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Unauthorized Board Actions

Started by EdR6 • 16 replies • 329 views

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EdR6 (Tennessee)
Posts: 16
Posted:
I am looking for advice on how to deal with an HOA board that has taken actions in violation of our documents. A specific example is they have voted to remove a director from the board and have barred him from participating in meetings and have told the management company not to communicate with him. (I am not on the baord.)

Our bylaws are specific about removal of a board member. Under the article about board members it states, "Section 3. Removal. Any director may be removed from the Board with or without cause by a majority vote of the members of the Association."

The board appoints there own officers and have the authority to remove an officer from that position. In the bylaws section regarding officers and duties it states, "Any officer may be removed from office with or without cause by the Board."

The board is using that clause to remove a duly elected director from the board. (This person was not even an officer.)

Several HOA members have told the board they can not do this, but have been ignored.

Is there any advice on actions to be taken to remedy this?
TerriS6 (California)
Posts: 3,284
Posted:
Is the removed director also seeking a remedy? It would be easier to enforce your governing documents if he/she was behind it.
TerriS6 (California)
Posts: 3,284
Posted:
It's possible you could get an injunction in general sessions court to order the board to restore the director's position on the board until a member election is held.
KerryL1 (California)
Posts: 14,550
Posted:
What you showed us is typical. Your Board is wrong and may be ignorant about the difference between officers & directors/board members, which is VERY common.

But, how do you know this all happened? Meeting minutes? Reports from meeting attendees? Formal announcement ivy mgmt. or he Board in writing to owners?

Time for unified action by owners! Maybe try this or some version of it.

Craft an informal (carries no legal weight) petition to the Board demanding that they vote to “rescind” (overturn) their decision of (date) to remove xx from the Board. They must because ONLY owners are authorized to vote to remove directors from the Board. Cite the exact wording in the Bylaw section about this + the number, e.g., 3.4

TN Corp. Code may have a similar requirement for the removal of directors. If so, cite it +. Can’t recall if TN has any HOA statutes, but, if so, cite the relevant dsection..

Demand that this petition be discussed at the next open board meeting. Uh, oh; is TN an open meeting state? EdR wrote that the banished director is “barred from participating in meetings.” Please clarify, Ed: from board meeting when owners may participate?

Get as many signatures as possible. Shoot for 10--20% of owners.

List
Name, sig, HOA addy, date

Send a copy to all board members; copy your MC. Copy the Association attorney if you have contact info. Send the MC a separate warning that they must not use their staff, etc., to support illegal action by the Board. That can harm the MC’s rep and future. Ask the MC to advise the Board to correct its legal error.

Well, just a start to consider tweaking, or? The best part about this is signers of the petition may well form the nucleus of owners who’ll vote out some directors on this Board, if, indeed, they’re as bad as they seem, at the next election. And, too signers may be willing to serve on the Board.

But, EdR, is it possible that this director did something so bad that your Bylaws do permit the Board to remove him? Something that the board would discuss in closed executive session so owners don’t know what that “something” is?
KerryL1 (California)
Posts: 14,550
Posted:
Re: contacting the HOA attorney. Your HOA might not have one, but if so the attorney works for the association and not for the Board (which does hire the attorney) nor for individual or collective owners.

So if you write to them, you're asking them to instruct the Board to follow the law to protect your Assoc. from accusations of illegal conduct, which could lead to lawsuits, e.g., from the "fired" director or from Owners. Ask the attorney to advise the Board about how to rescind the motion to remove the director.

The attorney will not reply to your group. Still, s/he'll have notice that the Board is acting illegally.

To see what's in the contract with the HOA, if you have one on retainer, request a copy or review of the contract in writing from your MC. If like many states, the Assoc. is required to let you review the contract. The right might be in your CC&Rs ,or your Bylaws and in state corp. code. Get thiei contract at info that way.
KerryL1 (California)
Posts: 14,550
Posted:
Re: contacting the HOA attorney. Your HOA might not have one, but if so the attorney works for the association and not for the Board (which does hire the attorney) nor for individual or collective owners.

So if you write to them, you're asking them to instruct the Board to follow the law to protect your Assoc. from accusations of illegal conduct, which could lead to lawsuits, e.g., from the "fired" director or from Owners. Ask the attorney to advise the Board about how to rescind the motion to remove the director.

The attorney will not reply to your group. Still, s/he'll have notice that the Board is acting illegally.

To see what's in the contract with the HOA, if you have one on retainer, request a copy or review of the contract in writing from your MC. If like many states, the Assoc. is required to let you review the contract. The right might be in your CC&Rs ,or your Bylaws and in state corp. code. Get thiei contract at info that way.
ElleN (Idaho)
Posts: 4,420
Posted:
EdR6,

-- Is this a Condominium?

-- Is your association subject to the Tn Condo Act (2008) or the Tennessee Horizontal Property Act?

-- The Tn Nonprofit Corporation Act has a lot to say about this. To see whether the latter applies to this situation, you are going to have to answer more questions.

-- Was the ejected director appointed by the board? Or was she/he elected by the owners at a properly called owners' meeting?

-- Are there any signs that the ejected director did something so outrageous that the HOA attorney advised the board to stop communicating with this director? Extreme cases exist where I would argue that the best interests of the HOA are served only by isolating the director in question.

-- If I were you, I would read the applicable statute sections and keep gathering more information. Once you have, and feel certain that the bylaw and statute section as violated, then the person in question should write a demand letter to the board, assuming he/she really wants his/her seat back.
ElleN (Idaho)
Posts: 4,420
Posted:
Quote:
Posted By KerryL1 on 07/12/2024 12:27 PM
Re: contacting the HOA attorney. Your HOA might not have one, but if so the attorney works for the association and not for the Board (which does hire the attorney) nor for individual or collective owners.

So if you write to them, you're asking them to instruct the Board to follow the law to protect your Assoc. from accusations of illegal conduct, which could lead to lawsuits, e.g., from the "fired" director or from Owners. Ask the attorney to advise the Board about how to rescind the motion to remove the director.

The attorney will not reply to your group. Still, s/he'll have notice that the Board is acting illegally.
I think the above is rather unclear. Here is what I would have said:

-- The HOA attorney does work for the association. However the HOA attorney takes direction solely from the board or the person the board designates.

-- The HOA attorney might very well write back to the owner. It just depends on what the retainer paperwork says.

-- If the HOA attorney does write back, then he/she does so not as an ally of the owner, and certainly not as the owner's attorney. The relationship is instead called "adversarial." The HOA attorney represents the HOA. The owner is an adversary. Granted sometimes the HOA attorney will agree with the owner. But even in agreement, the owner is still legally considered the adversary here. The reason this is important is because the HOA attorney by law cannot do certain things with the owner without taking certain steps.

-- Generally I strongly advise against an owner writing the HOA attorney. No owner should be deluded into thinking the HOA attorney //must// play referee. This is flatly false. Owners should go through the board for any legal concerns they have. Otherwise every owner and his sister will be writing the HOA attorney. Many HOA attorneys will take this as an opportunity to bill the HOA until such time as the Board says to forward all communications from owners to them.

-- Increasingly HOAs are flatly, routinely, without comment, passing along HOA attorney billing fees to owners. This is always almost always a violation of the governing documents and other law. But it has become a real hassle for owners to fight. They are up against unpaid amateurs on boards who do not know how to read covenants, statutes and such. A misreading of covenants on this point is incredibly easy and has dire effects on board-owner relations.
KerryL1 (California)
Posts: 14,550
Posted:
The OP cited: "Section 3. Removal. Any director may be removed from the Board with or without cause by a majority vote of the members of the Association." It is possible, as Elle suggests, that there might be someplace else in your Bylaws which do give the Board the authority to remove directors. Often, for example, bylaws will state that a director's spot is considered vacant if they miss 3 meetings, or some such. Another might be that directors may be removed by the Board for being XXX days delinquent in their dues.

Though our bylaws no longer say this, it IS common in bylaws that if the Board appointed the director to the Board, it has the authority to remove him

Fine if the removed director wants to pursue justice on their own.

In this case, assuming the Board does NOT have the authority to remove the director, I still firmly suggest unified-owner action. The OP cite: "Section 3. Removal. Any director may be removed from the Board with or without cause by a majority vote of the members of the Association."

Yes, do gather more state-level info, EdR. But I disagree that a group of owners should not send a copy of the petition to the attorney and request they advise your Board to follow the law or some such.

I f there's been a grave injustice against this former director, I'd hope that his fellow owners will offer their support.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
As Kerry said:

Your Board is wrong and may be ignorant about the difference between officers & directors/board members, which is VERY common.

I expect this is the case.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
As Kerry said:

Your Board is wrong and may be ignorant about the difference between officers & directors/board members, which is VERY common.

I expect this is the case.
TimB4 (Tennessee)
Posts: 21,059
Posted:
Education is the key.

Many don't understand that Directors and Officers are two different positions even when filled by the same person.

Directors make the decisions for the Association. Officers implement those decisions and handle the day to day tasks of the Association.

You board may remove an individual serving in an Officer position as they are appointed to that position by the board.

Directors, unless appointed by the Board, may only be removed by the membership (recall election).

So, If I am serving on the board as a director and am appointed as the Vice President, the board may remove me from the VP position at any time. However, I would still be a director.
WendyM5 (North Carolina)
Posts: 1,522
Posted:
Quote:
Posted By TimB4 on 07/12/2024 3:09 PM
Education is the key.

Many don't understand that Directors and Officers are two different positions even when filled by the same person.

Directors make the decisions for the Association. Officers implement those decisions and handle the day to day tasks of the Association.

You board may remove an individual serving in an Officer position as they are appointed to that position by the board.

Directors, unless appointed by the Board, may only be removed by the membership (recall election).

So, If I am serving on the board as a director and am appointed as the Vice President, the board may remove me from the VP position at any time. However, I would still be a director.

so true. I wish I could just rewrite the bylaws so that there are no directors only 5 officers who are also directors. would save so much time and explaning.
vis ta vie
KerryL1 (California)
Posts: 14,550
Posted:
Check SC corporations codes. Wendy. It could be that NC corporations are required to have "directors." In addition, such code may require that the Board have certain officers. Can't recall CAlif., but typical seems to be Prez, Sec'y, Treasurer. Some permit sec'y/treas. to be combined.

In my HOA, directors are elected by the Board to be officers. But only directors may vote at board meeting. Some Bylaws permit the Board to appoint officers who aren't directors. Secretary seems to be the most common. This non-director officer, however, may not attend executive session along with not voting

There is no time in my HOA spent explaining, ect., What is the confusion? Or?
KerryL1 (California)
Posts: 14,550
Posted:
Check SC corporations codes. Wendy. It could be that NC corporations are required to have "directors." In addition, such code may require that the Board have certain officers. Can't recall CAlif., but typical seems to be Prez, Sec'y, Treasurer. Some permit sec'y/treas. to be combined.

In my HOA, directors are elected by the Board to be officers. But only directors may vote at board meeting. Some Bylaws permit the Board to appoint officers who aren't directors. Secretary seems to be the most common. This non-director officer, however, may not attend executive session along with not voting

There is no time in my HOA spent explaining, ect., What is the confusion? Or?
DeanJ
Posts: 1,786
Posted:
If you contact the HOA attorney, nothing will happen unless the board wants to attorney to provide legal guidance on the issue.
MarshallT (New York)
Posts: 414
Posted:
This will be easier to remedy if the person who was removed wants their seat back and is willing to take action to get it. I think you will need help from an attorney to ensure the board follows bylaws correctly.

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