Term Limits for Board Members

I have been asked to include a provision in draft legislation in Indiana that would require term limits for board members as one way to deal with rogue and abusive boards and to stimulate greater participation.

I am concerned that even well drafted provisions in this area would lead to all sorts of unintended consequences.

Does anyone have any experience with terms limits for board members?

Advice and council will be appreciated.

Thanks, Bruce. I appreciate your quick response.

I think I need to improve my search skills. I did search for "term limits" and came up with nothing. I have to go into advanced search mode to match the exact phrase I am looking for--rather than use the Google quote approach--I discover.

Our legislative research service has been digesting all of the existing state statutes as part of the drafting process over the past three years. They (and I)are researching case law as well. There is a lot going on currently that deals with homeowners association law.

The NCCUSL draft and its adoption in other states has turned out to be fraught with problems. Were we to use it as a model we would be importing all the horrors and issues that exist elsewhere. We want--and can--to do better than that.

What may be a better approach for uniformity is a uniform Declaration of Covenants, rather than the overarching statutes. Inconsistencies and unenforceable provisions in covenants are legion.

It looks like the AARP may have a handle on the best approach to model legislation. I am getting nothing by praise for it from my colleagues across the country (except from Texas). AARP released their contribution to the area in 2006. I am not a fan of AARP (nor of CAI), but sometimes they are right on target.

As your so accurately observe, unintended consequences that stem from poorly drafted legislation is something one always must guard against. It is vital to go beyond one's personal experience. I am coming to this process with 30 years of legislative drafting experience, but I am not immune to narrow, limited vision. Heeding advice and alternate points of view has always served me well.

There is a great range of opinion posted on HOATalk, some well informed, and some not very well informed. It is both enlightening and valuable to have this forum available. (Others are not nearly as good.) I have revised my thinking (which will be reflected in the final work product)on a couple of issues based on the posting here. That, in and of itself, is worth a great deal.

I keep reading, questioning, testing, challenging, debating and learning. And I don't take it personally!

I'm trying to think what hideous shape our HOA would be in with board member "term limits."

We have a provision that says that OFFICERS may only hold the same officer position for 3 consecutive years.

Term limits, it seems to me, would not compel resident participation in any way and can be a real detriment if you do get a handful of people who can take the time to serve year after year.

It seems to me a better approach would be to make it easier for HOAs to remove rogue board members.

I'm for having term limits for OFFICERS on the Board, and that should be stated in the bylaws. (Some presidents do and some don't make general board members, if they can step down from that authority. They tend to be a wealth of history)

I'd let the Members decide what Board members to keep, year after year.

I am for rotating term-lengths at election time, so the entire Board could never be "all new."

I'm for allowing the Board to fill any vacancies, until the next election.

I'm for board members being allowed to remove any board member for certain violations, and the word, MAY, can be included in the edict. "Board members MAY remove members for missing 3 meetings without excuse."

I'm for the establishment of an Advisory Board that advises/consults the Board and brings some expertise to the Board. They don't meet, rather they are a group of volunteers that can be called on for particular circumstances; no board power or vote.

Term limits are a double edged sword: on one hand, it "cleans house"; on the other hand, it removes people who are doing a good job.

One idea might be to establish a "5 year, then one yr. off, then elegible again" type of option.

IMHO - Committees "feed" the Board; therefore, if you have good, well run Committees, then the next role for these folks is on the Board. Likewise, old Board members should be encouraged to get on a Committee. Sometimes, they just "fade away."

George,

We have 3 year Board membership terms, but also a provision that does not limit the number of terms a person can serve on the Board. Couple that with a provision(s)specifying the reasons and procedures for removing a Board member, and IMO you get the best options for keeping those willing and able, along with an out for those who are not. If possible, as has been noted, staggering terms helps insure continuity of leadership, which is a good thing.

Krik,

That is the balancing act between individual property rights and common interests. It is going to take some creating thinking and legislation.

The first approach is to require associations to have an internal appeal process, one that is independent of the board (perhaps a appeal board elected by homeowners).

The second approach is to require that before any fines can be assessed there must be mediation/arbitration.

A third approach is to require the association to seek a court order, perhaps from a magistrate or a township small claims court judge to levy fines.

Any approach has to be (1) quick and simple, (2) inexpensive, and (3) binding on the association but not on the homeowner.

One proposal that has come my way is to mandate that when a fine is assessed, the homeowners association is required to pay in the full the costs of binding mediation.

Touche! I am not advocating any of these approaches. I am just passing along the ideas that have been proposed.

Apartment owners go to small claims court to get eviction orders and judgments for unpaid rent. Maybe extending small claims court jurisdiction to include assessing fines for violations of covenants and rules is something that ought to be considered.

i thought all boards had term limits.

we call them "elections" where i come from.

and people who don't exercise their right to limit the term of the board at those times, deserve the results.

Thankfully, we've not had to deal with "term limits," so there is no story to tell here.

But after serving on the board for close to 12 years (maybe more, I'm too lazy to go look up the actual date), I can say that HAD there been term limits, we'd be in a heck of a chaotic state.

Over the years we've had one or two board members who had ulterior motives for serving, but, other than one that hung with us for close to 5 years, most of them moved on on their own when they realized it was a lot of work for no (perceivable) payoff.

I would say, all in all, we've been fortunate. But we're not so odd a bird now as we used to be. In the beginning, HOAs in this neck of the words were not as active and not as common.

Thanks to an active local metro government that works with neighborhoods to revive old associations and start new ones, and that provides yearly workshops for the logistics side of the coin, our entire community can boast many active and effective HOAs.

But I have to say, I don't know of a single one that has, or would benefit from, board member term limits.

I agree that term limits is not a good idea but having a separate appeal committee is. I believe this is already in a one state's laws but I can't remember which one.

Hey folks,

What an incredible discussion! Lots of good thinking here, even though we have gotten off topic.

The reality of our world is that participation in the affairs of a homeowners association (and in government)is, more often than not, dismally low. Despite what we want, and despite the ideals of the law, reality trumps everything else.

As a result, it opens up the system for abuses by association governing bodies and by individual homeowners themselves.

How can we deal with this reality in drafting new legislation? Ignoring it only perpetuates the potential of abuses. Is there a way by statute to recognize or accept that only a few people will participate, and, at the same time, create a workable balance between individual property rights and common interests. Maybe so; more likely not.

We can't protect people from their own folly. Yet, long established public policy that has the force of law in adjudicating cases, says we need to do something.

(I am actually not in favor of term limits by statute. Such things are best left to bylaws.)

George a small HOA near here actually has it in the documents that all owners must take a turn serving on the BOD. The only way out is to sell before your turn comes up. Wouldn't work in as a law but something small HOA's mite consider.

Another off topic point but a prior posting just flashed into mind. This woman was upset because she couldn't serve on the BOD because her name wasn't on the deed. Ohio COA law specifies owner or spouse or if owned by a corporation an agent of said corp. You might include something on who is eligible to serve.

Brian hit it on the head....owner apathy is to blame, maybe instead of looking at term limits we should be examining ways to make homeowners exercise their right to vote....perhaps fining them or taking away their amenity privileges.

As a board member I had to be re-elected and unless your association has some weird 10 year term most members are elected for 1-2 years.

Another section I have been asked to include is a process for the Secretary of State to serve as trustee of the assets of a homeowners association which becomes inactive or defunct due to board resignations or lack of board membership. Membership apathy is a genuine problem.

It is not clear what should be the trigger for such a trusteeship to kick in.

A situation in which all board members resign or lost eligibility to serve (moved away) has actually occurred. It took action by the Secretary of State to petition the court to appoint a trustee to supervise a new election--quite expensive for the homeowners.

Does anybody have any experience with this kind of situation? How was it handled?

The Arizona situation is an interesting one--lots of conflict in the past which resulted in the Office of Administrative Hearings appeal process.

I doubt that Indiana would go for another supervisory/ regulatory commission.

However, there is precedent for the Office of Consumer Affairs in the Attorney General's office being involved.

Question: Any thoughts about "taxing" (i.e., assessing an annual registration fee for) homeowners associations in order to pay for oversight by the Office of Consumer Affairs? I think such a fee would be the only way it would fly. It would also galvanize a lot of opposition.

Such a fee would most likely be based on the number of members.

Montgomery Co. MD has the Commission on Ownership Communities. I believe the fee is $2.25/unit/year. It's an all volunteer commission and I believe it's been quite successful over the years. They also provide training for members and board members.