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Removal of entire board of directors

Hi Dennis,
What happens when homeowners vote to remove an entire board of directors? We now have a management company, if that makes any difference.

7 Responses

  1. dennisl

    Dave,
    If you are in a HOA the relevant statute is ARS-33-1813. If you had a petition to remove the entire board and at the subsequent special meeting of the members the ballot issue passed than what the law says is that another special meeting of the members is called and held within 30 days to elect the new board, to fill the remaining terms of the removed board members. The association is free to determine who fills the specific vacancy terms. Typically you could use something like the people with the highest vote count get the longest remaining terms and the people with fewer vote counts get the shorter term. You could also simply leave that up to the newly elected board. Initially you are only finishing the remaining terms of the removed members then the elections would continue as normal at the annual meetings. Some board members could only get to serve a partial year, by they are free to run again at the next election.

    The removed board members could not be appointed to fill any vacancies during the remainder of their prior term. The removed board members are however free to run for election again after their prior term is completed.

    Hopefully this helps.

    Dennis

    1. Concerned in Scottsdale

      Our management company has been in bed with the board that was busted removed. How do we fire the management company and who runs the association from when the old board is removed and a new board is elected? I’m afraid the management company is adulterating the process through or quorum requirements and they’re not letting members of the association verify or count special election ballots.

      1. dennisl

        Only the board runs the association and can represent the association. If you have remover the entire board the states that a meeting of the members must be called within 30 days to elect a new board. A meeting of members must have a quorum to act but that quorum can be satisfied by the combination of both in person votes and absentee ballots. In fact both mechanisms must be used to call any meeting of the members. On the first day that the new board is elected they can fire the management company under the terms of their contract with them. The management company does not work for the community only the board and if no board is in place they actually have no authority to do anything because their contract is with the association and the association cannot exist without a board. If they do anything in that time period they are working for free because without a board the association cannot spend money or incur debt.

        If an election was held the ballot material must be retained and made avail to any homeowner upon request. That is the law.

        Dennis

  2. Charlotte Hazzard

    South Ranch II, Julie Anderson property manager and Mulcahy law firm are a team they have openly charged me for court fees that I never had a fair fight for in my dispute. I was discriminated against and it’s now a legal matter with the help of the law firm that put two liens on my habitat for humanity home of 2001. I want this legal extortion to stop as it should have never started. /Beth Mulcahy #017005 Mulcahy Law Firm 3001 E Camelback Rd # 130, Phoenix, AZ 85016 602 241 1093 I do not owe any outstanding debt as they have created. I speak the truth and I was a target for inhumanity for not watering a plant not in the CC&R’s. HUD please help save my home my hands have been tide and no attorney can help as they are on the HOA side.

    1. dennisl

      Charlotte,
      Without knowing all the details of your situation I can tell you one thing Beth is renowned for her abuse of homeowners and her distorted view of the law. In Arizona the association can foreclose on your home only if you are delinquent in payment of your assessments only of $1,200 or one years worth of assessment. The assessment lien on your home is statutory and automatic and does not require judicial review. However, the law does allow association to include all late fees, collection cost and attorney fees in that lien. We were able to change the law last year to require that the association provide written notice to the homeowner 30 day prior to assigning assessment debt to any collection attorney (like Beth). This notice must be by certified mail. If that notice was not provide it could be argued that all the collection cost and attorney fees charged after that failure are null and void.
      Any fines and penalties charged by an association can be a lien on the home if awarded by a court of law, but that lien is not foreclosable, and can be disposition only when you sell your house. This will not stop attorneys like Beth from charging thousands of dollars in collection cost and fee threatening to foreclose on your house for those cost just because they can. They will never win in court but they have no intention of going to court they simply want to scare homeowners into paying for their vacation homes, with these idle threats.
      The first thing that you need to do is find out if you owe any money for assessments, Arizona law requires that any money that you pay must be applied to the assessment first. But attorneys like Beth often write so called no-cost collection contracts with associations that allow them to take their cut first and pay of the actual assessment last. This is totally illegal but attorneys don’t care about the law and only want their money. If you owe any money for assessment make a check for that amount and state on it that it is for assessments only and provide that to the attorney. That action will block them from ever foreclosing on the home.
      If you need an attorney contact Jonathan Dessaules Law Group, they will help you.
      Dennis

  3. dennisl

    Dave,

    The law requires that a special meeting of the association members must be called within 30 days of any meeting where a quorum of the board is removed for the community to elect new board members to fill the unexpired terms of the removed board members. The management company plays no role in this other than to facilitate the business of the association. If there is no board the management has no authority to act in any capacity for the association. The members can call for the special meeting to conduct this vote and to elect the replacement board.

    You want to do this as soon as possible because without a board the association essentially does not exist but your CC&R’s are still recorded and valid. No home can be bought or sold in the community without a board in place to act for the association. The association also cannot pay any bills until a board is re-elected. without re-electing a board a court could place the association into receivership that will essentially eliminate all rights for any homeowner and allow the court appointed receiver to assess all homeowners whatever he deems appropriate to pay himself for that service, subject to court review.

    This is why i always remind people that if you are considering a petition to remove the entire board you have to think about the next step at the same time and call for the separate members meeting to fill any vacancies created by the recall meeting. One of Covey’s seven traits of effective leaders is to “begin with the end in mind”

    Dennis

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