Board Qualifications

Started by BillB17 • 7 replies • 86 views

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BillB17 (South Carolina)
Posts: 92

Posted:

We are a 400+ single family residence homeowners association in South Carolina. Our Annual Membership Meeting is coming up where we will elect three candidates to the BOD. One Member submitted an application as a candidate for election. This Member was disqualified because he was delinquent in payment of fines.

The South Carolina Not for Profit Act states that "All directors must be natural persons. The articles or bylaws may prescribe other qualifications for directors."

Many years ago, the Association adopted an Election Procedures Resolution which requires candidates "to be in good standing with assessments paid and no fines pending".

The disqualified candidate maintains that the Resolution requirement which form the basis for the disqualification is invalid because the requirement appears in a Resolution and not in the Articles or By Laws. For this to hold water, the term "Articles" would have to be interpreted to mean strictly our Articles of Incorporation or our Declaration of Covenants, Restrictions and Easements.

Is the disqualification justified or not?

ElleN (Idaho)
Posts: 1,333

Posted:

Quote:

Posted By BillB17 on 04/11/2026, 12:55 PM

We are a 400+ single family residence homeowners association in South Carolina. Our Annual Membership Meeting is coming up where we will elect three candidates to the BOD. One Member submitted an application as a candidate for election. This Member was disqualified because he was delinquent in payment of fines.

The South Carolina Not for Profit Act states that "All directors must be natural persons. The articles or bylaws may prescribe other qualifications for directors."

Many years ago, the Association adopted an Election Procedures Resolution which requires candidates "to be in good standing with assessments paid and no fines pending".

The disqualified candidate maintains that the Resolution requirement which form the basis for the disqualification is invalid because the requirement appears in a Resolution and not in the Articles or By Laws. For this to hold water, the term "Articles" would have to be interpreted to mean strictly our Articles of Incorporation or our Declaration of Covenants, Restrictions and Easements.

Is the disqualification justified or not?

First, for the definition of "articles," see the definitions section of the South Carolina Nonprofit Corp Act. In context, the meaning of "articles" here is the articles of incorporation.

Second, the courts recognize that the main way for owners to exercise control is to serve on the board. The courts will not casually take away the right to be elected.

Third, it appears this "resolution" is not a properly-done amendment to the bylaws or articles of incorporation. This means this gentleman is correct that he cannot be disqualified on the basis of this "resolution."

Fourth, the courts say that amendments to the governing documents have to pass a reasonableness test. Suppose your HOA followed the correct procedures for amending the bylaws. But the amendment was not reasonable. E.g. suppose the amendment forbid anyone with a weight over 200 pounds from serving on the board. This is not reasonable. It would never pass court muster.

Fifth, is it reasonable to disqualify someone from board service for being delinquent? For one, the California legislature said (via statute), under certain conditions, no. Just saying that, if push came to shove and people went to court over this, a South Carolina judge may or may not see such disqualification to be "reasonable."

Sixth, my advice: At the very least, those who do not want delinquent members on the board should seek an amendment to the bylaws. Then let the chips fall where they may.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Personally, if someone is delinquent in paying their annual assessment, I would not want them making decisions concerning how to spend the Associations money as they obviously are having issues with paying their own bills.

Personally, I don't think a rule concerning fines should keep someone from serving on the Board because such a rule can be abused to keep someone who disagrees with the board off the board.

Personal opinions aside, I agree with Ellen that, if challenged, the rule would likely be overturned by a court.
This would require the individual who was prevented from running to bring legal action against the Board challenging the resolution.

Alternatively, if there is enough support, it could be a campaign issue for other candidates.
Alternatively, if there is enough support, the membership may put enough pressure on the Board to get a legal opinion on the resolution.

BillB17 (South Carolina)
Posts: 92

Posted:

One moe consideration
Our By Laws state that "Nominations for elected members to the BOD shall be made by a Nominating Committee consisting of one BOD member and two or more members of the association. The Nominating Committee shall make as many nominations for election to the BOD as it shall in its discretion determine." While I personally do not see this as an additional "qualification" as allowed in the SC non Profit Corporation Act, I would like your opinions on whether or not it does.

I do not know whether or not the disqualified candidates name was placed into nomination. But, if our Nominating Committee did in fact place the name of the disqualified candidate in nomination, does that change anything, i.e. would it fall under an additional qualification? Note that the disqualification occured after the Nominating Committee placed candidates names in nomination.

ElleN (Idaho)
Posts: 1,333

Posted:

BillB17, the legal community has pretty much decreed that nominating committees must rubber stamp anyone who is qualified pursuant to the governing documents and state law. A Board with a nominating committee that goes outside the four corners of the governing documents and state law will lose in court.

Also do your bylaws permit nominations from the floor? If so this also tends to translate to a nominating committee having no power other than to check that the most basic requirements (per the gov docs and state statutes) are met.

Courts recognize that volunteers staff HOA/COA boards and that serving on the board is the main means for owners to have a voice in the HOA/COA's operations. To prohibit someone from serving on the board requires a darn good legal reason.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By BillB17 on 04/12/2026, 10:39 AM

I do not know whether or not the disqualified candidates name was placed into nomination. But, if our Nominating Committee did in fact place the name of the disqualified candidate in nomination, does that change anything, i.e. would it fall under an additional qualification? Note that the disqualification occurred after the Nominating Committee placed candidates names in nomination.

Regarding if the nominating committee approved or disapproved, to find out, request minutes of the board meeting that the disqualification was made.

As to does this give the individual in question a better argument? Something they should ask their attorney.

DeanJ
Posts: 1,786

Posted:

Does your declaration allow/provide for the suspension of any owner privileges for non payment?

If a dead best owner is allowed to use all the amenities, I suspect a court would rule baring a dead beat member from holding office as unreasonable.

LaskaS (Texas)
Posts: 1,025

Posted:

Bill, check your documents. Usually there is no limitation on board service,(other than certain convictions and crimes). But there is a limitation on who can vote .

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