Newbie looking to learn

Greetings! New to being on my Board. Trying to track down sources of governing rules which apply to HOAs at State or Federal levels. Our HOA documents are either Declarant-heavy in communicating how a Board is run vs an elected Board, or vague, or silent.

For a simple (maybe?) example subject: election of Officers for a new year's Board. My understanding is that a new Board will newly elect Officers. However our HOA docs do not address that. The only language I find speaks to when the Board was chosen by the Declarant, leaving assigned Officers in their positions without reference to terms ending, only that the Declarant retained the rights to change, dismiss, assign those positions with or without cause.

What a fine list from Tim. Your specific question about the selection of officers should be in the Nonprofit Corp. Act if your Bylaws are silent on this particular subject.

Yes, I am re-reading the provided info. I did follow through to revisit the Nonprofit Corp act for Montana (quite a number of times now) and seem to be either blind to recognizing info covering the
election of Officers from amongst Board members or would it be considered a “double-silent” situation?

AiG, is this a condominium subject to the MT Condo Act? If so, I have more to say about officers. If this is a subdivision (single family homes sitting on lots), then the following applies.I find doing a keyword search of a statute is often the most efficient way to gather information on any given topic. In this case, I googled as follows:

"officers" site:https://casetext.com/statute/montana-code/title-35-corporations-partnerships-and-associations/chapter-2-nonprofit-corporations

In my opinion, the following answer your query:

Section 35-2-216 - Organization of corporation
(requires the corporation's initial directors to call an organizational meeting to appoint officers and more)

Section 35-2-439 - Required officers
(1) Unless otherwise provided in the articles or bylaws, a corporation has a president, a secretary, a treasurer, and any other officers appointed by the board.
(2) The bylaws or the board shall delegate to one of the officers responsibility for preparing minutes of the directors' and members' meetings and for authenticating records of the corporation.
(3) A person may simultaneously hold more than one office in a corporation.

Section 35-2-442 - Resignation and removal of officers
(refers to the board filling officer vacancies, as desired, when officers submit a notice of resignation in a advance of the resigation date they give)

Section 35-2-414 - Requirement for and duties of board
(1) Each corporation must have a board of directors.
(2) Except as provided in this chapter or subsection (3), all corporate powers are exercised by or under the authority of the board, and the affairs of the corporation managed under the direction of its board.
(3) The articles may authorize a person or persons to exercise some or all of the powers that would otherwise be exercised by a board. To the extent authorized, a person authorized under this subsection has the duties and responsibilities of the directors and the directors must be relieved from the duties and responsibilities to that extent.

My conclusions about what this statute says about selecting officers:
If the HOA has been around for many years such that the initial directors are long gone, then the board can appoint the statutorily required officers anytime it wishes. It can also remove people from officer positions anytime it wishes.

Form Elle: "Section 35-2-442 - Resignation and removal of officers (refers to the board filling officer vacancies, as desired...)"

so this clearly shows that Boards do appoint officers. And it's generally how JohnC, an experienced board member describes. If your bylaws and perhaps your Articles of Incorporation are silent, you probably may appoint one or more officers who are NOT directors , say, as treasurer because no directors wants that position. Or sometimes as secretary.

I guess if your documents truly are silent, your Board will want to make a policy about such elections.

I noticed referencing the Declarant. Are you still developer owned? If so, then not much can do unless your lucky to get the Developer to have put in an owner board. Otherwise, hate to say it but your HOA has to update their CCR's, by-laws, and Articles of Incorporation to remove any developer references. This does include their Class A voting powers. Plus make sure to not overlook the need members must be owners. When people change their docs from developer they forget that part. The developer doesn't require their "board" to be owners. They can be their employees or hired.

One thing that I learned to do is to bring a copy of the CCR's, by-laws, and articles (ACC if have one) to EVERY meeting. You don't necessarily have to take the time to reference them in a meeting to save time. They should be referenced in any WRITTEN response with the section that applies. It just helps if you need to do a quick reference check they are there. Plus doesn't hurt if people can read them and know they exist. They can make sure to make a copy if needed.

Welcome to the HOA game. Lots to learn. Tim and Cathy are great at giving advice. Me not so much all the time. Just willing to help with some free advice.

Oh, I'd already read the Section, but chose to simply cite your summary, Elle.

35-2-442. Resignation and removal of officers. (1) An officer may resign at any time by delivering notice to the corporation. A resignation is effective when the notice is effective...If a resignation is made effective at a future date...its board of directors may fill the pending vacancy ...." Given the language that the board may fill the vacancy of an officer who resigns, my reading is they may fill any office that is "vacant."

But it seem this Board will need to define officer terms so that at the end of the term, the offices are "vacant." It's very typical in HOAs that officers' terms are for one year. Generally, officers are elected immediately after the annual meeting at an "Organizational" board meeting. So the one-year term ends on the date of the annual meeting.

Btw, I also saw this: 35-2-452. "Indemnification ... Unless limited by a corporation's articles of incorporation:
(1) an officer of the corporation who is not a director is..." so it's clear that your board may appoint officer who are not directors. If you do, those offices do not vote on board business because they are not directors.

Very well.

I myself took this section to be only a bit supportive, and not dispositive, of whether the board has the authority to appoint officers.

The above is getting into "best practices." The latter are subjective.

I would want to see what the bylaws and Articles of Incorporation say before advising further.Caveat (which I am sure just slipped your mind as this thread focused for the moment on statutes): This depends on what the bylaws say. The bylaws might require one or more of the officers to be directors.

I must say that all the replies, the willingness to probe and delve into the details of someone else’s challenge is beyond words impressive and very much appreciated.

In response to an observation as to my HOA being under Declarant control, the answer to that is yes! The situation currently sits at: 1 lot left to sell equating to a 1.5% share. 100% of lots need to be sold for a turn over. 10 years ago, Declarant created a “temporary” relinquishment of control over assigning a Board to allow elections, retained all other control including the Architectural Review committee and lives out of Country for at least half the year.

I wish I could say the Board is all on the same page when it comes to seeking and using governing practices which support community- how do I put this succinctly- evenly, transparently, wisely. I know those are qualitative words, however at least for now, I still look view them as having meanings that are readily identifiable. The sources identified here in your responses are excellent examples of work put together in support of those aspirations.

A Declarant-leaning framework without updates to reflect changes in laws is difficult. General apathy amongst the homeowners unfortunately leaves seats to be filled by those of us who may not have a preferred or ideal background. That can still be okay if the motivation to fulfill the duties runs parallel to a best-practices base. I ran to for better communication, to increase transparency, to support even-handed oversight.

Again I so appreciate the support here and whether I am able to use or not (due to Declarant-control remnants or resistance) I at least can learn how things are suppose to be.

About a dozen years ago I had a conversation with a long-time County engineer who had alerted me to a last minute meeting called on a topic I was researching. I asked him what was the agenda was going to be. His immediate response was “Everyone will bring their own.” It still makes me smile. Such wisdom in a grizzly gentleman whose would rather be building things than dealing with the public but whose job had him dealing with public more often than building things.

Kerry1

All homeowners, no declarant or declarant rep*

* not officially a declarant rep, the current President has made what I consider strange statements relative to the history
I have found reading what the minutes from 2008 forward (I was wrong earlier in my estimate of how long it has been since the temporary
relinquishment by the Declarant for appointing Board members; it's coming on 16 years). Basically, the history with the Declarant has been negative, not uncommon right? Current President vigorously guards access to the Declarant. The President also likes to boast that the Declarant thinks she is doing a good job. It's an eyebrow raiser thing to say. The handful of original residents along with years of Minutes indicate there isn't evidence to recommend the Declarant as a benevolent Dictator.

But back to your questions. There are supposed to be 5 members on the Board, 4 of which would take on Officer titles.