Recently, our management office surveyed all of the
communities that we manage in order to determine whether or not
each board is comprised of the appropriate number of directors
as required by the bylaws. We learned that, while most were compliant
with the bylaws, some had either too many or too few directors.
This may seem like an insignificant issue; however,
when considering the ramifications for non-compliance, the number
of directors becomes of great importance. Should issues arise regarding
decisions made by boards of directors, questions often surface
about the validity of the board. Attorneys quickly, and in some
cases, easily, raise the argument that decisions made by the board
were invalid because the association failed to follow its bylaws
with respect not only to the number of board members, but perhaps
also as to whether the board was properly elected, or if term and
other requirements were met.
Homeowner association board members could potentially
pay a high price for failing to maintain a duly elected board of
directors comprised of the appropriate number of members. In a
recent lawsuit, actions of a board were deemed invalid by the court
because the board failed to obtain a quorum for a membership meeting,
which meant that the board was not duly elected and did not conform
to the number of directors required by the bylaws. The association
was ordered to pay the homeowner a significant amount in damages
and legal fees.
In some instances, associations are unable to recruit
the number of directors required, while other associations are
faced with the dilemma of having too many volunteers. Having too
few directors is typically easier to remedy because, in most cases,
vacancies caused by resignations are easily filled by appointment.
Typically, there is a provision in the bylaws that gives the remaining
directors the authority to appoint directors to fill vacant positions
on the board; however, in some cases, the replacements must be
elected by the membership at large.
In an attempt to accommodate all of those who volunteer
to serve on the board, association members sometimes “vote” all
of the volunteers into office. Association leaders must intervene
should this happen in their association, to lead the members to
a solution that is in keeping with the requirements of the bylaws.
Some solutions include amending the bylaws to increase the number
of directors or holding a special meeting to re-elect the appropriate
number of board members to satisfy the bylaw requirements. To ensure
continued compliance, the association leaders should utilize provisions
in the bylaws that address the nominating committee and other election
procedures.
Often, volunteers are confused about election of
the directors verses the officers. Typically, the membership elects
the directors and those directors elect officers, who may be one
in the same or different. For example, some bylaws provide that
the officers are not required to be directors. That being the case,
the officers would not be able to vote on board motions. Only duly
elected directors should make, second and adopt motions.
Below are some tips to ensure compliance with board
member number requirements:
- Become familiar with the bylaws that govern your association
- Consult your association attorney when in doubt about ambiguous
language
- Default to the covenants or articles of incorporation for
additional guidance if the bylaws do not address the issue
- Keep accurate and complete minutes of association and board
meetings
- Make sure that a quorum is present when electing directors
- Maintain a board roster with election and term dates for
each director
For a free Complete Toolkit for Boards visit http://www.mapnp.org/library/boards/boards.htm.
