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BrianH10 (North Carolina)
Posts: 3
Posted:
For a brief period, our Board of Directors Membership fell below 3 Members after a Member resigned. Shortly afterward, in accordance with our Covenants and North Carolina Statutes, the Board elected a third Member to serve for the unexpired portion of the resigned Member's term. However, in the interim, our attorney advised us the 2 Member Board could not function, essentially, could not do anything. Later, she modified her stated opinion/counsel and advised the 2 Member Board it could handle day-to-day functions, but never defined what "day-to-day" meant. Then, she withdrew from advising the remaining 2 Member Board, while the HOA was in the midst of several legal disputes. Her doing so had a chilling effect on the Board, essentially causing Board paralysis. Since we now have a 3 Member Board again, I have to wonder whether or not we should have any further contact with the attorney. She essentially threw the 2 Board Members under the bus, forcing us to deal with the legal issues, known to her, without representation and I feel exposed the HOA, and the 2 Member Board as individuals, to the vagaries of the legal system. Any thoughts on NC Statutes on minimum Board Membership? Any thoughts on defining "day-to-day' functions? Any thoughts the legal advice?
BradP (Kansas)
Posts: 2,640
Posted:
without researching NC law I would point you to your documents, it should tell you what you need to function. Look in your bylaws. I would think with a 3 person board down to two that it would make things more difficult but shouldn't impede the progress of the association. I would look for new counsel, if they don't have a solid opinion and can't stick to it, it begs the question on their level of experience.
TimB4 (Tennessee)
Posts: 21,046
Posted:
Brian,

My Association/Board is going through similar issues at the moment. Effective 1 January 2012, the board can not seat a quorum. Therefore, until we appoint new members to the empty seat, the Board may not conduct business (make decisions). However, the Officers of the Association (who implement those decisions) may still do the day to day tasks.

Examples of Board Decisions:
Awarding new contracts
Renewing contracts
Making decisions on litigation
Waiving fees/fines
appointing committee members

Examples of Officer day to day tasks:
Paying bills
Collecting/Depositing Assessments
Overseeing existing contracts

As for your attorney abandoning you, I would immediately shop for a new attorney. If the attorney is also the registered agent, I would also shop for a new registered agent.

Hope this helps,

Tim

MelissaP1 (Alabama)
Posts: 13,836
Posted:
I had a similar issue my last year as President. Originally our documents required 9 members on our board but we got it reduced to 5. It was nearly impossible to get the 5...out of 107 owners. Unfornately, our documents didn't cover what to do when a board member resigns/moves. There was no appointing anyone just the election process. Which that happened only yearly in January.

As luck would have it, all but 1 person resigned or sold their house 1/2 way through the year. I was left with my Vice-President who some didn't like and he stopped paying his dues for a period of time. Even I had bought a house outside the HOA and moved out a few months before my term was up! Kept my HOA home as rental property and my new house was in the neighbhorhood next door.

We had a two signature requirement on cashing our checks the bookkeeper wrote. So it was just me, the bookeeper, and the vice-president who paid all the bills. I kept the HOA afloat until the elections. Which I had already announced my resignation as President but was to stay as a board member.

It is possible to operate with 2 - 3 people if need be. Issues that may require a quorum may need to be delayed. It may be the getting by mode that gets other people interested in volunteering. It's important to start stressing the importance of getting more people involved. I would try to create projects that encourages homeowners to act together. I organized a volunteer day where the owners could come together and fix the small stuff around the neighborhood. The kids really enjoyed this. I tried a neighborhood watch (NOT HOA funded). We had a yearly Halloween party. Anything that encouraged owners to do something and then educate them on the HOA.

Read your documents and it will lead the way. My philosphy is that there is ALWAYS a bigger fish...Your job is to feed a fish to get it big enough...

Former HOA President
BrianH10 (North Carolina)
Posts: 3
Posted:
Many thanks to the replies to my post. I read them all and took away some helpful ideas. In particular to Tim's reply, I'd like to know what resource, if any, was used to segregate "Board Decisions" from "Officer day-to-day tasks." I concur with how the examples are cateogorized. It makes sense to me. But, it would be even more helpful for me to know what resource, if any, was utilized as a guide to segregate the decisions/tasks. Again, thanks to all.

Brian
TimB4 (Tennessee)
Posts: 21,046
Posted:
Brian,

In addition to our governing documents, that specify some of the duties for each officer, I used the following:

Fairfax County VA Community Association Manual Click on chapter two. Then in the side menu click on Board of Directors and Officers.

THE SPOTLIGHT on the SECRETARY a pdf document by the National Association of Parliamentarians

SPOTLIGHT on the President a pdf document by the National Association of Parliamentarians

SPOTLIGHT on the Treasurer a pdf document by the National Association of Parliamentarians

Various threads on HOAtalk about the duties or difference between officers and directors.

Various sources are also available by doing an internet search "officers vs. directors"

As I posted before, basically, Directors decide what the Association will or won't do based on the authority given to them by the governing documents and State laws. Officers implement those decisions and carry on other duties as assigned by the Associations governing documents and the Board of Directors.

Hope this helps,

Tim

BrianH10 (North Carolina)
Posts: 3
Posted:
Great stuff Tim, especially the Fairfax County VA publication. Thanks again.

Brian

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