How long are our board members' terms?

Our bylaws appear, to me, to be a jumbled up mess. See verbiage below. Eseentially:

* Board is initially three board members of the developer's choosing
* When the community sells 25% of the homes, the residents elect one board member, while the developer keeps the other two
* When the community sells 75% of the homes, the residents elect a brand new board of five member.

So far, all is fine, and we are now in the process of holding our first election of five board members. But now when we get to the length of terms, it was clearly meant to "stagger" the terms by providing different lengths of the initial terms for the new board. After the first term, terms then are for two years. The problem is that the bylaws only specify the lengths of the initial term of three board members; whereas our board is going to have five members. So any idea about how long our initial terms ought to be?

**********
Section 1. Number and Qualifications.
The affairs of the Planned Community shall be governed by a Board of Directors known
as the Executive Board. Persons eligible to serve as members of the Executive Board are natural
persons who are designees of the Declarant, or Lot Owners. The Executive Board shall initially
consist of the three (3) persons named in the Declaration. The Declarant shall have the right, in
Declarant’s sole discretion, to replace all initial Executive Board members, and to select and
designate their successors and thereafter remove Executive Board members and designate their
successors from time to time, until not later than sixty (60) days after the conveyance of twenty
five percent (25%) of the Lots that may be created in the Planned Community to Lot Owners
other than Declarant(the “First Benchmark”). During the period from the First Benchmark until
no later than the earlier of (1) sixty (60) days after the conveyance of seventy five percent (75%)
of the Lots that may be created in the Planned Community to Lot Owners other than Declarant,
(ii) two (2) years after Declarant and any other declarants as defined in Section 81-103 (16) of
the Act have ceased to offer Lots for residential purposes for sale in the ordinary course of
business, (iii) two (2) years after any right to add new Lots for residential purposes was last
exercised, or (iv) the day the Declarant, after giving written notice to Lot Owners, records an
instrument voluntarily surrendering all rights to control activities in the Corporation (the
“Declarant Control Termination Date’), one (1) member of the Executive Board is to be elected
by the Lot Owners pursuant to Section 2 of Article II of these Bylaws and the remaining two (2)
members are to continue to be selected and designated by Declarant. Not later than Declarant
Control Termination Date, the Lot Owners must elect an Executive Board of five (5) members,
who must be Lot Owners. The Declarant
shall have no power to designate any Executive Board member after the Declarant Control
Termination Date.

Section 4. Term of Office.
The term of office of one (1) member of the Executive Board shall be fixed at three (3)
years, the term of office for one (1) member of the Executive Board shall be fixed at two (2)
years, and the term of office of one (1) member of the Executive Board shall be fixed at one (1)
year. At the expiration of the initial term of each respective member of the Executive Board, his
or her successor shall be appointed or elected, as applicable, to serve for a term of two (2) years.
The members of the Executive Board shall hold office until their respective successors shall

If I were the HOA attorney and asked to opine on this, I would find the relevant statutes silent on the point (yes, I checked). I would agree staggering is intended. I would say for the first election:

-- One director will have a term of three years. Assume Director Schlegel wins this seat.
-- One director will have a term of two years. Assume Director Wilcox wins this seat.
-- The remaining three directors will have a term of one year.

Subsequently the term is two years for each director.

The phrase "fixed at" means that, if Director Schlegel resigns or is removed before three years expire, her replacement serves out the remainder of the three year term. If Director Wilcox resigns or is removed before his two year term expires, then his replacement serves out the remainder of the two year term.

If the Board is allowed to make reasonable rules regarding the election, then just say that the highest vote getter gets the three year term. If Director Schlegel is indeed the highest vote getter, and does not want to serve three years, she is free to resign, perhaps in favor of another electee who does want to serve three years. The two directors swap, with the proper blessing of the board, which has the power to appoint and so on.

I have yet to read of a HOA that has not had record-keeping and other problems with staggered board seats.

What does it take to amend the bylaws?

DavidG45, do check to see if the Articles of Incorporation say anything about directors and terms.

Once again, one attorney may say one thing. Another may say another. In my opinion and based on reading lots of election and amendment bylaws and covenants, the lack of a qualifier such as "all of the Lot Owners" means that a simple majority of those lot owners present in person, by proxy, or by possibly by absentee ballot, can amend the bylaws, assuming quorum is met. Nationwide the numbers for amending the bylaws are almost always much easier to achieve compared to amending the covenants.

What does your Declaration require to amend? By any chance is the Declaration more clear? I would expect so, since nationwide, Declarations tend to require, for an amendment to take effect, a supermajority of all lot owners (not just those present in person or by proxy) to vote in favor.

Your two main questions are the stuff of great disputes. People get annoyed with such confusion.

I wish I had a silver bullet for the first question. Maybe someone will see something I am missing.

Does the Certificate of Incorporation say anything about directors' terms?

David

Announce that in order to meet the intention of the Bylaws to have staggered BOD Terms, that we will be electing 5 BOD Members this year. The highest 3 vote getters will have two year terms. The next 3 vote getters will have one year terms. In all elections after this year, there will be 2 year terms thus an election every year for either 2 or 3 BOD Members.

So far, I see it as JohnC does. Can you finish the relevant part of Section 4, David?

Does the declaration say specifically that the 67% applies to the Bylaws?

I must say that our HOA's board of 7 has never encountered difficulty, over the 15 years I know of, in maintaining staggered terms. The major benefit, of course, is that there never is a board of all or almost all newbies.

I'm not sure what you're driving at, Max. Do they relate to David's Bylaw above?

I'm still confused by David's citations. Sect.4, Term of Office, seems to refer to when the declarant is still in control and there are only 3 directors. It says nothing about how to do 5 directors.

I'm not seeing how it's supposed to work with 5 directors. I also see Sect. 1 & and incomplete Sect. 4.

To establish staggered terms, it might say something like: At the first election, three directors are elected for 2 years, and 2 directors are elected for 1 year. Thereafter, all terms are for 2 years. (And then go into handling vacancies.)

Our own ca 2000 original/current Bylaws are very murky about staggered terms and do not use that word. Not only that, if a vacancy, the newly appointed director would serve for 2 years not till the end of the previous person's term. But this wording also was ambiguous. This did long ago create a year when 5 directors would be elected by the membership. Given the wording in our Bylaws, our HOA a attorney opined that the clear intention of the Bylaw section was to have staggered terms, so at the election to straighten out this mess 3 could be elected for 2 years and 2 for one year with the top vote getters, etc.

Here's what our restatement says: "Four (4) Directors will be elected in each even numbered calendar year and three (3) Directors will be elected in each odd numbered calendar year to serve for a term of two (2) years so that the Directors on the Board shall be elected to serve in staggered two (2) year terms. "

I think David needs to check with the HOA attorney on this. There's no point going to the trouble & expense of an election to amend the Bylaws unless your attorney says you should. David seems to have a few other higher priority matters to work on.

I apologize, Max. NO dig intended at all! I just couldn't follow your post. It might have helped me if you'd cited JohnC instead of me. Yes, I do see JohnC said 3 & 3. I saw it as a typo.