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Subject: Conflict With Removal of Director(s)
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SamB5
(Florida)

Posts:29


04/11/2018 8:58 AM  
Hello,

We have 15 homes/properties in our association and we have a 5 member Board of Directors. Our Bylaws were changed at a point in time (not sure when) to require a 75% vote of the Majority of all votes of the Members to remove and Director or the entire Board of Directors.

If I am understanding that correctly we would need 12/15 members to approve the removal of a Director. Meaning that at least 2 of the 5 Board members would have to vote on the removal of a fellow Director or the removal of the entire board.

Or am I not reading it correctly?

Are small communities typically run this way? I would think that a Board should be able to be removed without requiring votes from the Board itself.

Thanks in advance.
AugustinD


Posts:1082


04/11/2018 9:05 AM  
I have not heard of removing an entire board all at once. Recall elections to remove a single board member do get proposed a lot and I think happen from time to time, based on reports here.
DouglasK1
(Florida)

Posts:1175


04/11/2018 9:57 AM  
How long are the member's terms? If they are only a year, any reason why you wouldn't just wait until the next election?

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

Posts:7635


04/11/2018 10:01 AM  
Sam

You need to check if it is 75% of all owners or just 75% of those voting for such. While a whole BOD could be recalled, typically it is only one or two. Also if a recall, their replacement must be named like replacing Mary Smith with Sam Jones.

I would also say a bOD of 5 for 15 owners is to large a BOD. Three should be sufficient.

SamB5
(Florida)

Posts:29


04/11/2018 10:13 AM  
Posted By DouglasK1 on 04/11/2018 9:57 AM
How long are the member's terms? If they are only a year, any reason why you wouldn't just wait until the next election?





After turnover the board terms were to be divided where one-third of the board served a 1 year term, one-third a 2 year term and one-third a 3 year term. After the initial term the board members would serve for 3 year terms. If you follow it out there should be an election every year. However, I have owned my property for 5 years and just built and moved in last year and I have never been notified of an election not has there been any change in the directors. However, there is also no notice given about board meetings either, so I assume they may have had an election among themselves?

The reason for the initial question is because it seems our board is not following their own rules, much less the state statutes. I have been educating myself and I have a feeling once this is known by all members that there may be a scenario where it is questioned that one or all of the Directors may not be a good fit. I don't know if we can recall an election that may not have even happened? I want to know beforehand if this is a no win scenario as I am sure not one of the board would vote against another. I am not sure if the course of action wouldn't be to try to amend the bylaw? It just seems to be awfully written and misleading as even 100% of non board members of the association could enact a call for change.
RichardP13
(California)

Posts:2902


04/11/2018 10:14 AM  
Posted By AugustinD on 04/11/2018 9:05 AM
I have not heard of removing an entire board all at once. Recall elections to remove a single board member do get proposed a lot and I think happen from time to time, based on reports here.



With the majority of Bylaws, removing the entire Board is the only option when cumulative voting is involved.
SamB5
(Florida)

Posts:29


04/11/2018 10:18 AM  
Posted By JohnC46 on 04/11/2018 10:01 AM
Sam

You need to check if it is 75% of all owners or just 75% of those voting for such. While a whole BOD could be recalled, typically it is only one or two. Also if a recall, their replacement must be named like replacing Mary Smith with Sam Jones.

I would also say a bOD of 5 for 15 owners is to large a BOD. Three should be sufficient.






I also agree that 5/15 is too many. I do worry that even at 3 it would take 100% of non board members voting to remove.

The specific wording is below, please tell me if I am reading it incorrectly. Again this is an unsigned/unrecorded copy of amendments to bylaws.

OLD

Removal of Directors. At a meeting of the Members called expressly for such purpose, and Director or the entire Board of Directors may be removed, with or without cause, by a vote of the Majority of the Members.

NEW

Removal of Directors. At a meeting of the Members called expressly for such purpose, and Director or the entire Board of Directors may be removed, with or without cause, by a 75% vote of the Majority of all votes the Members.

AugustinD


Posts:1082


04/11/2018 10:20 AM  
Posted By RichardP13 on 04/11/2018 10:14 AM
Posted By AugustinD on 04/11/2018 9:05 AM
I have not heard of removing an entire board all at once. Recall elections to remove a single board member do get proposed a lot and I think happen from time to time, based on reports here.



With the majority of Bylaws, removing the entire Board is the only option when cumulative voting is involved.


Could you explain this, maybe with an example? I don't understand.
KerryL1
(California)

Posts:5535


04/11/2018 10:32 AM  
Sam's Bylaw says: "Removal of Directors. At a meeting of the Members called expressly for such purpose, and [sic] Director or the entire Board of Directors may be removed, with or without cause, by a 75% vote of the Majority of all votes the Members."

This seems to say 75% of all who voted may remove a director so long as a majority of members vote. But maybe not???

Yes, directors, assuming they are members of your HOA, may vote, Sam.
JohnC46
(South Carolina)

Posts:7635


04/11/2018 12:18 PM  
Cumulative voting versus Bloc voting.

Most common is Bloc voting where you can not cast more then on vote per person.

Cumulative voting allows you to cast more then one vote per person.

Say a BOD has 3 people running for 2 open spots. In Bloc voting you have two votes to cast (as there are two open positions) but you cannot cast both of them for one person.

In Cumulative voting you could cast both your votes for one person.

Cumulative is most commonly used when voting your shares in a Corporate election. It has been used in public elections primarily to allow minorities to cast all their votes for one person. It is rarely used outside the corporate world.
RichardP13
(California)

Posts:2902


04/11/2018 12:25 PM  
Posted By JohnC46 on 04/11/2018 12:18 PM
Cumulative voting versus Bloc voting.

Most common is Bloc voting where you can not cast more then on vote per person.

Cumulative voting allows you to cast more then one vote per person.

Say a BOD has 3 people running for 2 open spots. In Bloc voting you have two votes to cast (as there are two open positions) but you cannot cast both of them for one person.

In Cumulative voting you could cast both your votes for one person.

Cumulative is most commonly used when voting your shares in a Corporate election. It has been used in public elections primarily to allow minorities to cast all their votes for one person. It is rarely used outside the corporate world.



What are HOAs and what rules do they generally follow? Corporate
JohnC46
(South Carolina)

Posts:7635


04/11/2018 12:29 PM  
Our original Covenants called for Cumulative voting. The acting BOD got the Declarant to remove it and several other things (like no proxies allowed to proxies allowed) before turnover.
SamB5
(Florida)

Posts:29


04/11/2018 12:34 PM  
Forgive me, but how does Bloc or Cumulative voting apply here? I believe a vote to remove would either be a yes or a no, right?
RichardP13
(California)

Posts:2902


04/11/2018 12:36 PM  
Posted By SamB5 on 04/11/2018 12:34 PM
Forgive me, but how does Bloc or Cumulative voting apply here? I believe a vote to remove would either be a yes or a no, right?



Exactly, what does your Bylaws state in this matter?
KerryL1
(California)

Posts:5535


04/11/2018 12:37 PM  
Now that we're off topic already, JohnC wrote: "Cumulative voting] has been used in public elections primarily to allow minorities to cast all their votes for one person." He's written that before and been challenged about it. So....proof JohnC?

How, JohnC & Richard, do you interpret Sam's current Bylaw?
SamB5
(Florida)

Posts:29


04/11/2018 12:42 PM  
Unfortunately it only says:

Removal of Directors. At a meeting of the Members called expressly for such purpose, any Director or the entire Board of Directors may be removed, with or without cause, by a seventy-five percent (75%) Majority of all votes of the Members.

It used to say "by a Majority of the Members." Instead of "by a seventy-five percent (75%) Majority of all votes of the Members."

DouglasK1
(Florida)

Posts:1175


04/11/2018 12:45 PM  
Posted By SamB5 on 04/11/2018 10:18 AM

The specific wording is below, please tell me if I am reading it incorrectly. Again this is an unsigned/unrecorded copy of amendments to bylaws.

OLD

Removal of Directors. At a meeting of the Members called expressly for such purpose, and Director or the entire Board of Directors may be removed, with or without cause, by a vote of the Majority of the Members.

NEW

Removal of Directors. At a meeting of the Members called expressly for such purpose, and Director or the entire Board of Directors may be removed, with or without cause, by a 75% vote of the Majority of all votes the Members.



Another question is whether the bylaw changes were done properly. What are the requirements in the original bylaws for amending? In most cases the board alone does not have that power, but it depends how they are worded.

If yours is a condo association, you could try contacting the Department of Business and Professional Regulation, see Florida Statute 718 for situations where they have jurisdiction. Even then, whether they will be useful or useless won't be known in advance.

If your is an HOA, it is governed by FS 720, and your primary recourse to violations of law and governing docs would be legal.

Escaped former treasurer and director of a self managed association.
RichardP13
(California)

Posts:2902


04/11/2018 2:06 PM  
Posted By AugustinD on 04/11/2018 10:20 AM
Posted By RichardP13 on 04/11/2018 10:14 AM
Posted By AugustinD on 04/11/2018 9:05 AM
I have not heard of removing an entire board all at once. Recall elections to remove a single board member do get proposed a lot and I think happen from time to time, based on reports here.



With the majority of Bylaws, removing the entire Board is the only option when cumulative voting is involved.


Could you explain this, maybe with an example? I don't understand.



This is a section of the Bylaws dealing with the removal of Director(s). In this instance, cumulative voting is allowed. Matter of fact, cumulative voting is in all HOA's, as it guarantees that the declarant remain in complete control of the Board while the project is being built and until completion. Seems only fair. Once finished, most experts agree that cumulative voting should be eliminated and this removal process be updated to a straight yes or no vote based on acceptable percentage of owners.

6.08. Removal from Office. Unless the entire Board is removed from office by the vote of members of the Association, no individual Board member shall be removed prior to the expiration of his term of office if the votes cast against removal would be sufficient to elect the Board member if voted cumulatively at an election at which the same total number of votes were cast and the entire number of Board members authorized at the time of the most recent election of the Board member were then being elected.
JohnC46
(South Carolina)

Posts:7635


04/11/2018 5:15 PM  
Posted By SamB5 on 04/11/2018 12:42 PM
Unfortunately it only says:

Removal of Directors. At a meeting of the Members called expressly for such purpose, any Director or the entire Board of Directors may be removed, with or without cause, by a seventy-five percent (75%) Majority of all votes of the Members.

It used to say "by a Majority of the Members." Instead of "by a seventy-five percent (75%) Majority of all votes of the Members."





Sam

It is confusing to many. Let me try and help.

We have 112 Members. 10% of our Members (12) can call a Special Meeting to replace a Director but it still requires 50% of ALL Members (56) to agree, not just 50% of the 10% that showed. No matter how many of our Members showed up at the meeting, it still takes 56 of them to recall a Director.

For example sake let us say 55 of our members attend the Recall Meeting and all 55 vote to recall. It fails. They still need 56 of ALL members and they only got 55.

Your 75% of ALL Members is 12.

Many confuse this and one word can change it either way and your postings do not clarify your situation/% required.

Recalls are very difficult and often end up in court. In your case with 1/3 (5) of ALL Members on the BOD, it would be near impossible to recall them as it leaves, at best, only 10 (2/3rds) voting to recall.

The best way to change a BOD is mount an offense/team and take them on at the Annual Meeting BOD Election. It took us two election cycles and 18 months of work to change our BOD but we did it.


JohnC46
(South Carolina)

Posts:7635


04/11/2018 5:21 PM  
Posted By KerryL1 on 04/11/2018 12:37 PM
Now that we're off topic already, JohnC wrote: "Cumulative voting] has been used in public elections primarily to allow minorities to cast all their votes for one person." He's written that before and been challenged about it. So....proof JohnC?

How, JohnC & Richard, do you interpret Sam's current Bylaw?




I see no reference to Cumulative voting in Sam's posts. I merely threw it out to clarify what Richard suggested might exist.

Let me ask you Kerri were you familiar with Cumulative versus Bloc voting? Ever vote any stock you own in a Corporation's Annual Election? If so, you Cumulative voted your shares.
RichardP13
(California)

Posts:2902


04/11/2018 5:50 PM  
Posted By KerryL1 on 04/11/2018 12:37 PM
Now that we're off topic already, JohnC wrote: "Cumulative voting] has been used in public elections primarily to allow minorities to cast all their votes for one person." He's written that before and been challenged about it. So....proof JohnC?

How, JohnC & Richard, do you interpret Sam's current Bylaw?



How did we go off topic? I have a cabinet full of Bylaws that make it near impossible to remove less than the whole of the Board IF the association has cumulative voting, which is there to ensure the declarant remains in power while the development is being built.

The OP needs someone competent to read their governing docs to give a correct answer. Unless you see all the Bylaws or CCRs.

For instance, HOA's in California think they need at least a majority of homeowners to approve a special assessment. Not so.
GenoS
(Florida)

Posts:2291


04/11/2018 9:05 PM  
Posted By SamB5 on 04/11/2018 8:58 AM
Hello,

We have 15 homes/properties in our association and we have a 5 member Board of Directors. Our Bylaws were changed at a point in time (not sure when) to require a 75% vote of the Majority of all votes of the Members to remove and Director or the entire Board of Directors.

If I am understanding that correctly we would need 12/15 members to approve the removal of a Director. Meaning that at least 2 of the 5 Board members would have to vote on the removal of a fellow Director or the removal of the entire board.

Or am I not reading it correctly?

Are small communities typically run this way? I would think that a Board should be able to be removed without requiring votes from the Board itself.

Thanks in advance.

FS 720 completely controls how a director may be removed from a Board. There's only 1 way to do it and all the Bylaws in the world won't make one iota of difference. A director may be removed from office by the majority vote of all the homeowners either by written instrument or at a meeting called for that purpose. The end. Your Bylaws are meaningless here. There are numerous arbitration decisions by the Florida DBPR that say any method or procedure to remove directors from office other than the method provided in FS 720 is null and void.
BenA2
(Texas)

Posts:525


04/12/2018 5:04 AM  
That may be a disadvantage of small HOAs but I don't think 75% to remove a director is out of line. It should not be easy to remove an elected official.

It's true that you cannot remove a director without some of the directors voting for it but they have as much right to vote on it as any other owner. I also wouldn't assume that the directors are going to always stick together.
AugustinD


Posts:1082


04/12/2018 7:36 AM  
Richard and John, thank you for the explanations. My current HOA flat-out prohibits cumulative voting. I am not sure my prior HOAs had it. The terms for the directors have been one year at all three of my prior HOAs.
KerryL1
(California)

Posts:5535


04/12/2018 8:57 AM  
JohnC you said here & in the past you know cumulative voting has been used in PUBLIC elections to benefit minorities. I certainly know about minorities in stock corps., but their elections are not public.
KerryL1
(California)

Posts:5535


04/12/2018 8:58 AM  
Looks like Geno helps a lot, Sam,
SamB5
(Florida)

Posts:29


04/12/2018 9:16 AM  
Thank you Geno. I have found the statute you mention.

(10) RECALL OF DIRECTORS.—
(a)1. Regardless of any provision to the contrary contained in the governing documents, subject to the provisions of s. 720.307 regarding transition of association control, any member of the board of directors may be recalled and removed from office with or without cause by a majority of the total voting interests.

What exactly is a recall?
TimB4
(Virginia)

Posts:15889


04/12/2018 2:44 PM  
A recall is a formal vote by a membership to remove an individual from the position they were elected to.

A recall would require a meeting of the members, with proper notice.
Typically, a recall is initiated by the membership through the use of a petition to call a special meeting of the members for the purpose of recalling one or more Directors.
GenoS
(Florida)

Posts:2291


04/12/2018 6:55 PM  
Posted By SamB5 on 04/12/2018 9:16 AM
Thank you Geno. I have found the statute you mention.

What exactly is a recall?

That's the one, Sam. Tim's right.

Here are a few links that might help.

DBPR promultaged "FORM FOR HOMEOWNERS WRITTEN RECALL AGREEMENT / BALLOT"
DBPR Recall Procedures for Homeowners' Associations

Florida condos and HOAs are "strictly creatures of statute," and in DBPR case 2003-08-3347 an arbitrator ruled that,

"... it follows of necessity that being a creature of statute, an association may only exercise those remedies prescribed by the statute."
" ... the fact that the statute permits the owners to recall their board members implies in the first instance that the legislature did not
contemplate additional methods by which a board member may be removed. An additional consideration in this regard is that the removal of a board member by other than recall has the effect of disenfranchising the unit owners who have the statutory right to elect their board members. If the board was free to remove board members, this would permit the board to undo the results of duly held elections and would put
the board in the position of determining the composition of the board. 'If a board may willy-nilly remove board members following a duly conducted election, the board has the ability to change the outcome of any given election in a fundamental way.'"
"Permitting removal of a board member for nonpayment of assessments would open the way to removal for an entire host of other reasons including a violation of the condominium documents or perhaps even a rule adopted by the board, and would create wholesale uncertainty
and instability in the composition of the board."

The case revolved around the board's attempt to kick someone off the board because the bylaws said a director who was more than 30 days delinquent in paying their assessments had effectively "resigned" from te board. The arbitrator ruled,

"For the reasons stated, the bylaw is declared to be invalid, and Ms. Schultz is hereby immediately reinstated to the board; the board is ordered to reinstate Ms. Schultz and to include her as a functioning board member until the term to which she was appointed has expired."

In DBPR case 2011-02-8696 a DBPR arbitrator struck down an association's bylaw that said the Board of Directors could kick someone off the board "for cause". Using substantially the same arguments that were employed in the 2003 case, the arbitrator ruled,

"... the fact that the statute permits the owners to recall their board members implies that the Legislature did not contemplate additional methods by which a board member may be removed."
"... the removal of a board member by any process other than recall would have the effect of disenfranchising the unit owners who have the statutory right to elect their board members."
"Ms. Nevin is hereby immediately reinstated to the board and the board is ordered to include her as a functioning board member until the term to which she was appointed has expired..."

Note that the above DBPR cases involved FS 718 Condominium associations and not FS 720 Homeowners associations. Nevertheless, in DBPR case 2008-00-4566 a DBPR arbitrator said that,

"Although this case involves a homeowner's association, and not a condoininium, the basic law is the same for interpreting statutes and governing documents."

The 2008 case involved an association that wanted to kick 2 directors off the board because they had missed 3 consecutive board meetings and the bylaws said that was sufficient to get them off the board. Not so fast! said the arbitrator,

"The statute with respect to recalls in homeowners associations states a clear intent to limit the power of an association to remove a director."
"In general, a community association board of administration has no authority to remove a board member by board action."
"The provision of Respondent's By-laws providing for remval of directors by the board conflicts with Chapter720, Florida Statutes and is invalid."
SamB5
(Florida)

Posts:29


04/13/2018 7:11 AM  
Thank you all. This is good information to have as a last resort. Hopefully we can convince the current board to act appropriately and will never need to go this route.
GenoS
(Florida)

Posts:2291


04/13/2018 9:19 PM  
Good luck to you, SamB5. This is a difficult thing for people to understand, for some reason. Mainly, I think, it's because they don't want to understand it. 2 years ago our president, Mrs. X, wrote up a "loyalty oath" that she passed out to all directors and demanded they sign. "If you don't sign it you're off the board," she said. The woman it was aimed at resigned before the issue came to a head. As a result of this power play, Mrs. X was not voted back on the the board for 2017. I spent many hours talking to people and explaining how, in light of the statutes, the board - and certainly not the president all by herself - could eject someone from the board of directors. People seemed to understand.

In 2017 the worst possible president possible, Mr. Z, took office. He was dangerous and put the HOA into a precarious legal position with regard to enforcing some of our covenants and rules. Luckily he didn't do any permanent damage.

Then 2018 rolls around and due to a lack of volunteers, Mrs. X got back on the board without an election because there were more vacancies than candidates. Sure enough people have short memories and Mrs. X is the president once again. Mr. Z is also still on the board and Mrs. X wants him gone. She is once again preparing a "loyalty oath" designed to get him to resign.

None of the homeowners who were here when she tried this trick 2 years ago remember a single thing I told them in 2016. "Did you hear Mrs. X is going to get Mr. Z. off the board?" I shake my head and walk away. Apparently I was talking to a brick wall back in 2016.

Good luck, again.
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