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Subject: A Board with no Quorum
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MichaelB32
(California)

Posts:136


01/11/2019 8:52 AM  
Last night our board membership was reduced to two members for our five man Board as the President resigned. Over the period of the election cycle, three members had resigned with one other member appointed. With the Presidents resignation, we have only two members on the the Board, one who was appointed and one who was elected. At this point, we are without a quorum and one of the Board members was appointed. Do we still have a Board that meets quorum requirement to approve funding and is it still legal? My HOA is in California.


Michael Barto
[email protected]
RichardP13
(California)

Posts:3650


01/11/2019 9:27 AM  
No, you no longer have a governing body and only minimum actions can be taken, such as paying utility bills. It also put a management comany in a very precarious situation situation as they could be overstepping their authority per their contract.

Been there, Done that
SheliaH
(Indiana)

Posts:2565


01/11/2019 11:08 AM  
It can also put the association into a really really bad situation because you don't have a board to make decisions affecting the association (like approving the budget). It's too bad some sort of effort wasn't made to get more people before the board shrank to three people. Even three can get burned out quickly and even if they don't, life happens and someone may find he or she has to leave the board, so you need people who can carry on as necessary.

Time to toss some firecrackers under the backside of your neighbors so they can understand what's at stake. If you're on the board (such as it is), you and your colleague might want to write a very strongly worded letter to the membership telling them about receivership because that's exactly where your association is heading if you don't find at least one more person to create a quorum so the board can do its business. There are other conversations on this website about receivership - I won't go into all of them here, but let's just say if things get to that point, you and your neighbors are in for a big world of hurt in the pocketbook.

The remaining board shouldn't hesitate to say if at least one person (preferably 3) don't step up to help, the next thing they will do is talk to the association attorney about petitioning a court for receivership. Give a deadline and then pull the trigger if someone doesn't wake up. By the way, if you're not on the board, this may be your cue to be among the first to offer your assistance.
DouglasK1
(Florida)

Posts:1419


01/11/2019 12:20 PM  
Posted By RichardP13 on 01/11/2019 9:27 AM
No, you no longer have a governing body and only minimum actions can be taken, such as paying utility bills. It also put a management comany in a very precarious situation situation as they could be overstepping their authority per their contract.


In CA, can the remaining directors appoint new directors? In Florida they can. From FS 720:
Unless otherwise provided in the bylaws, any vacancy occurring on the board before the expiration of a term may be filled by an affirmative vote of the majority of the remaining directors, even if the remaining directors constitute less than a quorum, or by the sole remaining director. In the alternative, a board may hold an election to fill the vacancy, in which case the election procedures must conform to the requirements of the governing documents. Unless otherwise provided in the bylaws, a board member appointed or elected under this section is appointed for the unexpired term of the seat being filled. Filling vacancies created by recall is governed by s. 720.303(10) and rules adopted by the division.

Escaped former treasurer and director of a self managed association.
JohnC46
(South Carolina)

Posts:8434


01/11/2019 12:39 PM  
Michael

While I should avoid CA stuff, typically the remaining two BOD Members could agree to appoint another to the BOD thus establishing a Quorum. They would both have to agree on the person. Then 2 of 3 can appoint a 4th and so on to bring the BOD to full strength.

It then becomes a question of do those appointed serve until the next election or serve the remaider of the term of the person they are replacing.

This is a common occurrence.
RichardP13
(California)

Posts:3650


01/11/2019 12:44 PM  
Posted By DouglasK1 on 01/11/2019 12:20 PM
Posted By RichardP13 on 01/11/2019 9:27 AM
No, you no longer have a governing body and only minimum actions can be taken, such as paying utility bills. It also put a management comany in a very precarious situation situation as they could be overstepping their authority per their contract.


In CA, can the remaining directors appoint new directors? In Florida they can. From FS 720:
Unless otherwise provided in the bylaws, any vacancy occurring on the board before the expiration of a term may be filled by an affirmative vote of the majority of the remaining directors, even if the remaining directors constitute less than a quorum, or by the sole remaining director. In the alternative, a board may hold an election to fill the vacancy, in which case the election procedures must conform to the requirements of the governing documents. Unless otherwise provided in the bylaws, a board member appointed or elected under this section is appointed for the unexpired term of the seat being filled. Filling vacancies created by recall is governed by s. 720.303(10) and rules adopted by the division.



Can they appoint, YES.

Two problems, one are there willing people to step up and second, and more importantly, does the membership know there is an issue?

Been there, Done that
GenoS
(Florida)

Posts:3048


01/14/2019 2:24 AM  
DouglasK1 is right about Florida. I'll just add that ANY member of a Florida HOA can post a notice announcing his or her intention to petition a court for receivership. Once posted, there's a 30-day waiting period and after that the homeowner can go ahead with his or her petition.
MichaelB32
(California)

Posts:136


01/18/2019 7:39 PM  
I thanks you all for your comments. Yes, I believe that the first thing is that a new BOD appoint a new members. The courts would probably accept.

Thanks you very much for you idea and suggestions

Michael Barto
[email protected]
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