It happens all too frequently. A condominium or homeowners association has an upcoming election for the Board of Directors, and no one throws their hat in the ring. Sometimes, you can talk to enough homeowners to find someone motivated by responsibility who will sign on for the job. Other times, it can be a challenge to find a homeowner willing to step up to the plate. Why? Board service takes time and can be a thankless task.
If you still have an HOA Board, is an open Board seat a problem? Yes, it can be very significant if it affects your ability to operate the association. HOA Boards need a quorum to do business, and a vacancy can shift the numbers so the Board does not have the minimum number of members for valid meetings and conducting business. In addition, the vacancy of an officer who has responsibility for check signatures, etc., can be very significant.
What's an HOA to do? Stay within the legal guidelines, but think out of the box. Here are five ways to consider.
1. Read your governing documents. These establish whether the board can operate with vacancies, the number of vacancies allowed, timeframes, and the means by which the vacancy must be filled. In some situations, governing documents allow a special election or a permit the Board to appoint someone to fill a vacancy. This is especially critical in the absence of a quorum.
2. Convince departing board members to stay. Sometimes, you can persuade departing Board members to stay on the Board. Most governing documents say something like a Board term ends when a successor is elected. If no successor takes office, an existing term can continue.
3. Don't rush an appointment. Some bylaws allow the Board to appoint someone to fill an unexpired term. Take your time and choose carefully. It’s all too easy to choose a warm body, and that can be destructive for the Board and the entire community.
4. Review your governing documents if there’s no Board. When there's no board, the governing documents will generally prescribe a means for homeowners to initiate a special membership meeting that would provide the venue for volunteer(s) to be appointed to the board.
5. Avoid a whole–board resignation. There have been situations where an entire Board resigns. Some state laws require a Board of Directors for a corporation (homeowner association). One of the benefits of forming a corporation is a corporate shield that protects company officers and shareholders from personal liability. If you lose your corporate shield as an officer of your association, it means you risk being personally sued for your actions. Depending on state regulations, whole-board resignations can get complicated.
Wise Property Solutions is a property management company serving East Tennessee (including: KINGSPORT, TN | JOHNSON CITY, TN | BRISTOL, TN | ELIZABETHTON, TN | ERWIN, TN | BRISTOL, VA | KNOXVILLE, TN) with offices in Knoxville, TN and the Tri-Cities, TN. Specializing in Condominium Association Management, Home Owners Association Management, HOA Management and Gated Community Association Management. The firm is East Tennessee’s only Accredited Association Management Company (AAMC®).
Knoxville, TN: 865-643-8989