Can exiting board members stay on if election is incomplete and or is voided

TomM25 (Texas)
Posts: 13

Posted:

Bylaws: Our bylaws state that the term (3 yrs) expires at the annual election/mtg and new members shall be elected.

Scenario:
If we have 3 board member terms expiring and the election into issues and if a call is made to have a new election.. can the exiting board members stay on till the new election is complete and new members elected or does their term expire since it says so in the bylaws? This would leave just 2 board members on the board.

State Law: https://statutes.capitol.texas.gov/Docs/BO/htm/BO.22.htm
Sec. 22.208. TERM OF OFFICE.
(b) In the absence of a provision in the certificate of formation or bylaws setting the term of office for directors, a director holds office until the next annual election of directors and until a successor is elected, appointed, or designated and qualified.

What is your interpretation?

CathyA3 (Ohio)
Posts: 6,299

Posted:

That's usually what happens.

However, if you have a 3-person board and 1 member resigns, the remaining 2 directors are a quorum and could legally conduct business until you have the next election. They could also appoint someone to fill the empty spot if the election will be delayed for some reason.

MichaelS56 (Minnesota)
Posts: 858

Posted:

When is the Annual meeting for your HOA? Were there residents attempting to find new Board candidates before the Annual meeting? We have a Nominating committee made up of residents who visit with owners who may have expressed interest in being on the Board or have displayed an interest in keeping the Association functioning well. We have those owners fill-out a Board candidate form. At the Annual meeting we ask for Board candidates, after which we hold the election at the Annual meeting.

Right after the Annual meeting is done, the new Board meets and determines who is going to hold which officer position? For this Association, this process has worked for 25 years.

PatJ1 (North Carolina)
Posts: 568

Posted:

Cathy. It is my understanding that if By-Laws state a board of 5, with only 3 board members if 1 position is vacant, the remaining 2 do not meet quorum requirements. Same with Board meetings, all 3 have to be present for a quorum. Am I missing something?

BenA2 (Texas)
Posts: 1,273

Posted:

That state code does not apply because it specifies, "In the absence of a provision in the certificate of formation or bylaws setting the term of office for directors..." Your bylaws have a provision, making the code irrelevant.

That being said, your bylaws state that directors terms expire at the annual election. If the election is delayed or voided, I would say their term has not expired and they remain until an election is completed.

AugustinD
Posts: 3,698

Posted:

Quote:

Posted By TomM25 on 12/27/2021 10:02 PM
Bylaws: Our bylaws state that the term (3 yrs) expires at the annual election/mtg and new members shall be elected.

The "and new members shall be elected" part of TomM25's ppost makes me think the Texas statute section TomM25 quoted does apply. In other words, new members were not elected, so the term is unclear.

TomM25, can you please quote your Bylaw section on terms verbatim?

CathyA3 (Ohio)
Posts: 6,299

Posted:

Quote:

Posted By PatJ1 on 12/28/2021 6:09 AM
Cathy. It is my understanding that if By-Laws state a board of 5, with only 3 board members if 1 position is vacant, the remaining 2 do not meet quorum requirements. Same with Board meetings, all 3 have to be present for a quorum. Am I missing something?

Maybe we both did - does the OP have a 5-person board? I couldn't tell, which is why I qualified my answer with "if you have a 3-person board". But you're correct, if it's a 5-person board, then only 2 directors is not a quorum.

The OP asked if board members can stay on if the election got postponed or declared invalid, which I believe is the norm. I can't remember ever hearing about bylaws that would essentially leave an association dead in the water if an election needed to be rescheduled for some reason.

TomM25 (Texas)
Posts: 13

Posted:

Our bylaws:"At each annual meeting the members shall elect the number of directors whose terms are expiring, each for a term of three (3) years to commence after such annual meeting and expiring at the annual meeting approximately three(3) years later. Members may cast, in respect to each vacancy, as many votes as they are entitled to exercise."

Since the election counting ran into issues.. the attorney has unilaterally interpreted and determined that the exiting board members cannot stay on the board until new successors are appointed. Is he/she right per state law?

https://statutes.capitol.texas.gov/Docs/BO/htm/BO.22.htm
"(b) In the absence of a provision in the certificate of formation or bylaws setting the term of office for directors, a director holds office until the next annual election of directors and until a successor is elected, appointed, or designated and qualified."

AugustinD
Posts: 3,698

Posted:

Quote:

Posted By TomM25 on 12/28/2021 7:21 AM
Our bylaws:"At each annual meeting the members shall elect the number of directors whose terms are expiring, each for a term of three (3) years to commence after such annual meeting and expiring at the annual meeting approximately three(3) years later. Members may cast, in respect to each vacancy, as many votes as they are entitled to exercise."

Since the election counting ran into issues.. the attorney has unilaterally interpreted and determined that the exiting board members cannot stay on the board until new successors are appointed. Is he/she right per state law?

https://statutes.capitol.texas.gov/Docs/BO/htm/BO.22.htm
"(b) In the absence of a provision in the certificate of formation or bylaws setting the term of office for directors, a director holds office until the next annual election of directors and until a successor is elected, appointed, or designated and qualified."

I would argue that the meaning of "annual meeting" in the Bylaw section quoted is "annual meeting to elect directors." Since counting issues arose, the annual meeting to elect directors arguably did not occur. Hence the terms of the aforementioned three directors have not expired.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By AugustinD on 12/28/2021 7:51 AM

Posted By TomM25 on 12/28/2021 7:21 AM
Our bylaws:"At each annual meeting the members shall elect the number of directors whose terms are expiring, each for a term of three (3) years to commence after such annual meeting and expiring at the annual meeting approximately three(3) years later. Members may cast, in respect to each vacancy, as many votes as they are entitled to exercise."

Since the election counting ran into issues.. the attorney has unilaterally interpreted and determined that the exiting board members cannot stay on the board until new successors are appointed. Is he/she right per state law?

https://statutes.capitol.texas.gov/Docs/BO/htm/BO.22.htm
"(b) In the absence of a provision in the certificate of formation or bylaws setting the term of office for directors, a director holds office until the next annual election of directors and until a successor is elected, appointed, or designated and qualified."

I would argue that the meaning of "annual meeting" in the Bylaw section quoted is "annual meeting to elect directors." Since counting issues arose, the annual meeting to elect directors arguably did not occur. Hence the terms of the aforementioned three directors have not expired.

I agree.

TomM25 (Texas)
Posts: 13

Posted:

Quote:

Posted By JohnC46 on 12/28/2021 8:43 AM

Posted By AugustinD on 12/28/2021 7:51 AM

Posted By TomM25 on 12/28/2021 7:21 AM
Our bylaws:"At each annual meeting the members shall elect the number of directors whose terms are expiring, each for a term of three (3) years to commence after such annual meeting and expiring at the annual meeting approximately three(3) years later. Members may cast, in respect to each vacancy, as many votes as they are entitled to exercise."

Since the election counting ran into issues.. the attorney has unilaterally interpreted and determined that the exiting board members cannot stay on the board until new successors are appointed. Is he/she right per state law?

https://statutes.capitol.texas.gov/Docs/BO/htm/BO.22.htm
"(b) In the absence of a provision in the certificate of formation or bylaws setting the term of office for directors, a director holds office until the next annual election of directors and until a successor is elected, appointed, or designated and qualified."

I would argue that the meaning of "annual meeting" in the Bylaw section quoted is "annual meeting to elect directors." Since counting issues arose, the annual meeting to elect directors arguably did not occur. Hence the terms of the aforementioned three directors have not expired.

I agree.

That makes sense to me too.
Any one else think otherwise?

CathyA3 (Ohio)
Posts: 6,299

Posted:

Quote:

Posted By TomM25 on 12/28/2021 2:16 PM

Posted By JohnC46 on 12/28/2021 8:43 AM

Posted By AugustinD on 12/28/2021 7:51 AM

Posted By TomM25 on 12/28/2021 7:21 AM
Our bylaws:"At each annual meeting the members shall elect the number of directors whose terms are expiring, each for a term of three (3) years to commence after such annual meeting and expiring at the annual meeting approximately three(3) years later. Members may cast, in respect to each vacancy, as many votes as they are entitled to exercise."

Since the election counting ran into issues.. the attorney has unilaterally interpreted and determined that the exiting board members cannot stay on the board until new successors are appointed. Is he/she right per state law?

https://statutes.capitol.texas.gov/Docs/BO/htm/BO.22.htm
"(b) In the absence of a provision in the certificate of formation or bylaws setting the term of office for directors, a director holds office until the next annual election of directors and until a successor is elected, appointed, or designated and qualified."

I would argue that the meaning of "annual meeting" in the Bylaw section quoted is "annual meeting to elect directors." Since counting issues arose, the annual meeting to elect directors arguably did not occur. Hence the terms of the aforementioned three directors have not expired.

I agree.

That makes sense to me too.
Any one else think otherwise?

I also agree with your interpretation, based on the fact that the annual election didn't actually happen.

However, I would ask the attorney how they would expect an association to continue to operate legally if enough board terms were expiring to bring your board below quorum, and your election had to be postponed/redone/whatever. It seems nonsensical to leave an association unable to operate in cases where things don't go like clockwork, and it does happen occasionally. If the law truly says what the lawyer believes it says, that should be fixed.

TomM25 (Texas)
Posts: 13

Posted:

Quote:

Posted By CathyA3 on 12/28/2021 2:31 PM

Posted By TomM25 on 12/28/2021 2:16 PM

Posted By JohnC46 on 12/28/2021 8:43 AM

Posted By AugustinD on 12/28/2021 7:51 AM

Posted By TomM25 on 12/28/2021 7:21 AM
Our bylaws:"At each annual meeting the members shall elect the number of directors whose terms are expiring, each for a term of three (3) years to commence after such annual meeting and expiring at the annual meeting approximately three(3) years later. Members may cast, in respect to each vacancy, as many votes as they are entitled to exercise."

Since the election counting ran into issues.. the attorney has unilaterally interpreted and determined that the exiting board members cannot stay on the board until new successors are appointed. Is he/she right per state law?

https://statutes.capitol.texas.gov/Docs/BO/htm/BO.22.htm
"(b) In the absence of a provision in the certificate of formation or bylaws setting the term of office for directors, a director holds office until the next annual election of directors and until a successor is elected, appointed, or designated and qualified."

I would argue that the meaning of "annual meeting" in the Bylaw section quoted is "annual meeting to elect directors." Since counting issues arose, the annual meeting to elect directors arguably did not occur. Hence the terms of the aforementioned three directors have not expired.

I agree.

That makes sense to me too.
Any one else think otherwise?

I also agree with your interpretation, based on the fact that the annual election didn't actually happen.

However, I would ask the attorney how they would expect an association to continue to operate legally if enough board terms were expiring to bring your board below quorum, and your election had to be postponed/redone/whatever. It seems nonsensical to leave an association unable to operate in cases where things don't go like clockwork, and it does happen occasionally. If the law truly says what the lawyer believes it says, that should be fixed.

Agree. Even if 3 board members remain.. it is close to min for quorom and I question the motivation to leave a board that thin. Especially if a member cannot attend or wants to resign.. nothing will get done

AugustinD
Posts: 3,698

Posted:

CathyA3 and TomM25 have added great questions to take to the HOA/COA attorney.

I think what CathyA3 and TomM25 posted is also why competent HOA/COA attorneys say a board should do all it reasonably can to make sure all seats are filled at all times (via election by the owners or appointment allowed by the Board and per the governing documents).

TomM25 (Texas)
Posts: 13

Posted:

Quote:

Posted By AugustinD on 12/28/2021 3:24 PM
CathyA3 and TomM25 have added great questions to take to the HOA/COA attorney.

I think what CathyA3 and TomM25 posted is also why competent HOA/COA attorneys say a board should do all it reasonably can to make sure all seats are filled at all times (via election by the owners or appointment allowed by the Board and per the governing documents).

Any lawyers on here?

AugustinD
Posts: 3,698

Posted:

I know of no attorneys who post here giving suggestions on legal matters.

Sometimes a HOA/COA owner comes here and says he/she is an attorney specialized in ____ law.

Some of us have had to (tactfully) explain the law to our various HOAs/COAs attorneys. On occasion, some of use have pointed out errors and even corrected these HOA/COA attorneys. That's not the same as being an attorney. It is to say that HOA/COA law is so specialized that an attorney new to HOA/COA law may make mistakes. Some long-serving HOA directors may have more knowledge than the newbie HOA/COA attorney.

LetA (Nevada)
Posts: 2,679

Posted:

Did the "exiting" board member officially resign?
If they did not resign, they are automatically reelected via acclimation.
Now If you have a vacancy no Board Business can be conducted until your board reaches a quorum. The remaining board members need to conduct an election, send out nominations and ballots
if you have more that one person nominated for the sole position. If you only have one nomination, no election is needed.

TomM25 (Texas)
Posts: 13

Posted:

Quote:

Posted By LetA on 12/30/2021 3:52 PM
Did the "exiting" board member officially resign?
If they did not resign, they are automatically reelected via acclimation.
Now If you have a vacancy no Board Business can be conducted until your board reaches a quorum. The remaining board members need to conduct an election, send out nominations and ballots
if you have more that one person nominated for the sole position. If you only have one nomination, no election is needed.

No they did not resign. In fact they wanted to stay on till the issues were sorted out. But the lawyer who is close to one board member decided to interpret it and told them to leave.

LetA (Nevada)
Posts: 2,679

Posted:

Quote:

Posted By TomM25 on 12/30/2021 4:11 PM

Posted By LetA on 12/30/2021 3:52 PM
Did the "exiting" board member officially resign?
If they did not resign, they are automatically reelected via acclimation.
Now If you have a vacancy no Board Business can be conducted until your board reaches a quorum. The remaining board members need to conduct an election, send out nominations and ballots
if you have more that one person nominated for the sole position. If you only have one nomination, no election is needed.

No they did not resign. In fact they wanted to stay on till the issues were sorted out. But the lawyer who is close to one board member decided to interpret it and told them to leave.

Is this lawyer hired by the HOA? If not, I would tell the lawyer to go pound sand.

TomM25 (Texas)
Posts: 13

Posted:

Quote:

Posted By LetA on 12/30/2021 8:43 PM

Posted By TomM25 on 12/30/2021 4:11 PM

Posted By LetA on 12/30/2021 3:52 PM
Did the "exiting" board member officially resign?
If they did not resign, they are automatically reelected via acclimation.
Now If you have a vacancy no Board Business can be conducted until your board reaches a quorum. The remaining board members need to conduct an election, send out nominations and ballots
if you have more that one person nominated for the sole position. If you only have one nomination, no election is needed.

No they did not resign. In fact they wanted to stay on till the issues were sorted out. But the lawyer who is close to one board member decided to interpret it and told them to leave.

Is this lawyer hired by the HOA? If not, I would tell the lawyer to go pound sand.

Yes.