HOAleader.com - Tip of the Week - January 16, 2015
Published: Fri, 01/16/15
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Owners Ready to Serve, But HOA Board Refuses to Fill Vacancies
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A HOAleader.com reader asks if it’s OK for his fellow board members to refuse
to appoint two ready and willing owners to fill vacancies on the board. In
this week’s tip, we tackle whether that may be a breach of a board member’s
fiduciary duty.
Perhaps not. “Almost all bylaws say if there’s a vacancy, the board ‘shall’
vote to fill that vacancy,” says Joshua Krut, a partner at Weiss Serota
Helfman Cole Bierman & Popok, a law firm with offices in Ft. Lauderdale and
Coral Gables, Fla., that represents about 250 associations. “And shall
means shall. You have to fill that vacancy. If the governing documents don’t
say that, I’m not sure it’s a breach of the board members’ fiduciary duty as
long as you have a functioning board because you have a quorum. These board
members can be resistant since they have quorum. But in most cases, they’re
violating their documents since most say ‘shall.’”
That’s also the case in Colorado. “A lot of bylaws say you ‘shall fill’ if you
have a vacancy, and then the board attempts to get the vacancy filled,” says
Melissa Garcia, a partner at Hindman Sanchez, a law firm in Arvada, Colo.,
with about 1,600 association clients. “Here there are people willing to
serve, so there’s no reason not to appoint them. But if the board can’t get
owners to fill vacancies and they don’t need five members, maybe it can lower
the number of members to three. Maybe it’s appropriate to reduce the number
of board members if they have the ability to do so.”
What if the documents don’t have the magic “shall” word? “If the governing
documents say ‘may,’ I don’t think it’s OK to not fill the vacancies, but it’s
not illegal,” says Robert Galvin, a partner at Davis, Malm & D'Agostine PC in
Boston who specializes in representing condos and co-ops. “Board members
can’t be forced to do it. Now if the unit owners are really upset with the
board’s action, or in this case nonaction, there’s always a provision for
removing those board members. You can recall them at any time. Usually,
governing documents say that can be done with or without cause on a vote of 51
percent. But even that’s hard to do because those board members usually have
at least some friends among owners.”
However, it’s possible these board members could be making a rational, even
wise, decision. See why in our new article: http://www.hoaleader.com/members/1117.cfm
Best regards,
Matt Humphrey
President
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THIS THURSDAY! - Webinar for HOA and Condo Boards
Accommodation Requests Under the Fair Housing Act:
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Join us Thursday, Jan. 22.
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To register or learn more, go to: http://www.hoaleader.com/products/Accommodations-Under-FHA-Webinar-a.cfm
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Recent articles posted at HOAleader.com:
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HOA Board Declines to Fill Vacancies: A Breach of Fiduciary Duty?
An HOAleader.com reader writes, "In our condominium with an allotted
number of five board members, we have only three--one of whom is me, a
recently-elected member--following the recent resignation of our
treasurer and our president and our management company dropping us.
Click here to read full article:
http://www.hoaleader.com/members/HOA-Board-Declines-Fill-Vacancies-Breach-Fiduciary-Duty.cfm
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Having the Urge to Merge with Another Condo or HOA? Read This First
In this week's tip, we offer tips for associations that just aren't
operating smoothly and might want to consider merging with another
association.
"I've been asked about mergers before," explains Joshua Krut, a partner at
Weiss Serota Helfman Cole Bierman & Popok, a law firm with offices in Ft.
Lauderdale and Coral Gables, Fla., that represents about 250
associations. "Typically, it's a small community, and maybe it was formed
with too many associations, so you really need only one association instead
of three. Sometimes it makes sense to merge the three into one."
Click here to read full article:
http://www.hoaleader.com/members/Having-Urge-Merge-with-Another-Condo-or-HOA-Read-This-First.cfm
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Mergers Work for Corporations. What About Condos and HOAs?
Are things just not running smoothly at your condo or homeowner
association, and you can't figure out why? Maybe you always seem short on
cash. Or maybe you don't have enough people willing to serve on your board.
Here's an idea: How about pooling your resources with that of another
association through a merger?
Click here to read full article:
http://www.hoaleader.com/members/Mergers-Work-for-Corporations-What-About-Condos-HOAs.cfm
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HOA Boards: Here are Five Great New Year's Resolutions for 2015
While you're resolving to improve your personal life, don't forget to
improve your HOA board operations, too. In this week's tip, we get you
started with two of five things boards should do and stop doing.
Click here to read full article:
http://www.hoaleader.com/members/HOA-Boards-Here-are-Five-Great-New-Years-Resolutions-for-2015.cfm
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It's a New Year! Five Things HOA Boards Should Resolve to Do -- and Stop Doing
Our experts suggest you turn over a new leaf in 2015. Here are five things they
say board members should be doing but often don't, along with things board
members do but shouldn't.
Click here to read full article:
http://www.hoaleader.com/members/New-Year-Five-Things-HOA-Boards-Should-Resolve-To-Do-And-Stop-Doing.cfm
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