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Subject: Board Candidate Home Sale & Annual Election
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Author Messages
JustineF
(California)

Posts:2


10/17/2020 1:49 PM  
I am a member in a small community in California, 18 units. We have a very hard time getting homeowners to run for the Board, we have a 3 person Board. For this year's election we have one open seat & one candidate. We updated our election rules per the new law that went into effect this year. We have our election scheduled for end of October and have followed all the CA HOA notification requirements.

The one candidate self-nominated by the deadline in August, we sent out the required communication with the list of candidates in August, and we sent out the ballots in September. This week, the candidate put their home up for sale & was very lucky to get an accepted offer within days of it being listed. We are less than 10 days from the scheduled election.

Question, what now happens to our election? The candidate will still be a homeowner on the date of the election, and is the only person running so it is very likely they will be elected. Is the best path to proceed and hold the election, form the new board & then have the person resign once the sale is finalized? Our Bylaws allow the Board to appoint a new Director in the case of a vacancy at a "duly held meeting of the Board".

Any input is appreciated.
JohnC46
(South Carolina)

Posts:10014


10/17/2020 1:52 PM  
Justin

Until the sale is closed, they are still an owner.
JohnC46
(South Carolina)

Posts:10014


10/17/2020 1:55 PM  
Posted By JohnC46 on 10/17/2020 1:52 PM
Justin

Until the sale is closed, they are still an owner.




ADD ON

If amount of people running are the same amount (or less) as open seats (in your case one for one), there is no need for an election. They are seated.
JustineF
(California)

Posts:2


10/17/2020 2:35 PM  
JohnC46, thanks. In CA still have to have election. As I understand it, we can only seat by acclimation if HOA is over 6,000 members.
GeorgeS21
(Florida)

Posts:3275


10/17/2020 2:36 PM  
I don't know California rules - or what your Bylaws say.

But - if you can seat the candidate as a board member, then they move, the Board should be able to appoint a replacement - probably the easiest, and potentially more strategic move?
KerryL1
(California)

Posts:7579


10/17/2020 2:49 PM  
Your are right, Justine, there is no way to elect a director by acclimation in CA except for huge HOAs.

Other advice is good. The person serves until escrow closes and the remaining 2 directors appoint someone else. Sound like in your case, though, that it's hard getting anyone to serve
SueW6
(Michigan)

Posts:768


10/18/2020 1:32 PM  
Check your bylaws to make sure that there is a requirement that Board members must be an owner.



KerryL1
(California)

Posts:7579


10/18/2020 5:43 PM  
Eff. 1/20: HOA directors in CA must be owners of record.
NpB
(Arizona)

Posts:413


10/21/2020 4:37 PM  
I would be surprised if there are any HOA CC&rs or Bylaws that permit non-recorded owners to be HOA Board members
KerryL1
(California)

Posts:7579


10/21/2020 4:47 PM  
Often, NpB, the first group of board members are th developer's staff, etc., , some of whom aren't owners. So, prior to 1/20, bylaws do not specify such a requirement.
NpB
(Arizona)

Posts:413


10/21/2020 5:10 PM  
Posted By KerryL1 on 10/21/2020 4:47 PM
Often, NpB, the first group of board members are th developer's staff, etc., , some of whom aren't owners. So, prior to 1/20, bylaws do not specify such a requirement.





Yes, however Declarants ability to run for Boards and other powers usually have an expiration date written into CC&Rs, Bylaws.
AugustinD


Posts:4152


10/21/2020 5:25 PM  
Posted By NpB on 10/21/2020 4:37 PM
I would be surprised if there are any HOA CC&rs or Bylaws that permit non-recorded owners to be HOA Board members
Of the three HOAs/condos where I lived, at least two had provisions for non-recorded owners to serve on the Board.
GeorgeS21
(Florida)

Posts:3275


10/21/2020 6:03 PM  
My current HOA has no requirement for board members to be owners, or for officers, except the president to be on the board.
MarkM19
(Texas)

Posts:667


10/21/2020 6:36 PM  
Kerry,
Is this a new law about Acclamation? We had it in place back in 2015 or 2016 when I was on a Ca. board. Seems like a waste of time no matter how many units are in your HOA. I am surprised to hear this but we all know that Ca. is going crazy with new laws.

Obviously this does not effect me as I am in Texas for the rest of my board life but I am curious if my board actually did not follow State laws.
KerryL1
(California)

Posts:7579


10/21/2020 6:59 PM  
Yes, MarkM, I think I wrote effective 1/20. The new Election Rule requirement here are really stupid and caused us (well me) al lot of extra work this year. Such changes often require changes to the bylaws.
NpB
(Arizona)

Posts:413


10/22/2020 7:20 AM  
How can a Board member whose house is for sale and remains a Board member have a duty of loyalty to the Board or HOA?

In my experience, every Board member whose house is for sale has resigned. IMO, for someone whose house is for sale to not resign from the Board demonstrates a selfish agenda.
BillH10
(Texas)

Posts:565


10/22/2020 7:59 AM  
NpB

A real world example of why a member of the Board chose not to resign until the sale of the property closed--with the complete approval of those active in the Association with whom she consulted:

The President and her husband, 25+ year owners, have been looking to find another home for some time as theirs is no longer adequate due to family size, age of children, family activities, number of vehicles, etc.

They became aware of a property on the market nearby (less than 2 miles as the crow flies, across the golf course), different sub-association, same Master Association, which came on the market. Their offer was accepted.

We have great difficulty finding even three volunteers for the Board most years. Another Board member resigned in August as they relocated to Australia. A self-nominated candidate, a prior Board member from the '90s, was appointed to fill the vacancy until the next annual meeting in the spring.

The President consulted with several of us (I am the immediate Past president) regarding resigning immediately. We asked she not do so as she is the only Director on the Board with any modern day experience.

Our advice was based on the fact her term will expire when the annual meeting takes place, or the property sells, whichever takes place first. There are no pending issues, only one remaining board meeting prior to the annual meeting. She, and those of us she consulted, including the other members of the board, do not wish to contend with the necessity of finding, interviewing, and appointing someone to fill a vacancy for only a few months prior to the annual meeting. Neither of the two remaining Board members have any interest in the presidency, hence her remaining in place makes the most sense. Were she not the President, the director seat would simply be left open.

We have no issues or concerns regarding her continued attention to the Association in the interim, she has been instrumental over the years in organizing social activities, events, committees, etc.

Had there been many months to a year or more remaining of her term, those she consulted would have advised differently. In this case, it makes no good sense for her to resign until it is necessary.
AugustinD


Posts:4152


10/22/2020 8:11 AM  
Posted By NpB on 10/22/2020 7:20 AM
How can a Board member whose house is for sale and remains a Board member have a duty of loyalty to the Board or HOA?
Because the law requires it.
Posted By NpB on 10/22/2020 7:20 AM
In my experience, every Board member whose house is for sale has resigned.
This may be your opinion, but I doubt your experience is that the law requires a director with a house for sale to resign.
Posted By NpB on 10/22/2020 7:20 AM

IMO, for someone whose house is for sale to not resign from the Board demonstrates a selfish agenda.
I think a director with a home on the market would want to get top dollar for her or his home and so would want the HOA to be functioning as well as possible.
NpB
(Arizona)

Posts:413


10/22/2020 9:00 AM  
Posted By AugustinD on 10/22/2020 8:11 AM
Posted By NpB on 10/22/2020 7:20 AM
How can a Board member whose house is for sale and remains a Board member have a duty of loyalty to the Board or HOA?
Because the law requires it.
Posted By NpB on 10/22/2020 7:20 AM
In my experience, every Board member whose house is for sale has resigned.
This may be your opinion, but I doubt your experience is that the law requires a director with a house for sale to resign.
Posted By NpB on 10/22/2020 7:20 AM

IMO, for someone whose house is for sale to not resign from the Board demonstrates a selfish agenda.
I think a director with a home on the market would want to get top dollar for her or his home and so would want the HOA to be functioning as well as possible.





Correct. No law requires resignation. Staying on is purely selfish and agenda driven in my opinion, especially at the stage when house is under contract.
AugustinD


Posts:4152


10/22/2020 9:20 AM  
Posted By NpB on 10/22/2020 9:00 AM
No law requires resignation. Staying on is purely selfish and agenda driven in my opinion, especially at the stage when house is under contract.
I keep in mind that home sale contracts fall through all the time, right up to the day of closing. The buyer fails to reveal such and such debt he or she has, or the lender fails to take into account the HOA fee, and so on.

No big deal. Your opinion has some merit, of course. BillH10's anecdote is helpful as well.
GeorgeS21
(Florida)

Posts:3275


10/22/2020 7:17 PM  
And, another odd conclusion from npb.
MelissaP1
(Alabama)

Posts:9648


10/23/2020 4:30 AM  
FYI: I was President of my HOA when most of my board left for various reasons. We ended up with just me and the Vice-President whom was 6 months behind in his dues due to a "protest". Could not appoint anyone to the board and had to wait till the annual elections to get new members in.

Mind you I had even moved out of my neighborhood for the last few months of my term. I had found a house in the neighborhood behind our HOA to purchase. My HOA house had to become "rental" property. Can actually see my former HOA from my front yard.

So I was still able to act as President and then volunteer as a board member during the transition. That way I could be a resource for the new board when they took over.

My rental property was still an incentive for me to keep involved in my HOA. I am still an owner and member after all. Once I sold that property, I was no longer a HOA member. Do not see any reason just because a person sells they can't still be involved till they are no longer a member.

Former HOA President
AugustinD


Posts:4152


10/23/2020 6:42 AM  
Posted By MelissaP1 on 10/23/2020 4:30 AM
FYI: I was President of my HOA when most of my board left for various reasons. We ended up with just me and the Vice-President whom was 6 months behind in his dues due to a "protest". Could not appoint anyone to the board [snip]
Alabama's nonprofit corporation statute authorizes the two directors to appoint a third director; then the three directors appoint a fourth; and so on until the seats are filled.
NpB
(Arizona)

Posts:413


10/23/2020 7:32 AM  
Posted By MelissaP1 on 10/23/2020 4:30 AM
FYI: I was President of my HOA when most of my board left for various reasons. We ended up with just me and the Vice-President whom was 6 months behind in his dues due to a "protest". Could not appoint anyone to the board and had to wait till the annual elections to get new members in.

Mind you I had even moved out of my neighborhood for the last few months of my term. I had found a house in the neighborhood behind our HOA to purchase. My HOA house had to become "rental" property. Can actually see my former HOA from my front yard.

So I was still able to act as President and then volunteer as a board member during the transition. That way I could be a resource for the new board when they took over.

My rental property was still an incentive for me to keep involved in my HOA. I am still an owner and member after all. Once I sold that property, I was no longer a HOA member. Do not see any reason just because a person sells they can't still be involved till they are no longer a member.





Why couldn't or didn't your Board appoint anyone to fill the remaining Board seats?

Did your Board think it was better to wait until the next election and have those elected appoint the remaining seats?
MelissaP1
(Alabama)

Posts:9648


10/23/2020 8:20 AM  
Our documents in themselves did not cover this situation. So we had to go by the normal election process. Plus did not have anyone wanting to volunteer at the time as well.

Former HOA President
AugustinD


Posts:4152


10/23/2020 8:52 AM  
Posted By MelissaP1 on 10/23/2020 8:20 AM
Our documents in themselves did not cover this situation.
As you have been told, your HOA's documents undoubtedly note that your HOA is a corporation subject to Alabama statutes. From Alabama Code § 10A-3-2.10:

Board of directors; vacancies.
(a) Any vacancy occurring in the board of directors and any directorship to be filled by reason of an increase in the number of directors may be filled by the affirmative vote of a majority of the remaining directors, though less than a quorum of the board of directors, unless the governing documents of the nonprofit corporation provide that a vacancy or directorship so created shall be filled in some other manner, in which case the provision shall control.

(b) A director elected or appointed, as the case may be, to fill a vacancy shall be elected or appointed for the unexpired term of his or her predecessor in office.

(c) Any directorship to be filled by reason of an increase in the number of directors may be filled by the board of directors for a term of office continuing only until the next election of directors.

This was posted at https://www.hoatalk.com/Search/ForumSearch/tabid/87/forumid/1/postid/289011/view/topic/Default.aspx
MelissaP1
(Alabama)

Posts:9648


10/23/2020 8:58 AM  
Okay you go find a neighbor willing to do it... That is right my people who were new board later were crooked people was protecting HOA from. The others sold and left. Had no one wanting the job including myself. Even I moved...

Former HOA President
AugustinD


Posts:4152


10/23/2020 9:11 AM  
Posted By MelissaP1 on 10/23/2020 8:58 AM
Okay you go find a neighbor willing to do it
I do not have a problem with this being the reason the remaining two directors of your Alabama HOA could not appoint a third. But to be snotty about it, I would appreciate your not posting further any assertion that the law had no mechanism for appointing a third director. Lots of uninformed, poorly read, newbies come here. They need to know that boards can lawfully appoint directors when there is a sudden resignation.
GenoS
(Florida)

Posts:4130


10/23/2020 1:01 PM  
Posted By GeorgeS21 on 10/22/2020 7:17 PM
And, another odd conclusion from npb.

Projection, I think.
MelissaP1
(Alabama)

Posts:9648


10/23/2020 1:57 PM  
I would be so lucky it was resignations. It was actually "Sold my house bye". 1 was elderly and moved in with a daughter out of state. The rest of the people were part of the ex-president's followers that were not a healthy choice for our HOA at the time.

Luckily with me and the vice-president we had signature rights to sign checks. Plus the accountant firm was owned by our Treasurer who eventually did sell her home as well... So for the few months before the election just kept the HOA in status quo till I could formerly resign myself at that election.

Former HOA President
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