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Subject: AZ HOA appointment of director by email
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Author Messages
DavidH38
(Arizona)

Posts:15


02/07/2018 9:55 PM  
Like other members of the association, I was surprised to hear our board president announce at the last board meeting that board member #3 (of a total of three) had resigned and that "Phil" was the new board member replacement. There was no vote by the two remaining board members to elect Phil; he was just there as the new board member.
I arranged to have coffee with the board president and told him of my concern. I wondered if perhaps there had been a special or emergency board meeting that I didn't hear about. No, he replied. "Jerry and I just decided via email to ask Phil to join the board."
I tried everything I could think of to get the board president to understand that in Arizona, you can't just appoint someone via email to serve on an HOA board of directors. He wouldn't have any part of it. I was just a "nit-picker" trying to make his job harder. Ugh.
What do I need to say or do to get this guy to understand his role, the law, and the jeopardy he's putting the association in by his actions?
JanetB2
(Colorado)

Posts:3767


02/08/2018 12:19 AM  
In most States under their Laws the remaining BOD members can “appoint” an individual to fill a Director postition for the remaining term (until your next annual election). When you state:

“I tried everything I could think of to get the board president to understand that in Arizona, you can't just appoint someone via email to serve on an HOA board of directors.”

My question is why did you not provide proof of this statement? Is it because you have no proof?
BenA2
(Texas)

Posts:180


02/08/2018 5:10 AM  
If I understand correctly, your issue is that they made this decision without having a meeting. I don't know AZ law but typically a meeting is required to appoint a replacement to the board. Does AZ allow electronic meetings and, if so, would an email exchange count? It seems to me if there are only two people, exchanging emails would work fine from a practical standpoint.

If they did violate the rules or law by not having a meeting or open meeting, I would ask if there was any harm. Even if they were required to make this decision at an open meeting (as opposed to executive session), it would still be the exclusive decision of the remaining two board members. Following normal parliamentary rules, you and other members would not be part of the deliberation. In other words, the same thing would have happened.

I would call this a procedural error, which might be worth pointing out for the future but would not have changed anything if done properly.

DavidH38
(Arizona)

Posts:15


02/08/2018 6:21 AM  
Re: the harm or damage caused by not conducting a vote in a public meeting to fill the vacancy, the argument might go something like this: AZ's HOA version of the OML (Open Meeting Law) stipulates that members of the association shall have an opportunity to comment after an issue has been deliberated by the board but before the board votes. In this instance, the board would have heard comments from members questioning the suitability of this individual to serve as a board member. We heard nothing from the board president about his credentials, so we still don't know what skills, abilities, etc. he brings to the board, but he was overheard saying just before the meeting started that in all the many years he has lived in the condo, this was the first board meeting he has ever attended. The implication is that he was chosen to be a "yes man" appointee.

Re: ability to appoint or not, our HOA Bylaws state: "Vacancies on the Board caused by any reason other than the removal of a Director by a vote of the Members shall be filled by vote of the majority of the remaining Directors..."
AugustinD


Posts:675


02/08/2018 8:21 AM  
Posted By DavidH38 on 02/08/2018 6:21 AM
Re: the harm or damage caused by not conducting a vote in a public meeting to fill the vacancy, the argument might go something like this: AZ's HOA version of the OML (Open Meeting Law) stipulates that members of the association shall have an opportunity to comment after an issue has been deliberated by the board but before the board votes.


Until I read the above, I was going to way, "no harm, no foul, not worth the trouble." But assuming the above is true, now I agree with you that this should be pursued. Start gently and then progress to a letter of demand to cease including the unlawful appointee as a board member and to have a meeting that discusses prospective appointees. Furthermore, the Board needs to announce there is a vacancy and let others apply, all in open meeting. Get as many members as possible to sign the demand letter.
KerryL1
(California)

Posts:4791


02/08/2018 8:30 AM  
Knowing AZ has open meeting requirements, and that Owners may comment on each & every agenda item, and seeing Davis's citation of those laws, the remaining directors were entirely in the wrong to select a new director in secret behind the backs of Owners.

These are what David needs to cite to the current Board, perhaps at the next open meeting. He also should write to the board with the citations. I like Augie's a idea to get as many signatures as possible on on the letter.

Common courtesy would suggest that the board put out a call for candidates so that anyone could apply, but I don't know if that's a law in AZ.
SheliaH
(Indiana)

Posts:2084


02/08/2018 8:33 AM  
You're correct that appointment of anyone to the Board should be done in an open board meeting AND board member #3 should have submitted a formal resignation to the board.

You've made your objections noted to him during your coffee meeting, but since the guy won't listen, I'd suggest bringing it up in an OPEN board meeting. Don't get personal, simply say certain things need to be done in the open so the board can avoid charges of collusion, conflicts of interest and all that stuff. Homeowners should also know who sits on the board, what they bring to the table and why they want to serve in the first place.

To make things interesting, invite as many of your neighbors to attend - you can and should make your arguments in a professional and cordial manner. From there, let's see what the president and this new board member have to say in front of everyone. Peer pressure and lots of it may be the only way to get this president to behave and it's a good way to remind the other board members (including you) there's a right and wrong way of doing things - always strive to do the right thing.
JeffT2
(Iowa)

Posts:355


02/08/2018 8:59 AM  
However,

Assuming the association is incorporated, the AZ nonprofit Act allows action without a meeting. Emails are electronic transmission, which is also allowed by the nonprofit act.

Was there a meeting? No, there was no meeting.

This was action without a meeting.

Does the open meeting law apply? No, because there was no meeting.

This action appears to be valid action without a meeting.

I agree with others that it should be done at an open meeting, but it appears valid without a meeting.
KerryL1
(California)

Posts:4791


02/08/2018 11:10 AM  
But....is action without a meeting permitted only in emergencies in AZ? I don't know the answer, but we have AZ posters who probably do.

However "valid" this sneakiness may have been, the optics are very bad and can only arouse Onwers' distrust.
RichardP13
(California)

Posts:2346


02/08/2018 11:19 AM  
AWM, Action Without a Meeting, except in an "emergency" was done away ONLY in California.
DavidH38
(Arizona)

Posts:15


02/08/2018 7:20 PM  
Thanks, EVERYBODY, for your thoughtful feedback and suggestions! The issue has been resolved. I'll tell you about it in a minute, but first, a comment re: the AZ non-profit corporation law allowing voting and business outside a formal meeting, etc. I had checked with a lawyer who specializes in HOA law a few weeks ago about a host of issues related to this same board's issuing a restated and revised CC&Rs document for a vote that is a wholesale makeover of the current CC&Rs and that is riddled with problems, big and small. In my meeting with the lawyer he confirmed that the AZ Condominium Act trumps the Non-Profit Corporation Act on the matter of the board conducting business during meetings.
ARS§10-3701(F) from the non-profit corporation act states about the board conducting business outside of meetings: " Notwithstanding this chapter, a condominium association shall comply with title 33, chapter 9." This is the AZ Condominium Act statute, requiring business to be conducted in meetings open to members of the association (with few exceptions.

Also, re: board emergency meetings, AZ law permits emergency meeting of the board for issues that cannot wait for the otherwise required 48-hour posting regulation. But minutes of that emergency meeting need to be read and approved at the next regular meeting of the board. Needless to say, the two board members who did their business via email to appoint a new board member did not describe it as an emergency meeting, nor did they present minutes of such an emergency meeting at the regular board meeting.

News flash: Apparently, I DID get through to the board president and he DID consult with the association's attorney about the law, because at tonight's board meeting, the board president had a do-over – he conducted a formal vote per Robert's Rules to fill the director vacancy! Now the new guy is official and I'm satisfied that the Association will not suffer any potential legal jeopardy due to having someone in the role of director who was not properly voted on to the board! The rest of the issues, including opening the position to others, etc. is something that will come up again at the annual member's meeting in April, when the new board member will once more have to be elected to the board (per the Bylaws). Thanks again for your comments!

Now that I have your attention – if you dare – look for my next posting (coming shortly) about the latest board snafu: They just changed the annual members' meeting from March to April. New legal jeopardy?
BenA2
(Texas)

Posts:180


02/08/2018 7:37 PM  
These are all good points and the board should have known and followed the law, but the mistake has been made, so what remedy are we looking for? The two board members can decide to correct the issue by having a meeting to appoint the new board member, which might be the best course of action or the members could sue and have a judge set aside the appointment and order them to do it the right way. The third option, which I'm sure most of us have seen, is to educate the board members of the procedure that is required by law, recognize that they are volunteers who probably had no ill intent and offer to help draft a policy so future boards don't make the same mistake.

In the end of each scenario, Phil will still be the new board member.
DavidH38
(Arizona)

Posts:15


02/08/2018 7:47 PM  
Re: board training: In my email to and meeting with the board president, I urged him and the rest of the board to seek the training you describe. I even provided a web link to a series of FREE HOA board training workshops conducted by expert lawyers being sponsored by the City of Scottsdale. I've been to two workshops and will attend a third (on how to conduct a proper board meeting) next week. I'm disappointed that none of our board members are attending, even though the workshops are free and are here in our own town!
SheliaH
(Indiana)

Posts:2084


02/09/2018 6:57 AM  
I used to push board education often when I served, but as you can see, people will only take time to do the things they really care about. Sometimes it's not that they don't care, but their schedules are packed with everything else, so if there's something that they aren't required to do, they won't do it.

Good for you to attend training - in the end, you can only be responsible for what you do, so keep pursuing the knowledge. It'll make you a more effective board member and people will notice if it's rubbing off. Pass along what you've learned to your colleagues as well - you never know what and when things will stick.
AugustinD


Posts:675


02/09/2018 7:05 AM  
Posted By DavidH38 on 02/08/2018 7:47 PM
I even provided a web link to a series of FREE HOA board training workshops conducted by expert lawyers being sponsored by the City of Scottsdale.



That's neat that the City is sponsoring this. With whom are these 'expert HOA lawyers' affiliated? By any chance would it be CAI, https://www.caionline.org/pages/default.aspx?
RichardP13
(California)

Posts:2346


02/09/2018 8:36 AM  
Posted By AugustinD on 02/09/2018 7:05 AM
Posted By DavidH38 on 02/08/2018 7:47 PM
I even provided a web link to a series of FREE HOA board training workshops conducted by expert lawyers being sponsored by the City of Scottsdale.



That's neat that the City is sponsoring this. With whom are these 'expert HOA lawyers' affiliated? By any chance would it be CAI, https://www.caionline.org/pages/default.aspx?



My CAI chapter provides free training, and from research, it is the most extensive in the country.
KerryL1
(California)

Posts:4791


02/09/2018 8:47 AM  
Kudos to you for learning important things about HOAs in AZ. It takes some effort, but is worth it. Sad to say, many if not most board members in my HOA would take advantage of free educational programs.
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