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Subject: what happens if ...
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TristaJ
(Texas)

Posts:3


08/18/2021 8:19 AM  
This is in Texas. Our proxies went out to vote for our new board. During this time, one of the names on the proxies who is on the board because three of our other board members moved in 2020 and our MC picked her own board -- but that's for another whole vent -- I digress...anyway, the guy has sent an e-mail saying he is resigning from the board -- that he was technically never voted on or asked to be by a previous board member -- and he's on our voting proxy. so what happens if he gets enough votes and is voted on? Does the board just ask a new person to take his place?

Hope I'm making sense.

Is there anywhere in Texas law that address this kind of issue?

If the MC picks the new board member, I'll lose my sh*t and be back with another post.

Thank you for your time,

Trista
KerryL1
(California)

Posts:8729


08/18/2021 8:30 AM  
Are you on the Board, Trista?

Does your HOA have more candidates than one board spots?

Your writing is hard to go follow. It will help if you do not "digress."
JohnC46
(South Carolina)

Posts:11665


08/18/2021 8:52 AM  
Trista

Are you saying the vote for the BOD went out with a name that does not want to be on the BOD? If so, votes for his are disregarded in the count. Easy Peazy.
AugustinD


Posts:1920


08/18/2021 8:53 AM  
Posted By TristaJ on 08/18/2021 8:19 AM
This is in Texas. Our proxies went out to vote for our new board. During this time, [for] one of the names on the proxies who is on the board [snippage] the guy has sent an e-mail saying he is resigning from the board [snippage] so what happens if he gets enough votes and is voted on? Does the board just ask a new person to take his place?
Per Texas HOA/COA law; the Texas nonprofit corporation act; and/or the Bylaws, the Board appoints a new director anytime there is a vacancy on the Board and the HOA/COA is between its annual elections.
MaxB4
(California)

Posts:1601


08/18/2021 9:15 AM  
I would be more concerned that the MC picked her own Board.

I would wait for our experts in Texas, Bill and Barbara to weigh in.
KerryL1
(California)

Posts:8729


08/18/2021 10:09 AM  
I hope Trista will start a thread about the MC appointing a board. But that's not her topic today.

I agree with others Trista. whether or not you're on the Board, your Bylaws will tell you how to fill vacancies, which most likely is as Augustin found for you.
JohnC46
(South Carolina)

Posts:11665


08/18/2021 10:10 AM  
Trista

The BOD picks (votes) on people to fill any vacancy. THE MC does not play a role.
AugustinD


Posts:1920


08/18/2021 10:43 AM  
If the MC is picking the board, and is often pointed out here at hoatalk, this is because the Board lets the MC do so.

I am pretty sure the only way to fix this is to get on the board with a like-minded majority.
BillH10
(Texas)

Posts:783


08/18/2021 11:25 AM  
If the gentleman is on the Board now, presumably having been appointed, and resigns, he is no longer on the Board. However, that has nothing to do with the appearance of his name on the proxy.

If he was appointed to fill a vacancy caused by a resignation, in the documents I have seen in Texas, his appointed term lasts until the next Annual Meeting, not for the duration of the term of the person who resigned.

The appearance of his name on the proxy, and his pre-election resignation from the Board should have nothing to do with the election itself. If he is qualified (by the Bylaws of the Association) to serve on the Board and is on the Ballot/Proxy, and garners sufficient votes, he is elected to the Board regardless of any of the foregoing. The term to which he is elected may be the remaining term of the vacancy he was selected to fill, or it may be a full term if there is such a vacancy to be filled at this annual meeting. In my experience, when that happens, (two vacancies) the two parties who garner the most votes agree between themselves who will fill which vacancy. I have seen it handled by a coin flip.

If the gentleman who resigned his appointed place on the Board is elected, he may choose to serve, or he may choose to immediately resign, in which case the remaining members of the Board should appoint another person to fill the vacancy, depending on the what is contained in the Bylaws of the Association.
AugustinD


Posts:1920


08/18/2021 11:56 AM  
Posted By BillH10 on 08/18/2021 11:25 AM

If he was appointed to fill a vacancy caused by a resignation, in the documents I have seen in Texas, his appointed term lasts until the next Annual Meeting, not for the duration of the term of the person who resigned.
It appears to me that whether a board-appointed director serves until the next election or serves for the remainder of the term of the vacated seat requires a review of the governing documents and the applicable statutes. By my reading and depending in part on the governing documents, where a seat on a Texas HOA/COA board becomes vacant because of a resignation, statutes say the appointed director may very well lawfully end up serving for the unexpired term of the seat the appointed director is filling.

What the statutes say:

For all HOAs/COAs that are nonprofit corporations, the Texas Nonprofit Corp Act states:
"Unless otherwise provided by the certificate of formation or bylaws of the corporation, a vacancy in the board of directors of a corporation shall be filled by the affirmative vote of the majority of the remaining directors, regardless of whether that majority is less than a quorum. A director elected to fill a vacancy is elected for the unexpired term of the member's predecessor in office."

For Texas HOAs subject to TPC 209, and quoting from the latter:
"A board member may be appointed by the board to fill a vacancy on the board. A board member appointed to fill a vacant position shall serve for the remainder of the unexpired term of the position."

The "shall" above is not trivial. I expect the "shall" means that TPC 209 trumps governing documents saying otherwise.

For Texas condos subject to TPC 82, and quoting from the latter:
"The board may fill a vacancy in its membership for the unexpired portion of a term."
(Does not apply to condos that are established pre-1994)

For Texas condos subject to TPC 81:
TPC 81 is silent on the subject.

AugustinD


Posts:1920


08/18/2021 12:01 PM  
TristaJ, would you please indicate whether this is a non-condo HOA or a condominium? Also please state the year the condo or HOA was established. The year of establishment should be in the signature section of the Declaration, for one.
MaxB4
(California)

Posts:1601


08/18/2021 12:25 PM  
I looked up two associations in Texas, one a condo (Condo Act) the other a HOA (Residential Act).

The Condo states vacancies appointed by the board are in effect until the next annual meeting.

The HOA states vacancies appointed by the board are in for the unexpired term.

So HOA's have to fill the vacancy for the unexpired term, while Condos will go by the governing docs, and if they are silent, then the unexpired term.
AugustinD


Posts:1920


08/18/2021 1:11 PM  
Posted By MaxB4 on 08/18/2021 12:25 PM
I looked up two associations in Texas, one a condo (Condo Act) the other a HOA (Residential Act).

The Condo states vacancies appointed by the board are in effect until the next annual meeting.

The HOA states vacancies appointed by the board are in for the unexpired term.

So HOA's have to fill the vacancy for the unexpired term, while Condos will go by the governing docs, and if they are silent, then the unexpired term.
But you have no idea if all Texas HOA governing documents say the appointed director sits for the unexpired term. These Texas HOAs Bylaws are silent or ambiguous as to how long appointed directors serve:

https://www.prestwyckhoa.com/Libraries/Governing_Documents/Recorded_Bylaws_from_CCRs.sflb.ashx

http://www.reserveatskyline.com/UserFiles/files/Bylaws.pdf


The same argument holds for condos. Texans here should review both their HOA/COAs governing documents and the statutes.
MaxB4
(California)

Posts:1601


08/18/2021 1:33 PM  
An important part of 209 was omitted:

Sec. 209.00593. ELECTION OF BOARD MEMBERS. (a) Notwithstanding any provision in a dedicatory instrument, any board member whose term has expired must be elected by owners who are members of the property owners' association. A board member may be appointed by the board to fill a vacancy on the board. A board member appointed to fill a vacant position shall serve for the remainder of the unexpired term of the position.

The first link has nothing in regards to directors, nothing. The second, based on Section 209.00593, shows the director, once appointed, served out the unexpired term.
AugustinD


Posts:1920


08/18/2021 2:34 PM  
Posted By MaxB4 on 08/18/2021 1:33 PM
An important part of 209 was omitted:

Sec. 209.00593. ELECTION OF BOARD MEMBERS. (a) Notwithstanding any provision in a dedicatory instrument, any board member whose term has expired must be elected by owners who are members of the property owners' association. A board member may be appointed by the board to fill a vacancy on the board. A board member appointed to fill a vacant position shall serve for the remainder of the unexpired term of the position.

The first link has nothing in regards to directors, nothing. The second, based on Section 209.00593, shows the director, once appointed, served out the unexpired term.
I am pretty sure you are under the illusion that the "notwithstanding" applies to all of the sentences in section (a). It does not.
BillH10
(Texas)

Posts:783


08/18/2021 3:14 PM  
I agree, the type of association and the governing documents will dictate how long an appointee shall serve. I am focused on Section 81 and 82 associations and have not managed a 209 association in several years.

However, none of that discussion is relevant to the OPs concern about the the name of the person who resigned appearing on the Proxy/Ballot. Trista's concern is the chain of previous events, and not how long a person appointed to a vacancy shall serve on a Board.

It matters not which section of the property code is applicable to the OPs association, the person who resigned, if qualified under the Bylaws to serve, is a viable candidate for a vacancy on the Board regardless of previous service as an appointed (or even elected) member of the Board who resigned, regardless of when the resignation took place, assuming there is no language in the Governing Documents which states otherwise.

Regardless of the statements of the person who resigned and is now a candidate, this may simply be a tactic to be elected to a full term slot on the Board (if there is one) as opposed to being appointed to serve out (Section 209) or elected to serve out (Section 81 or 82) the remaining term of a resigned seat on the board.

The foregoing assumes, of course, the board members are elected to staggered terms of longer than one year. Three years seems to be the norm for staggered term associations. If this is an association with one year terms and every board member is up for election every year, the entire discussion is moot, regardless of which property code section governs the association.
MaxB4
(California)

Posts:1601


08/18/2021 3:34 PM  
Posted By BillH10 on 08/18/2021 3:14 PM
I agree, the type of association and the governing documents will dictate how long an appointee shall serve. I am focused on Section 81 and 82 associations and have not managed a 209 association in several years.

However, none of that discussion is relevant to the OPs concern about the the name of the person who resigned appearing on the Proxy/Ballot. Trista's concern is the chain of previous events, and not how long a person appointed to a vacancy shall serve on a Board.

It matters not which section of the property code is applicable to the OPs association, the person who resigned, if qualified under the Bylaws to serve, is a viable candidate for a vacancy on the Board regardless of previous service as an appointed (or even elected) member of the Board who resigned, regardless of when the resignation took place, assuming there is no language in the Governing Documents which states otherwise.

Regardless of the statements of the person who resigned and is now a candidate, this may simply be a tactic to be elected to a full term slot on the Board (if there is one) as opposed to being appointed to serve out (Section 209) or elected to serve out (Section 81 or 82) the remaining term of a resigned seat on the board.

The foregoing assumes, of course, the board members are elected to staggered terms of longer than one year. Three years seems to be the norm for staggered term associations. If this is an association with one year terms and every board member is up for election every year, the entire discussion is moot, regardless of which property code section governs the association.



Bill,

How would tell what code an association falls under?
BillH10
(Texas)

Posts:783


08/18/2021 4:01 PM  
Max

In broad general terms, condominium associations in Texas are governed by Section 81 or Section 82 of the Texas Property Code, depending on the date of original formation of the corporation.

Someplace in the governing documents of the Association, language should exist which states the condominium regime was organized under the Texas Condominium Act (Section 81) or the Texas Uniform Condominium Act (Section 82) also known as the 'TUCA'. Citations to the property code Section or Chapter number may or may not be present.

Caveats:

1. Section 81 organizations may elect to be governed by Section 82 after it was implemented, I believe in 1994.

2. Some condominium associations may use the term 'Homeowners Association' in the corporate name but they are in reality a condominium association. Two of our clients are so named. The word condominium may not appear in the corporate name at all, as is the case of 3 other of our clients.

3. The Texas Legislature, in its infinite wisdom, has implemented changes to Section 82 of the Property Code which also apply to Section 81 Associations. They did so in the most recent regular session which adjourned in late May or June to require condominiums governed by either section to implement association document access and retention guidelines and provisions which are already required for Section 209 Homeowners Associations.

In similar broad general terms, Homeowners Associations are governed by Section 209 of the Property Code. The formation documents similarly should (must?) contain language stating the entity is incorporated as a homeowners association governed by Section 209 of the Property Code or words to that effect.

Associations in some counties, while falling under Section 209, have certain carve-outs depending on the county in which they are located, or adjacent counties. I am not familiar with the reasons and logic for such exceptions.

I'm not going to address how the corporation code and other laws higher up the food chain fit into this, if we find ourselves dealing with such issues we seek advice and counsel from our or the association attorney.
AugustinD


Posts:1920


08/18/2021 5:03 PM  
Posted By BillH10 on 08/18/2021 4:01 PM
The Texas Legislature, in its infinite wisdom, has implemented changes to [Chapter] 82 of the Property Code which also apply to Section 81 Associations. They did so in the most recent regular session which adjourned in late May or June to require condominiums governed by either section to implement association document access and retention guidelines and provisions which are already required for Section 209 Homeowners Associations.
Why the snark ("in its infinite wisdom")? The Chapter 81 condo act is about 11 pdf pages long. The Chapter 82 condo act is about 59 pdf pages long. The Chapter 81 condo act reads like something a tenth grader in high school would prepare. Thank goodness certain sections of the Chapter 82 act apply to all condos, regardless of date of establishment. I think anything the Texas legislature wants to add to the Chapter 81 condo act could only help associations.
JohnC46
(South Carolina)

Posts:11665


08/18/2021 5:32 PM  
Our docs are quite clear. Any Director appointed by the BOD, fills out the term of the person they are replacing. I believe this was done to keep our 5 person BOD in rotation of three being up for election one year. Two up for election the next year.

We shot that in the ass last year with no election so all 5 spots will be open this year. If we have 5 or more we will take the largest 3 vote getters for a two year term. The lesser 2 vote getters for a one year term. My expectation is we will go begging for people to be on the BOD. We BOD will be discussing that scenario prior to this years election.
BillH10
(Texas)

Posts:783


08/18/2021 5:40 PM  
Augustin, the 'snark' was a mostly a generic observation regarding legislative bodies everywhere, not just those which convene in Austin every other year.

If you saw some of the bills introduced regarding HOAs especially, condominium associations do not garner as much attention for some reason (Barbara has commented on this), you would perhaps think my comment not so snarky. A bill a session or two ago sought to disband all HOAs in the state. Can you imagine the chaos which would have resulted in terms of property deed language revisions alone. To introduce a bill like that was a total waste of time and money, hence it and its author are worthy of a snarky comment.

The Section 81 vs. Section 82 discussion works both ways. The Section 82 associations, especially those organized (in our experience) since the mid-90s, are far easier to manage in some respects as much of the ambivalent language found in Section 81 declarations has been tightly reworded, especially definitions of common elements, what is and is not a common element, and which party is responsible for what. Section 81 condominiums are all over the map on common elements, some have established and filed documents to clarify declaration language which is identical to that found in a contemporary property a mile away, which itself has established and filed interpretations the exact opposite of the first association interpretations.

Other positive aspects of Section 82 are not as important for many Section 81 associations as the Bylaws or Declaration of the Section 81 organization contains many of the positive language changes found in Section 82--open board meetings are a primary example. We have three client organizations which date to the early 80s. All three are Section 81 condominiums and all three spell out in very plain language board meetings must be open to all owners, no ifs, ands, and buts excepting the usual caveats about Executive Sessions.
AugustinD


Posts:1920


08/18/2021 5:46 PM  
Posted By BillH10 on 08/18/2021 5:40 PM
Augustin, the 'snark' was a mostly a generic observation regarding legislative bodies everywhere, not just those which convene in Austin every other year.
Given the numerous political remarks I have made here, and how no one has told me to knock it off, it would be hypocritical to object to the same by others. So:

Very well.

If you saw some of the bills introduced regarding HOAs especially, condominium associations do not garner as much attention for some reason (Barbara has commented on this), you would perhaps think my comment not so snarky. A bill a session or two ago sought to disband all HOAs in the state.
Well some of us would call such a move wise.

I would have to see all the proposed bill's provisions to see if this seriously could be done without chaos ensuing.

Regarding your other comments: Duly noted.
MaxB4
(California)

Posts:1601


08/18/2021 8:17 PM  
Bill,

Since you do business in Texas, if a BM resigns and the Board fills the vacancy, and the Board asks how long is the appointed person's term, what would you say?
BillH10
(Texas)

Posts:783


08/19/2021 6:10 AM  
Max, I would ask for a time out to research the answer.

Our client associations range in age from 41 years to 5 years. Some are Texas Property Code Chapter 81 associations, other are Chapter 82 associations.

Some of the wording in the documents of the 41 year old association is identical to that found in the documents of the 5 year old association, most of it is not.

That being the case, we have found we must research everything every time to ensure we provide a correct response.

To complicate matters from a personal perspective, our home is located in a Section 209 homeowners association. My wife is the vice-president, I served as a member of the board for 8 years, including 5 as president.
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