for the way we handled the notices.

You can vent all you want, but why don't you read what was posted in this thread? We have been working with an attorney since June, but the process is long. Litigation for issues other than elections is very expensive and probably is more than a year from a court date, because Florida has cut way back on court due to COVID19. If there wasn't one other member of the association helping me with legal fees, I would probably fire the attorney and file the arbitration myself. The other member wants a lawyer to handle it.

You aren’t reading what I wrote in a previous post. JohnC46 pointed out there must be other issues involved and there are. Those issues cannot be settled by arbitration so would involve costly litigation. We HAVE filed arbitration for the election, but I have serious doubts whether it will even be heard this year based on information the lawyer gave me. Nor am I certain we will prevail based on what GenoS says. You say he’s wrong, but the only opinion that matters is the person hearing the arbitration. In an earlier post I pointed out that I was under the impression that a lawyer was required to file arbitration, but after reading a post from you with a link to the form, I looked at the form for the first time and realized I can do it. Regardless, I am in partnership with another community member and he wants a lawyer to handle it.

This follow-up thread had a question, which has been answered. Our attorney has a retainer. When he runs through that, I’m through. The retainer should get us to arbitration. My level of confidence that arbitration will succeed is not very high. And if we do lose, well, house values in Florida are way up and I wouldn’t mind moving to someplace that doesn’t have temperatures and heat indexes in the 90’s and 100’s for six months out of the year.

Can you gather up 51% of members signature to recall the board members who are the problem?

I am the original poster of this thread. I thought I would update it. In an earlier post, I said our lawyer filed for arbitration. That was incorrect. He filed for mediation. I thought they were one and the same, but they are not. Mediation precedes arbitration; although I am uncertain if that is required (something I have to ask my attorney). I do know one must go through mediation before arbitration if attorney fees are to be recovered. Florida statute chapter 720.311 covers mediation and arbitration.

So here is where it stands now. The board of directors' attorney would not meet for mediation before the first of December. It is fully expected that we will reach an impasse at the mediation and be forced into arbitration. That puts the timetable into the first quarter of 2021. Our documents require a member meeting in the first quarter of the year and that is when elections are held. I'm sure you see where this is going. They will not hold an election of board members for 2020. In 2021, they will call for an election of all five board members instead of only the three expired term members scheduled for election in 2020. This will be done in the hope that everyone is tired of the wringer the three obstinate board members have put the community through. They will no doubt field five candidates in the hopes of getting at least three elected, which would allow them to continue their sneaky and illegal ways within the community.

I'm out of ideas short of skipping mediation and suing them in court. That still probably wouldn't happen until sometime next year, so it would be a waste of money. We can mount a recall, but there is no question that the board's attorney would contest it and again we are into next year.

So I'm out of ideas. I thought maybe the expired term board members could be sued for breach of their fiduciary responsibilities, but I'm not sure we could get them on that either.

I've always been a law abiding citizen who believes our laws are meant to prevent law breakers from holding the upper hand. Suffice it to say, I no longer believe that.

Hmmm ... I don’t get this.

Tony needs to pony up for the cost of tilting at windmills.

Wasteful.