A little help with state laws, please...

Started by DavidG45 • 9 replies • 253 views

💬 Join us to post & get advice from 50,000 HOA & Condo leaders.

⚡ Takes 30 seconds

Already a member? Log in

DavidG45 (Delaware)
Posts: 994

Posted:

Delaware state law provides the following procedure for removing a member of the executive board, but I am having a difficult time understanding it. In particular:

* The first paragraph says it requires a 2/3 majority of all persons who vote.
* But the last paragraph says it requires a simple majority, so long as at least 1/3 of all homeowners vote

Can somebody make sense of this for me?

______________________________________________

§ 81-323. Removal of members of executive board.
Notwithstanding any provision of the declaration or bylaws to the contrary, the unit owners, by a two-thirds vote of all persons present, in person, by proxy or by ballot, and entitled to vote at any meeting of the unit owners at which a quorum is present, may remove any member of the executive board with or without cause, except that: (i) a member appointed by the declarant may not be removed by a unit owner vote during the period of declarant control, and (ii) a person appointed under § 81-303(f) of this title may only be removed by the person that appointed that member:

(a) The unit owners may consider the question of whether to remove a member of the executive board either: (1) at any duly called meeting of the unit owners at which a quorum is present if that subject was listed in the notice of the meeting, or (2) at a special meeting called for the purpose of removing a member of the executive board, whether or not a quorum is present, so long as the voting at the special meeting is conducted in the manner described in subsection (c) of this section.

(b) At any meeting at which a vote to remove a member of the executive board is to be taken, the executive board shall provide a reasonable opportunity to speak before the vote to all persons favoring and opposing removal of that member, including without limitation the member being considered for removal.

(c) If a special meeting is called for the purpose of removing a member of the executive board, then the following rules apply, whether or not a quorum is present at that meeting in person or by proxy:

(1) After all persons present at the meeting have been given a reasonable opportunity to speak, the meeting shall be recessed for a period calculated in the manner described in paragraph (c)(2) of this section below.

(2) Promptly following the recess, the association shall notify all unit owners of the recessed meeting and inform the unit owners of their opportunity to cast votes either in favor or against removal during the 30-day period following the day that the notice is sent.

(3) The notice sent to unit owners shall specifically inform them of their right to cast votes either in a secret written ballot, on a form provided to the unit owners or by electronic means according to instructions contained in that notice.

(d) Whether a vote under subsection (c) of this section is taken before or after a recess, and whether or not taken by electronic means, a member of the executive board may be removed only if the number of votes cast in favor of removal: (i) exceeds the number of votes cast in opposition to removal and (ii) is greater than 1/3 of the total votes of the association.

AugustinD
Posts: 1,027

Posted:

I interpret the statute section as follows.

At a Special Meeting properly called and noticed, a director is recalled only if the following conditions are met:

1.
A quorum must exist

2.
Two-thirds of all those at the meeting, in person or by proxy, and who are eligible to vote, vote for the recall of the director

3.
The number of owners at the meeting who are eligible to vote and who vote for the recall exceeds the number of votes cast in opposition to removal.

4.
The number of owners at the meeting who are eligible to vote is greater than 1/3 of the total votes of the association.

Example A:
Assume the quorum is 20%. All lots have equally weighted votes. There are 650 lots. All lots are eligible to vote.

Suppose exactly 130 owners appear at the meeting. Condition 1 is met.

Suppose 87 owners at the meeting vote for the recall. Condition 2 is met.

Suppose 43 owners at the meeting oppose the recall. Condition 3 is met.

One third of the total votes is 216.7. The number 87 is less than 216.7 . Condition 4 is not met. The recall fails.

Example B:
Now suppose 130 owners appear at the meeting, and all vote in favor of the recall. Condition 4 is still not met. The recall fails.

Example C, cutting to the chase:
217 owners appear at the meeting. All vote for the recall. All conditions are met. The recall passes.

DavidG45 (Delaware)
Posts: 994

Posted:

Quote:

Posted By AugustinD on 09/12/2022 12:40 PM
I interpret the statute section as follows.

At a Special Meeting properly called and noticed, a director is recalled only if the following conditions are met:

1.
A quorum must exist

2.
Two-thirds of all those at the meeting, in person or by proxy, and who are eligible to vote, vote for the recall of the director

3.
The number of owners at the meeting who are eligible to vote and who vote for the recall exceeds the number of votes cast in opposition to removal.

4.
The number of owners at the meeting who are eligible to vote is greater than 1/3 of the total votes of the association.

Example A:
Assume the quorum is 20%. All lots have equally weighted votes. There are 650 lots. All lots are eligible to vote.

Suppose exactly 130 owners appear at the meeting. Condition 1 is met.

Suppose 87 owners at the meeting vote for the recall. Condition 2 is met.

Suppose 43 owners at the meeting oppose the recall. Condition 3 is met.

One third of the total votes is 216.7. The number 87 is less than 216.7 .shouldn't 87 be replaced with 130? Condition 4 is not met. The recall fails.

Example B:
Now suppose 130 owners appear at the meeting, and all vote in favor of the recall. Condition 4 is still not met. The recall fails.

Example C, cutting to the chase:
217 owners appear at the meeting. All vote for the recall. All conditions are met. The recall passes.

I keep reading this, but I remain confused.

Condition 2 requires two thirds of those present to vote for recall. Condition 3 is just that a simple majority of votes must be for the recall. What is an example of Condition 2 being met, but Condition 3 not being met? If 2/3 voted for recall, then of course more voted for the recall than voted against it. This is my primary source of confusion.

Also, see my bolded comment regarding 1/3 of the vote in your Example A.

AugustinD
Posts: 1,027

Posted:

Regarding the seeming contradiction between Condition (2) and Condition (3):

It appears to me that the statute permits a recall without a Special Meeting, if authorized in the Bylaws or elsewhere in the statute. Per section (d), it appears an electronic vote may also be used, if the Bylaws or maybe the statute allows electronic votes.

If electronic means are used, then consider another example:

Example D:
All 650 owners vote electronically

500 owners vote "for quorum purposes only."

100 people vote for removal.

50 people oppose removal.

Condition 1 is presumably met.
Condition 2 is not applicable.
Condition 3 is not applicable.
Condition 4 is not met.

The recall fails, because 100 is less than 216.7.

The point is that none of the 2/3rds stuff is required. But a majority is required, and furthermore, those in favor of the recall have to number more than 1/3rd of the members.

Now I am going to go looking for what Delaware says about electronic voting.

Do your bylaws say anything about electronic voting?

I believe Example A is correct as written, because part (d) of the statute section says "a member of the executive board may be removed only if the number of votes cast in favor of removal... " In Example A, 87 votes were cast in favor of removal.

AugustinD
Posts: 1,027

Posted:

Quote:

Posted By AugustinD on 09/12/2022 12:40 PM

4.
The number of owners at the meeting who are eligible to vote is greater than 1/3 of the total votes of the association.

Typo. This should be:

4.
The number of owners at the meeting who are eligible to vote and who vote in favor of the recall is greater than 1/3 of the total votes of the association.

Typo. This should be:

DavidG45 (Delaware)
Posts: 994

Posted:

Quote:

Posted By AugustinD on 09/12/2022 1:28 PM
Regarding the seeming contradiction between Condition (2) and Condition (3):

It appears to me that the statute permits a recall without a Special Meeting, if authorized in the Bylaws or elsewhere in the statute. Per section (d), it appears an electronic vote may also be used, if the Bylaws or maybe the statute allows electronic votes.

If electronic means are used, then consider another example:

Example D:
All 650 owners vote electronically

500 owners vote "for quorum purposes only."

100 people vote for removal.

50 people oppose removal.

Condition 1 is presumably met.
Condition 2 is not applicable.
Condition 3 is not applicable.
Condition 4 is not met.

The recall fails, because 100 is less than 216.7.

The point is that none of the 2/3rds stuff is required. But a majority is required, and furthermore, those in favor of the recall have to number more than 1/3rd of the members.

Now I am going to go looking for what Delaware says about electronic voting.

Do your bylaws say anything about electronic voting?

I believe Example A is correct as written, because part (d) of the statute section says "a member of the executive board may be removed only if the number of votes cast in favor of removal... " In Example A, 87 votes were cast in favor of removal.

Okay, I'm going to take a nap and an aspirin and revisit.

However, for the Example A, I still don't follow. Your condition 4 says:
The number of owners at the meeting who are eligible to vote is greater than 1/3 of the total votes of the association.

So aren't we looking to see if the total votes (130) is greater than 1/3 of the association (216)?

DavidG45 (Delaware)
Posts: 994

Posted:

Quote:

Posted By DavidG45 on 09/12/2022 1:34 PM

Never mind...

AugustinD
Posts: 1,027

Posted:

Delaware code sections 81-310 (a) and 81-310 (f) speak at length about the option to vote electronically, and how action by the owners en masse without a meeting may be taken by electronic ballot, unless either the Bylaws or Declaration prohibit electronic voting.

Bottom line, unless the Bylaws and Declaration prohibit electronic voting, then a recall may be achieved by a simple majority vote, taken electronically, where at least 1/3 of all owners support the recall.

Bravo to Delaware and its legislators.

DavidG45 (Delaware)
Posts: 994

Posted:

Quote:

Okay, so let's see if I can paint a hypothetical that I think would be a likely outcome:

400 Vote (easily meets our quorum)
230 Vote for recall (meets the 1/3 required)
170 Vote against recall ("For" exceeds "Against")

So...Recall succeeds?

AugustinD
Posts: 1,027

Posted:

Quote:

Posted By DavidG45 on 09/12/2022 2:00 PM

Okay, so let's see if I can paint a hypothetical that I think would be a likely outcome:

400 Vote (easily meets our quorum)
230 Vote for recall (meets the 1/3 required)
170 Vote against recall ("For" exceeds "Against")

So...Recall succeeds?

As long as this was an electronic vote, and the Bylaws and Declaration do not prohibit electronic voting, I agree that the recall succeeds.

The Special Meeting sounds like a bit of a nightmare, with what looks like a mandatory 30-day adjournment. Obviously I have not put all that together yet.

🎯 You've read this entire discussion

Join the conversation with 50,000 HOA & Condo Leaders:

✓ Ask follow-up questions
✓ Share your experience
✓ Get expert advice
✓ Access 350,000 discussions

Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in here