New Board Member - Please Help!

I am a board member serving a small HOA community in North Carolina. I recently bought a home in the development and was elected to serve in my capacity by the membership at that meeting. I have a couple questions I could use help with:

1. The President and Vice President recently decided they no longer wanted to serve. They appointed their replacements without consideration offered to myself and the other Board member. I believe this is against our bylaws, should their appointment be revoked (if so, how)?:

Section 3. Removal; Filling Vacancies. Any Executive Board member elected by the Members of the Association may be removed from the Board, with or without cause, by a majority vote of the Members of the Association. Vacancies in the Executive Board may be filled until the date of the next Annual Meeting of the Association or until a Special Meeting of the Members of the Association called for such purpose by the remaining Executive Board members, except that should any vacancy in the Executive Board be created by the removal or resignation of any person appointed by Declarant to serve as a member of the Executive Board, such vacancy shall be filled by Declarant appointing, by written instrument delivered to any Officer of the Association, such successor to fill the vacated Executive Board position for the unexpired term thereof.

2. The newly appointed President and Vice President are having meetings without the whole board and making decisions about changing policies and hiring an attorney to discuss the changes. They then notify the rest of the Board about the decisions that have been made. They have also approved expenses that seem inappropriate (they paid for a reimbursement of a sleigh that was built by a community member that has a side job playing Santa at Christmas (we did use this person's services for the Christmas parade which was also not discussed with the rest of the Board - almost $800). We also recently agreed to hire a handyman at our meeting where the compensation was agreed to be $50/month retainer. The proposed handyman refused the job and the same Board members started offering $200/month retainer without consulting the rest of the Board. Is any of this appropriate? If not, what can be done?

3. Recently the offenders above consulted with an attorney without talking to the rest of the Board about "speeding up" the process of getting homeowners who have violations to comply or pay their fines, overdues, etc. They decided to start sending these notices OVERNIGHT delivery to the offending homeowners ($24/ea). I personally find this to be excessive and unnecessary and said so when they directed the Management Company to send the notices. They claim to have out voted me (the other Board member no longer responds to any emails/calls/texts) because they agreed. However, we are a nonprofit and the law states that when a physical meeting cannot take place, it can be done by other means, but the motion can only be enacted if ALL Board members agree. The Management Company went ahead and sent the notices overnight.

§ 55A-7-04. Action by written consent.
(a) Action required or permitted by this Chapter to be taken at a meeting of members may be taken without a meeting if the action is taken by all members entitled to vote on the action. The action shall be evidenced by one or more written consents describing the action taken, signed before or after such action by all members entitled to vote thereon, and delivered to the corporation for inclusion in the minutes or filing with the corporate records. To the extent the corporation has agreed pursuant to G.S. 55A-1-70, a member's consent to action taken without a meeting may be in electronic form and delivered by electronic means.
(b) If not otherwise determined under G.S. 55A-7-03 or G.S. 55A-7-07, the record date for determining members entitled to take action without a meeting is the date the first member signs the consent under subsection (a) of this section.
(c) A consent signed under this section has the effect of a meeting vote and may be described as such in any document. (1977, c. 193, s. 2; 1993, c. 398, s. 1; 2008-37, s. 4.)

You may have noticed a trend here. I admit that I'm a new homeowner and an inexperienced Board member. I just recently took to the internet to get myself familiar with things. When I bought my home in this neighborhood I wasn't provided with the Bylaws, Covenants, etc. by either the Board, Management Company, or my Closing Attorney. I'm really disappointed and am looking for guidance on how to do things in the best interest of ALL community members. Since I'm the only dually elected Board member (the other person's term is up and they no longer communicate via email or show up to the last 2 meetings) what can be done? The residents don't know anything about what is going on because we haven't had a general meeting since February 2020 and the meetings we held since have not been open to the residents (COVID)- they haven't even been notified that we've been meeting. Getting any kind of participation is really tough. Please help!

Thank you for your response, AugustinD. I am not 100% sure about the Directors vs. Officers, but it would seem that both resigned both as Directors and Officers. I assume that Directors are dually elected at an open board meeting by the membership present. Since I am relatively new to the community I assume that the former President and Vice President were properly elected, however, old meeting minutes say that the current Treasurer "volunteered"in 2019 (our terms are for 2 years). I have no idea what that "volunteered" means as far as elected or appointed. Assuming he was elected, he and I would be Directors, right?

Here's what was said in the email resignation (sent 10/2020):

As you know, [Vice President] and [President] were planning on retiring at the August meeting. Obviously, this never took place so we decided to hang in there until the next meeting. Since that does not seem to be on the horizon, we have found two gentlemen who will take our place. This will take effect November 20, 2020.

A detail I forgot - the VP is a lawyer (not licensed in this state).

I agree that the conflict is heavy on the mind - but not standing up for what's right is even heavier for me.

Is there anything the Management Company can do to help?

Welcome. Augustine gives good advice. I just wanted to include that the HOA is NOT responsible for providing you any of the HOA documents except maybe the by-laws. All other documents are to be provided by the seller in some states or you are to get them yourself at the County/state. So don't go blaming others or the HOA for not doing so. It sounds crazy I know. That is because those documents are considered PUBLIC documents and not needing anyone to specifically distribute.

Now that does not mean the HOA can't provide them. It would be considered a "courtesy" than a "requirement". I don't think it's a bad thing for the HOA to do this BUT it does lend to the idea the HOA is responsible for doing so.

I would memorize the best you can of the rules. If writing violations (PM not responsible) always quote them in the note. Have 1 source to contact the HOA attorney. The HOA attorney is the board/HOA attorney it is NOT the individual members attorney. That is because if someone sues their HOA, they are suing themselves and their neighbors. That HOA attorney is the one whom is going to be in court for the HOA.

Please feel free to come here and ask questions. Most of us here are experienced board members. We believe in education and not complaining unless need to release tension. Good luck!

KristinaS, please confirm: Is your HOA still under Declarant control? In other words has the developer/declarant been appointing directors to the Board?

Let me try and summarize:

If still under developer or declarant control, you're pretty much SOL.

If under homeowner control, the President and VP cannot appoint their replacements. They can offer their names as candidates, it would take a majority vote of the board where quorum is present to seat these two gentlemen.

There is a legal way for a board to meet with just two members and that is through an Executive Committee. The committee is limited in its scope as dictated by its charter.

Speaking from experience, attorneys are nincompoops. Many times their advice is not based on your documents or legal theories, but what someone wants to heard and as long as the check is in the mail. This will hold true for some management companies, but many are worth their weight in gold.

This is an opportunity for you to become educated in HOA matters, knowing you have to as smart or smarter than the person(s) you're dealing with.

As a follow-up.

In a Board meeting, Officers don't cast votes, only Directors.

As Aug said: Become educated in HOA matters and your own association docs so you become smarter then those you are dealing with.

I expect you are correct. The North Carolina Planned Community state statute likely applies to your HOA. As interested, see https://www.ncleg.gov/Laws/GeneralStatuteSections/Chapter47F . See especially 47F-3-103. Executive board members and officers. In the latter section, the word "directors" is not used. Instead "members of the executive board" is used. In the NC Nonprofit corporation act, the word "directors" is used. Directors = members of the executive board.

I agree. Nor can they serve as members of the executive board, since the executive board did not appoint them to fill vacancies on the board.

I am more afraid of your low chances of getting cooperation out of the two who currently think they are Pres and VP and possibly also members of the executive board.

In my opinion, and assuming you are the only (lawful) member of the executive board, I think you need to speak to these other two firmly // in your capacity // as the only actual member of the executive board and so as Thee Voice of the Corporation (and all members of the HOA) for the next day or so. If it appears to you that you are the only lawful member of the executive board, you have a fiduciary duty to appoint someone to be the newest member of the executive board. Then the two of you vote on appointing a third member of the executive board. Then the three of you select a fourth member... and so on. If possible, you should absolutely seek the advise of counsel, explaining that you believe you are at present the only lawful member of the executive board.

Not legal nor ethical, per the wording in the Bylaws and NC statute about board vacancies and filling same. Though I grant that the two dolts (former VP and Pres) and their henchmen who pulled this may try to argue otherwise.

Unfortunately, we are only looking at small portions of your Bylaws. You posted just one section of Officers and their duties, but nothing of their duties nor how are they elected. In addition, while the President and VP are automatically on the Executive Board, others could be.

You will need to take some time and read all three documents, Article or Incorporation, CCRs and Bylaws and see exactly how your association is supposed to be run, not how it currently is being run.

I strongly disagree that the Association bears no responsibility to provide association governing documents, as they may or may not be "PUBLIC" documents. Sellers or owners may not know when and if they have the most current documents and updates available, only the Association would or should. That's just a lazy person's excuse for leadership.

Katrina

ncleg.gov/Laws/GeneralStatuteSections/Chapter47F-3-103, part of which says:

(e) Not later than the termination of any period of declarant control, the lot owners shall elect an executive board of at least three members, at least a majority of whom shall be lot owners. The executive board shall elect the officers. The executive board members and officers shall take office upon election.

So we are narrowing in on this. The Executive Board must consist of at least three members elected by a majority (51%) of all owners. I do not know if the present two Members of your Executive Board were ever elected by a majority of the owners but I am fairly certain they cannot name their replacements. There would have to be an election to fill the vacancies.

It appears that the Executive Board basically runs the association/corporation and they can name others to aid them. I did not dig deep enough on this to be sure on this but it appears to be that way. Thus your owners only ever get to vote for the three on the Executive Board. I assume the Executive Board then holds an election from among it self to elect President, VP/Treasurer, Secretary. One could say an Executive Board is no different then our Board of Directors.

Our docs call for a BOD of three to seven Members and we run at five but we have been as low as three and the place ran just fine. We had/have President, VP/Treasurer, Secretary. I prefer five assuming all contribute versus just take up space.

This past Winter I took on the task of converting our Covenants and Bylaws from PDF files to a MS Word files. I also edited in the 5 changes that were made to the Covenants and Bylaws when transitioning to we owners happened. Our lawyer told me to put a disclaimer on the first page that these were not the "original documents" and should be used for reference only. For legal purposes, only the original PDF documents should be used. That said the Word Docs, are more up to date then the original PDF files are. They are easier to read and one can search in them.

Where I selling I would make it clear to everyone involved where they can obtain a copy of the PDF Files and the updated Word files. I would do this for two reasons. I want no one ever coming back on me that they were not told something nor do I want anyone coming back on the association saying they were never told something or not given a copy of the docs.

I want a nice clean sale for everybody involved and anything I can do to make that happen, I will..

See also this section of NC's Planned Community statute:

47F-3-106. Bylaws.
(a) The bylaws of the association shall provide for:
(1) The number of members of the executive board and the titles of the officers
of the association;
(2) Election by the executive board of officers of the association;
(3) The qualifications, powers and duties, terms of office, and manner of
electing and removing executive board members and officers and filling
vacancies;
(4) Which, if any, of its powers the executive board or officers may delegate to
other persons or to a managing agent;
(5) Which of its officers may prepare, execute, certify, and record amendments
to the declaration on behalf of the association; and
(6) The method of amending the bylaws.
(b) The bylaws may provide for any other matters the association deems necessary and
appropriate.

--https://ncleg.gov/EnactedLegislation/Statutes/PDF/BySection/Chapter_47F/GS_47F-3-106.pdf