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Subject: How to handle potential vacant Director positions on next HOA annual meeting
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JanineR
(Tennessee)

Posts:192


06/03/2021 12:45 PM  
We require five people to serve as directors in our HOA.

This year all five directors' terms are up by the next annual meeting.

Lets say in the upcoming annual meeting:
three >new< people volunteer to be on the board, and
there is a quorum at the meeting, and
all three new volunteers are voted in by members.

How, who, and when would the other two vacancies be decided amongst the current directors?


(Tennessee, condos, 145 units)



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Bylaws read:
Directors: 4 c:
Except as to vacancies provided by removal of Directors by members, vacancies in the Board of Directors occurring between annual meetings of members shall be filled by the remaining Directors until the earlier of (i) the next annual meeting of the members, and (ii) the date of a special meeting called pursuant to these Bylaws for the purpose of filling the vacancy, at which time a Director shall be elected to fill the remaining term of any such vacancy

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more Bylaws excerpts
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Director's Meetings
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5 (a): The organizational meeting of a newly elected Board of Directors shall be held within ten (10) days of its election at such place and time as shall be fixed by the Directors at the meeting at which they were elected, and no further notice of the organizational meeting shall be necessary providing a quorum shall be present.

5 (c): Special meetings of the Directors may be called by the President, and must be called by the Secretary at the written request of any two (2) of the Directors. Notice of the meeting shall be given personally or by mail, telephone, or telegraph at least three (3) business days prior to the day named for such meeting, which notice shall state the time, place, and purpose of the meeting.

5 (f): The presiding officer of Directors' meetings shall be the President. In the absence of the President, the Directors present shall designate one of their numbers to preside.

5 (h): The Directors may adopt any resolution by an instrument in writing, signed by all of the then qualified and acting Directors, and any such resolution, when so executed, shall have the force and validity of a resolution adopted at any regular or special meeting.

Meetings of Members
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3 (b) Special meetings of members shall be held whenever called by the President, any Vice-President, or by a majority of the Board of Directors, and must be called by any such officer upon his or her receipt of a written request for a meeting from members entitled to cast lot less than ⎠ %] of the votes of the entire membership.


AugustinD


Posts:1675


06/03/2021 1:02 PM  
-- Appointing directors to fill the two vacant seats is a Board action. For maximum protection against liability, the vacant seats should be filled as soon as possible.

-- Hopefully willing volunteers will accept a board appointment. Ideally the Board would make an effort to solicit volunteers via a mass mailing or emailing; a notice on a bulletin board; an invitation to apply announced at the next board meeting; or similar.

-- The Board could do its formal vote to appoint people to fill the vacancies on the board at a board meeting, properly noticed to the membership when the Bylaws and state law require such notice.

-- On the other hand, because competent HOA/COA attorneys say that having all board seats filled is preferable, I support filling the seats via an action without a meeting, as described in Tennessee Code 48-57-104.
DouglasK1
(Florida)

Posts:1680


06/03/2021 1:32 PM  
Posted By JanineR on 06/03/2021 12:45 PM
We require five people to serve as directors in our HOA.

This year all five directors' terms are up by the next annual meeting.

Lets say in the upcoming annual meeting:
three >new< people volunteer to be on the board, and
there is a quorum at the meeting, and
all three new volunteers are voted in by members.

How, who, and when would the other two vacancies be decided amongst the current directors?




It's not clear to me, but in your scenario are the existing directors running again? If so, the top 5 vote getters would be the new directors.

Escaped former treasurer and director of a self managed association.
JanineR
(Tennessee)

Posts:192


06/03/2021 2:06 PM  
The existing five directors are not officially running again.

Having said that, they never actually run each year.

Our HOA has very little history of a quorum on annual meetings, and so year after year the existing directors continue their terms. This is mostly due to the property manager being mistaken that the annual meeting quorum is 51% not 30%, but that is in the past. Moving on to this year:

A quorum is likely, volunteers are likely (we had three last year).


If three new directors are voted in, and none of the current directors are officially running, how is it decided which ones are replaced and by who?


JanineR
(Tennessee)

Posts:192


06/03/2021 2:59 PM  
Assuming none of the five current directors are officially running again, but in the past continue as directors

Assuming, optimistically, that three new directors are voted in on the annual meeting later this year,

> Then, when do the three new directors start their position?

> And if there are now 8 people (5 previous, 3 new) who has the authority to determine what two of the previous five should remain until the next special meeting
DouglasK1
(Florida)

Posts:1680


06/03/2021 3:12 PM  
If you have a ballot with only three names for five open seats, then my guess is that the three on the ballot would win seats with two empty board positions. From there the 3 member board would follow AugustinD's procedure to appoint two additional directors from all eligible candidates that are willing to serve. That could include others who were not members of the existing board.

If the existing members want to be on the board again, they should have their names on the ballot.

Depending on your bylaws and state law, your association might allow nominations from the floor during the meeting. If so, you should attempt to get at least 5 to run.

Escaped former treasurer and director of a self managed association.
JanineR
(Tennessee)

Posts:192


06/03/2021 3:36 PM  
That's very interesting.

So at some point during the annual meeting the three (or whatever the number is) becomes the new board, and they can then appoint the last two positions from the previous five? The previous five do not decide amongst themselves after the meeting as they are no longer officially directors for a short moment?

For a short moment there are three board members not 5 or 8?
AugustinD


Posts:1675


06/03/2021 4:10 PM  
Posted By JanineR on 06/03/2021 2:06 PM
The existing five directors are not officially running again. Having said that, they never actually run each year.


Posted By JanineR on 06/03/2021 2:59 PM
[snip] who has the authority to determine what two of the previous five should remain until the next special meeting


Posted By JanineR on 06/03/2021 3:36 PM

So at some point during the annual meeting the three (or whatever the number is) becomes the new board, and they can then appoint the last two positions from the previous five? The previous five do not decide amongst themselves after the meeting as they are no longer officially directors for a short moment?

For a short moment there are three board members not 5 or 8?
Now I see the proverbial wrench that has been thrown into the gearbox.

Tennessee, like many states, has a non profit corporation act section that states, in these circumstances, directors serve until a successor is elected. See https://law.justia.com/codes/tennessee/2019/title-48/nonprofit-corporations/chapter-58/part-1/section-48-58-105/ .

If possible, a conversation needs to happen about which two of the five current directors agree to run for the board (and so will win election, assuming exactly three others are running as well). Silence is a violation of their fiduciary duty. Though the problem is, they may not think so.

Is such a conversation possible?

JohnC46
(South Carolina)

Posts:11514


06/04/2021 9:55 AM  
Jan

If 6 or more fun for the 5 positions then the top 5 vote getters are the new BOD.
If 5 or less run for the 5 positions, there is no need for an election.
If 4 or less run then the new BOD can fill the vacant spot(s).

Those having served on prior or present BOD means nothing.
MaxB4


Posts:1351


06/04/2021 10:19 AM  
If the current board of five did not file their intention to seek re-election, while three newbies did, the ballot should only contain those whose filed a candidate form. If quorum, as stated in your Bylaws is met, then the top five vote getters are elected to the board, assuming there are write in candidates and/or nominations from the floor and of the original three all got at least one vote.

What happens though if quorum is not reached and for whatever reason the annual meeting/election is not adjourned, then the current five board members will remain in office.
JeremyH5
(Wisconsin)

Posts:2


06/07/2021 1:45 PM  
Even with all of that said, I would still have a continuity plan to have all of that written down and to avoid confusion. Here is an article that goes into details about it. https://clarksimsonmiller.com/hoa-board-continuity-planning/
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