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Subject: When no HO's volunteer as directors
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RichardB37
(South Carolina)

Posts:29


03/03/2019 5:19 AM  
I am curious what happens to a Property Owners Association common property when/if not enough home owners step up to participate in the Board such that a Directors quorum cannot be met. We are in a situation where one Board member is driving everyone else away from participating by their bully tactics. I anticipate that we will lose three Board members at the end of the year out of five. All Directors have renewed terms unopposed over the past ten years. The one Board member acting out came on about six years ago. Removal would require 51% of membership... with nonresponsive membership, simply not going to happen. Hence, my original scenario. What would happen to the Common Property?

TimB4
(Virginia)

Posts:16382


03/03/2019 7:38 AM  
The common property will remain as it always has.

If there are no volunteers to serve, technically the existing board members remain unless they resign.

If all are going to resign, someone would need to file with the court for receivership (not recommended). In receivership, an individual or MC is appointed by the court to run the Association. This individual reports to the court (not the membership). Assessments will go up to pay the receiver (as it will be ordered by the court). Assessments may go up to fund reserves or repair anything the receiver feels needs to be done (as the court will order it to happen). Sales of units will likely fall as buyers become aware that the Association is in receivership.

Better option, get the word out that volunteers are needed and that individual needs to be off the board (either by recall or by not reelecting).
GeorgeS21
(Florida)

Posts:1243


03/03/2019 8:13 AM  
Tim,

Very nice explanation!
SheilaJ1
(South Carolina)

Posts:93


03/03/2019 8:37 AM  
What is the bully doing exactly that is driving them away?
RichardB37
(South Carolina)

Posts:29


03/05/2019 11:33 AM  
Regarding the statement that directors remain directors until they resign, or are opposed on a ballot... Is there language in the State of SC HOA guidance that describes this? This has been one point of contention with the single director. They insist that a quorum is required to renew a director, opposed or unopposed, at the end of a term.

@ Sheila... This director has had a history of being confrontational in the neighborhood. Within our Association, they intimidate by escalating even otherwise simple discussions into arguments if not outright confrontations. Point / counterpoint escalates volume of the discussion. This individual has stomped out of more than one meeting if they are not getting their way. I, personally, have been challenged to fistfight this director over rule amendments that were being discussed that apply to the Common Property. We usually spend most of the alloted hour for a meeting arguing about interpretations of ByLaws. We do not have an attorney on retainer. The retainer for an attorney would run nearly 50% of our small operating budget.
AugustinD


Posts:1785


03/05/2019 11:47 AM  
You know what's harder than getting together 51% of the membership to recall a director? Going to court to seek an order to re-instate a director, because the other directors are freezing the first director out, due to the one director's disrupting board operations.

In other words, if this one director is disrupting operations of the board, cease to inform him when board meetings are. Send him no emails. Have a board majority instruct the manager to do same. As needed, have the HOA attorney send a cease and desist letter to the rogue director.

What I wrote above assumes that the rest of the board is truly following state law and the governing documents (with the one exception above). That is, I am assuming the one director is a bona fide rogue, and not the other way around.
ND
(PA)

Posts:310


03/05/2019 12:15 PM  
Posted By AugustinD on 03/05/2019 11:47 AM
You know what's harder than getting together 51% of the membership to recall a director? Going to court to seek an order to re-instate a director, because the other directors are freezing the first director out, due to the one director's disrupting board operations.

In other words, if this one director is disrupting operations of the board, cease to inform him when board meetings are. Send him no emails. Have a board majority instruct the manager to do same. As needed, have the HOA attorney send a cease and desist letter to the rogue director.

What I wrote above assumes that the rest of the board is truly following state law and the governing documents (with the one exception above). That is, I am assuming the one director is a bona fide rogue, and not the other way around.



This is an excellent suggestion . . .

Sounds like this one director has sufficiently ostracized himself from the community and the rest of the Board. Seems like a rather simple solution to get a majority of what's left of the Board (assuming quorum can still be achieved) to agree to do business without his involvement and work toward his outright removal . . . at minimum, removing him from whatever officer position he may be filling.

Unfortunately if the majority of the Board instead quits/resigns, they forfeit any advantage that their collective decisions may have over this single individual, and they and the rest of the community will be at the mercy of whatever decisions this individual decides to make regardless of the legality of those decisions. Easier in my opinion to prevent a decision from happening in the first place rather than fight to reverse a decision once made.
JohnC46
(South Carolina)

Posts:8434


03/05/2019 12:22 PM  
Richard

Typically a Quorum is required at the Annual Meeting in order to have a BOD Election. If no Quorum the existing BOD stays in place until the next election.

It does take a 51% majority of owner to remove a BOD Member elected by the owners.

It does take a majority vote of the BOD (and the BOD alone) to remove a Director appointed by the BOD.
JohnC46
(South Carolina)

Posts:8434


03/05/2019 12:23 PM  
Posted By JohnC46 on 03/05/2019 12:22 PM
Richard

Typically a Quorum is required at the Annual Meeting in order to have a BOD Election. If no Quorum the existing BOD stays in place until the next election.

It does take a 51% majority of owner to remove a BOD Member elected by the owners.

It does take a majority vote of the BOD (and the BOD alone) to remove a Director appointed by the BOD.




ADD ON

Time for your BOD to grow a pair.
SheilaJ1
(South Carolina)

Posts:93


03/05/2019 5:51 PM  
Posted By AugustinD on 03/05/2019 11:47 AM
You know what's harder than getting together 51% of the membership to recall a director? Going to court to seek an order to re-instate a director, because the other directors are freezing the first director out, due to the one director's disrupting board operations.

In other words, if this one director is disrupting operations of the board, cease to inform him when board meetings are. Send him no emails. Have a board majority instruct the manager to do same. As needed, have the HOA attorney send a cease and desist letter to the rogue director.

What I wrote above assumes that the rest of the board is truly following state law and the governing documents (with the one exception above). That is, I am assuming the one director is a bona fide rogue, and not the other way around.



Very bad advice on the 2nd paragraph. Never take this route.

What happens if the next volunteer is the same way? Isolating never works in an HOA, that will get you in more legal trouble especially if their interpretation was correct or if you attempt to hide actions taken without them knowing. I suggest working with them, ask them if they will pay for the attorney time if their interpretation is wrong or let the members pay it, eventually they’ll get voted out anyway if the bills are high enough.

It’s sad people come on this forum and try to play the victim when in realty it is them that is bullying since they have like minded directors on their side even if their interpretations are wrong which in this case it may very well be. No matter what spend some money get the lawyer opinions and use them moving forward. That should put them at ease.
ND
(PA)

Posts:310


03/06/2019 5:58 AM  
Posted By SheilaJ1 on 03/05/2019 5:51 PM
Posted By AugustinD on 03/05/2019 11:47 AM
You know what's harder than getting together 51% of the membership to recall a director? Going to court to seek an order to re-instate a director, because the other directors are freezing the first director out, due to the one director's disrupting board operations.

In other words, if this one director is disrupting operations of the board, cease to inform him when board meetings are. Send him no emails. Have a board majority instruct the manager to do same. As needed, have the HOA attorney send a cease and desist letter to the rogue director.

What I wrote above assumes that the rest of the board is truly following state law and the governing documents (with the one exception above). That is, I am assuming the one director is a bona fide rogue, and not the other way around.



Very bad advice on the 2nd paragraph. Never take this route.

What happens if the next volunteer is the same way? Isolating never works in an HOA, that will get you in more legal trouble especially if their interpretation was correct or if you attempt to hide actions taken without them knowing. I suggest working with them, ask them if they will pay for the attorney time if their interpretation is wrong or let the members pay it, eventually they’ll get voted out anyway if the bills are high enough.

It’s sad people come on this forum and try to play the victim when in realty it is them that is bullying since they have like minded directors on their side even if their interpretations are wrong which in this case it may very well be. No matter what spend some money get the lawyer opinions and use them moving forward. That should put them at ease.




This is silly . . .
Sheila, you asked Richard what the bully was doing that was driving people away. Richard explained with a few solid examples of this bully's unacceptable behavior within the neighborhood in his dealings with other Board Members. Obviously if Richard is fabricating things, then shame on him and any advice given wouldn't be applicable to whatever the situation actually is. However, I'm taking Richard's word that the bully is acting in the manner he described. I'm sure people over time have tried to work with this individual, but what's happening now is the end result of dealing with an impossible individual. Doing the same thing over and over and expecting a different result is insane. This bully won't change, so it's unlikely that continued attempts to work with them, will have any different results.

The best solution is as John put it . . . for the rest of the "BOD to grow a pair" and realize that their collective input and decision-making will quickly shut down and negate any decision or input of the lone bully. But I do understand that the simpler solution for many is to just eliminate this unneeded drama from their lives by resigning. Unfortunately that leaves the fate of the HOA in the hands of the bully.
RichardB37
(South Carolina)

Posts:29


03/06/2019 5:59 AM  

@ TimB4

Thank you for this insight. You're right... I never considered that the Common Property would/could go into receivership. Expensive proposition, for sure. A scenario that will be avoided in our case (somehow!)

Re recruitment of volunteers... absolutely! Ours is a street association. Homes are beginning to turn over as a result of 'maturing' residents moving into other types of residences where there is less maintenance. Ideally, we could recruit two or three new members who have not served on the Board before who could learn the operations of the Board and then move into Officer positions. I wish that I would have had such background. It would have been helpful.

@ AugustinD Ironically, one of the sore spots with this director is that previous Boards did not follow many ByLaw procedures, and now by using the ByLaws as a script to run meetings, propose projects, and collect votes, it is many times a source of friction.



@ JohnC46 I don't see anywhere that our ByLaws distinquish between a director elected by the owners from one appointed by the BOD. Is there SC language that describes this or is this from your association ByLaws?

re grow a set... Maybe... What I thought I was stepping up for was contributing to a collective effort to help manage the street association and the Common Property. I am likely not the right person to enter the Mixed Marshall Arts ring to settle disagreements. Disagreements are a part of life. Most can, and should be, solved by respectful discussion, weighing the potential outcomes, and having the majority determine this path forward (in the case of a board)


@ SheilaJ1 If your comment about playing a victim is directed at me, I don't feel like a victim. I am at the point of just trying to leave the Board in a place to serve the neighborhood going forward. One option I've considered is just leaving... but then, nothing changes on the Board. I still may do this. As a volunteer, I've served my time (sentence?). I showed up at my first association meeting, and left as a Board member, then 'assigned' the President office. I didn't move into this neighborhood for this kind of drama. Again, if this is all what HOA boards are about, I am not a good fit for this. There is another Board Meeting coming up. This would be a good time to discuss retaining an attorney for guidance and interpretation. The issue being, of course, the significant money involved.



Thanks for your insights on this. It really does help give me some perspective.
RichardB37
(South Carolina)

Posts:29


03/06/2019 6:10 AM  
@ ND I only wish Richard was making this up. That way I would have a solution that I could implement. Boom! No more problem. No, this is very real. Again, I am now torn between what is best for the neighborhood, and what is best for me. Selfish, maybe... but the latter is what I control, not the former.
AugustinD


Posts:1785


03/06/2019 7:54 AM  
Posted By SheilaJ1 on 03/05/2019 5:51 PM
Isolating never works in an HOA...


Nonsense. From reading just here and witnessing this practice at HOAs, isolating is used routinely and successfully to shut down directors who are not doing as the board majority wishes. For a board that is truly following the law, the best part is that the HOA attorney will do as the Board wishes, twisting the facts around to put the one director on the defense and cautioning him or her to behave, pursuant to law, or else.

I have yet to read of a case where a single director successfully won a case to get the board to keep him in the loop et cetera.

On the other hand, RichardB37 has since posted new information, suggesting the board majority is the one not following the Bylaws. As is common, too many egos, with too little experience and smarts, may be involved here.


SheilaJ1
(South Carolina)

Posts:93


03/06/2019 11:31 AM  
Yep, looks that way, too many egos, they need an attorney now. The OP is a victim and about to quit instead of spending some money to fix the issues. So the question is will the directors get the attorney to caution the rogue director or get opinions on the bylaws? The attorney will figure it out right away what the real deal is. The author came for sympathy but instead we got the truth.
RichardB37
(South Carolina)

Posts:29


03/06/2019 11:59 AM  
The OP came to see what would happen to the Common Property in the absence of a quorum of directors, which was answered... quickly. And the resulting scenario needs to be avoided.
GenoS
(Florida)

Posts:3048


03/06/2019 1:24 PM  
Posted By SheilaJ1 on 03/05/2019 5:51 PM
Very bad advice on the 2nd paragraph.

Agreed on that point. The purpose of giving notice of a Board of Directors meeting is to give notice TO THE DIRECTORS. Not giving all board members notice of the meetings, on purpose, sounds like a really bad idea.
JeffT2
(Iowa)

Posts:476


03/06/2019 1:37 PM  
The President (that's you?) can do a lot to get your board meetings back on track. Look up articles on how to run a meeting. Set an agenda in advance, recognize only one speaker at a time, keep speakers on topic, keep to the schedule, get a gavel, etc. Your bully wants to use the bylaws to run meetings, so go for it.

Have your materials organized and distributed in advance to cut down on discussions in the meeting.

And listen to the bully's ideas (not the presentation).

The board can also set up committees and delegate research, discussions, and responsibilities to committees and/or to officers. This will remove some of the drama from the board meetings to the committees/officers, which do not have to include the bully.
KerryL1
(California)

Posts:6418


03/06/2019 2:37 PM  
I'm with Jeff. What size is your "street" HOA? Does that mean your HOA is only one street? Are the houses on both sides of the street the HOA's?

Have your board vote on some of Jeff's ideas. There are good examples:

Agenda items and their justification must be submitted in writing to the prez or sec'y 10 days before your monthly board meetings. If they require documentation, that documentation must be included in the agenda item.

The agenda and accompanying materials should be distributed at least 4 days before the meeting.

Only the meeting chair (usually the prez) recognizes speakers from among the Board, who must speak only to the agenda item. The chair must be fair & impartial in this regard. Speakers must be limited to two minutes the first time they speak, and one minute for a second time after all others have spoken.

There must be motions and votes. The wording on approvals must be in the minutes.

Richard, can you tell us the kind of bylaw topics that could possibly be discussed at board meetings???

RichardB37
(South Carolina)

Posts:29


03/07/2019 4:10 PM  
This HOA is one of three interconnected HOAs in the neighborhood. This one contains 44 homes. There is a shared dock at the end of the street for use of the residents on this street. This HOA manages the Common Property where the dock is located.

The largest of the three HOAs covers 400 homes. This HOA serves as a Civic Association for the entire 400 home subdivision.

The final POA manages a 20 acre lake that abutters have access to. Half of the homes which share the dock also have access to the freshwater lake.
RichardB37
(South Carolina)

Posts:29


03/07/2019 4:16 PM  
The ByLaw topics that come up usually have to do with how the association has always done things, which are not usually following what is prescibed by the ByLaws. I was never briefed on how business was conducted previously, and have tried to follow the processes provided for in the ByLaws. At times by doing this, it creates interpretation discussions of what the right process is.


We do circulate the meeting agenda ahead of time.
KerryL1
(California)

Posts:6418


03/07/2019 6:17 PM  
Thanks. We have about 21 pages of bylaws, but rarely have to refer to them. That's why I asked what issues arise from yours?? Is it how to vote? Or who presides? Or definition of a quorum? I just can't think of what might come up meeting after meeting related to the bylaws.
KellyM3
(North Carolina)

Posts:1396


03/08/2019 8:49 AM  
Posted By RichardB37 on 03/03/2019 5:19 AM
I am curious what happens to a Property Owners Association common property when/if not enough home owners step up to participate in the Board such that a Directors quorum cannot be met. We are in a situation where one Board member is driving everyone else away from participating by their bully tactics. I anticipate that we will lose three Board members at the end of the year out of five. All Directors have renewed terms unopposed over the past ten years. The one Board member acting out came on about six years ago. Removal would require 51% of membership... with nonresponsive membership, simply not going to happen. Hence, my original scenario. What would happen to the Common Property?





If there are any board members left and nobody chooses to fill the board seats adequately, I'd advise the remaining the members to simply manage the property and keep it up. There should be no major capital upgrades or additions but the dues payers are obviously fine w/ the current board's management by being silent and some may step forward.

But, don't freeze up because the community doesn't volunteer.
RichardB37
(South Carolina)

Posts:29


03/08/2019 9:23 AM  
Thanks to all for the many words of advice.

One reason our discussions get somewhat 'cyclical' is that we meet twice for scheduled meetings as a Board, and add any Special Meetings as needed. Progress is sometimes slow on the projects we discuss, so the same projects come up at multiple meetings. Discussions circle back to the previous meeting. I do not know if this is an issue on just our Board or not, but it has been difficult to get closure and deliverables from the people who raise their hand to take on a task.

I will initiate a conversation at the next Board meeting in a couple of weeks to attempt to get buy in on how we want to run... by the ByLaws, or if there are alternate approaches. From my way of thinking, alternates should mean initiating a revision of ByLaws.
SueW6
(Michigan)

Posts:503


03/10/2019 7:37 AM  
Richard
Don’t think your board has to DO everything, but it has to be sure things get DONE.

Set up committees that can meet and hammer out details on these projects. Pull in non board members, plus 2 board members to be on these committees. They are advisory, only. This committee reports its findings to the board, and Then they report to board, and a vote can be taken.

Your bylaws should outline how to get rid of an officer on the board, and then how to recall a board member. General rule is that whomever placed them in position, can remove them from that position. General rule is majority needed by vite of the board to relieve an officer, but s super majority vote of the Members is needed to remove a biard member.

Your state non profit laws can fill in info if you cant find it in the bylaws; Roberts Rules also has guidelines to use.

Consider having s parliamentarian at the meetings if all this is overwhelming.
RichardB37
(South Carolina)

Posts:29


03/10/2019 8:52 AM  
SueW6
Thanks for the great ideas. One of the things we will concentrate on at the upcoming Board meeting is how to get neighborhood committees formed and involved in projects.
More to come...
TimB4
(Virginia)

Posts:16382


03/11/2019 8:13 PM  
Posted By RichardB37 on 03/05/2019 11:33 AM
Regarding the statement that directors remain directors until they resign, or are opposed on a ballot... Is there language in the State of SC HOA guidance that describes this?




If not answered, this is typical language within corporate law.
TimB4
(Virginia)

Posts:16382


03/11/2019 8:20 PM  
See: South Carolina Nonprofit Corporation Act

Specifically (emphasis added):

SECTION 33-31-805. Terms of directors generally


(2) the term of a director filling another vacancy expires at the end of the unexpired term that such director is filling.

(d) Despite the expiration of a director's term, the director continues to serve until the director's successor is elected, designated or appointed, and qualifies, or until there is a decrease in the number of directors.
RichardB37
(South Carolina)

Posts:29


03/12/2019 6:21 AM  
TimB4...

Thank you! This is exactly the reference that I was looking for. Very helpful.
JohnC46
(South Carolina)

Posts:8434


03/12/2019 7:54 PM  
33-31-805

(c) Except as provided in the articles or bylaws:

(1) the term of a director filling a vacancy in the office of a director elected by members expires at the next election of directors by members; and

(2) the term of a director filling another vacancy expires at the end of the unexpired term that such director is filling.

(d) Despite the expiration of a director's term, the director continues to serve until the director's successor is elected, designated or appointed, and qualifies, or until there is a decrease in the number of directors.

Typical SC as per (c).
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