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Subject: Board resignation
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05/15/2020 12:42 PM  
What happens if a complete Board resigns? This would be in Colorado.


05/15/2020 1:35 PM  
The homeowners should get together and vote in another group, assuming they find enough people interested in the job. You'd better pray they do because if no one steps up, there's no entity to run the association. Property managers don't count as they aren't association members and take direction from the Board, which consists of homeowners. Without a Board, ALL homeowners, including you risk being held personally liable if something happens on the association's common areas and a lawsuit ensues.

Another bad outcome would be to put the association in receivership. Someone would have to go to court and ask a judge to appoint a receiver, who'd take over running the association. The receiver only answers to the court and homeowners would have no say whatsoever in what he/she does or why. Your assessments would increase a helluva lot because you'd have to pay court costs, the receiver's fees, plus the association's usual monthly expenses and fund reserves. Receivers are mostly interested in paying the bills, so if you have beef with a CCR violation, you'll have to find another way to settle it.

As you can imagine not being about to have any say in an HOA is not good for home sales or property values so wave goodbye to getting a decent price for your home.

I don't know what prompted the entire board to resign, but if you haven't done so already, start talking to your neighbors about calling a special meeting to see how the community should deal with this. You will need to elect a new board (YOU may need to be one of the new members) and then that group needs to address whatever it was that prompted the last group to bail. Yes they should have announced their intentions and left some sort of roadmap for their successors, but you'll still need to talk to them about what was going on. Homeowners who paid attention to what the board was doing should already know - let's hope they weren't the type who constantly complained and nit-picked to the point the previous board threw up their hands, said "ok, run it you damned selves" and bought you to this point.

If you and your neighbors don't have a clue as to how to run the association, start with reading your documents and then consider visiting the community association institute website (CAI) and investing in some of their educational materials. they cover all sorts of issues from rule enforcement to reserve studies and back to selecting a property manager if you need one.

(Hm, seems like this is the third time this week I've recommended CAI - in case anyone else is wondering, no I'm not a paid shill for them, but during my time on the board, I was our community's CAI representative and attending several training seminars sponsored by our local chapter. Unlike some states, our CAI chapter wasn't involved very much in state lobbying HOA style because they didn't have a lot of money, but in some cases they did have some influence in the HOA law that finally passed in 2009.)


05/15/2020 1:48 PM  
A member should step up, work with the manager to ensure routine chores are taken care of, and immediately arrange an election that complies with the Bylaws. The member who steps up should understand that he or she was not lawfully elected. He or she is not the board but instead some flavor of facilitator. He or she should not overstep her or his bounds. He or she should not make any major decisions.

About how big is the annual budget of this HOA?

The prior board was grossly remiss in not appointing at least one replacement before stepping down.

Courts do not like appointing receivers but they will when they have to. A receiver will cost the members a fortune. The person who steps up to facilitate acquiring a new board of directors should remind all members of this risk.


05/15/2020 7:34 PM  
Technically, their last act should be to appoint someone to the board or petition the court for receivership.


05/16/2020 5:49 AM  
Very unusual that the ENTIRE board would resign. If there’s one holdout willing to stay, vacancies should be filled asap.


05/16/2020 7:04 AM  
It really helps and gives you the best chance to get good advice if we have some basic information.

1) How many units/homes in HOA
2) Single Family or Condo?
3) How much are your HOA dues?
4) How many Board members in a normal situation?
5) How old is your Community?
6) Do you use a PMC or are you guys Self managed?
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