Directors Resigned in Middle of Recall
Hello Dennis,
We collected signatures for a recall meeting for all 3 members on the board and submitted them end of August. In an attempt to make things clearer, I’ll refer to them as Director Frank, Mary and Tom. We had well over the amount the ARS and bylaws required (bylaws required a less amount, but we wanted to clear both bars just in case). A recall meeting was scheduled end of this month. Our bylaws allow absentee ballots, and talking to others it sounded like a large amount had been submitted to remove. I believe our directors saw the inevitable, and all resigned immediately without appointing any replacements. We’re also fairly certain they sought out legal council on how best to circumvent our recall efforts.
We believe their plan is to wait out the year and then for 2 of them (Mary and Tom) to take their positions for their new term starting in Jan. Those 2 would then appoint the director Frank, who was a director this year, shortly after. We have an oddity in our bylaws that states our elections happen in April, but those elected don’t officially take their positions on the board until the next year. So this year, there were 3 new directors elected who didn’t officially being their terms until Jan 2024, 2 of those directors being Mary and Tom. Director Frank appointed himself president after he took over the board, then appointed directors Mary and Tom directors early. The 3rd elected director was excluded, likely wouldn’t agree with him on every decision although I believe the stated reason was because he had fines.
So long story short, we no longer have any directors appointed to the board for the remainder of 2023. They plan on regaining control of the board in 2024 with a 2/3s, eventual 3/4s majority after they appoint the old director. Is there anything we can do to appoint a new board for the remainder of the year? I’m concerned we are opening ourselves up to all kinds of trouble without having anyone on the board. I’m not even sure how our management company can operate without a board in place. The community is upset enough by all this, that if we can get a board in place even for the next 3 months we could change our bylaws. I believe we could create another petition to have them removed again in 2023, as there was never an election for the former petition. But, the community is very concerned with giving them another couple months to waste homeowner fees on lawyers and possibly even go after previous board members.
It would seem that ARS 10-3811 3. F. grants us the right to call a special meeting and elect new directors, at least to the end of the year?
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So I misread a section of our bylaws that I originally thought only applied to the original transition from the builder. I couldn’t figure out how to edit my original post, so hopefully you’ll see this first.
Our bylaws state that 3 groups of up to 2 directors each serve 3 year terms, for a max total of 5 directors across all groups. Each group was staggered originally so only a single group’s term renewed each year. Our previous boards may have been trying to follow this by having elections for all open terms across all 3 groups every year, depending on which were open, and assigning them based on number of votes each.
Justin
Could you please send me a copy of your bylaws as what you explained in your post is totally unbelievable and unusual. Use my email address on the top of this page. Through all my experience with communities have I ever seen such a complicated and confusing process for board election. How many board positions do you have and how many are actually filled by elected board members or appointed board members. You mentioned that three board members resigned if that is a quorum then any remaining board members must call for a special election to fill the vacant board positions for the remaining terms of each vacancy. Once elections are held the elected board takes position immediately. Officers are elected by the board and not appointed by anyone.
I cannot respond to your question because I cannot relate to or understand what you are describing.
Dennis
Dennis,
I sent over the bylaws and some more (probably two much) info over in email. I neglected to answer one of your questions though. Our bylaws allow a max of 5 directors. There were 3 directors on the board total, all 3 resigned. We now have zero directors.
I included this in my email, but it may be that 2 additional directors were wrongly excluded from board meetings who should have been on this year, but I’m not entirely certain.
-Justin
Justin,
I’m assuming that the period of declarant control has ended for your community, or you wouldn’t be electing board members at all. Your bylaws clearly state that after the period of declarant control you must have 5 board positions. Your bylaws and CC&R’s are the worse that I’ve ever seen in all my years reviewing these documents. So bad so that I cannot believe that any of your actually saw any of these documents before you bought your homes in this community. The optional provision allowing 1 to 5 directors only applies to the period of declarant control. Right now, you need a special meeting of the members to elect all five board members to fill the unexpired terms of the vacant board members. This needs to be the focus of your community. Those board members will take office immediately and fill the terms as previously established, the April annual meeting of the members will elect any board member whose term expires at the end of 2024. And then order will be restored to your community based on your bylaws.
Dennis
Dennis,
We attempted to call a special meeting through our HOA Management company, but can’t get a response out of them. Should we host this special meeting ourselves and make them aware of the results after?
Thanks,
Justin
Justin,
Do not attempt what you suggested or you risk law suits. If you want a special meeting for the members to take any actions that they are allowed to take then you can request that special meeting of the members with a petition signed by 25% of the community to call that special meeting and the purpose of that meeting. The association then has the obligation to call that meeting and notify every member of that fact at their address of record. Unless you know that official address of record there is no way that you can officially call a meeting of the members. You can call informal meeting of the members to talk about anything related to the community but you can take no action in those informal meeting.
Dennis
Dennis,
We did not have the meeting on our own and are collecting signatures again. Quick question about signature collection, can we utilize community areas to collect signatures? I was hoping we could post a notice to our community ran Facebook group that we’ll be collecting signatures at one of our parks over the weekend. Or do we need to go door to door again?
~Justin
Justin,
You do not need to do anything to gather signatures. and you are free to use any method that you like. If you want to use community facilities to have an informal meeting to gather signatures the law protects that approach. The law says nothing about Facebook pages run by the community so they will be free to regulate the use of that system for their accounts, they cannot regulate private accounts.
Dennis
Dennis,
Does the petition need to include the date in time in which we wish to call the special meeting? Or can we collect the signatures ahead of time and then specify the time of the meeting when submitting the petition? I’m hoping we can specify a date at some point, otherwise I’m worried the meeting will be scheduled after our resigned board members take positions again in January. Our management company is even less responsive than normal. I never even received a reply to my request for a special meeting after multiple follow ups.
Assuming we have any control over the special meeting date, I’m struggling to figure out how much lead time we need to give our management company. Our bylaws conflict with ARS statutes on notice times for special meetings. Our bylaws state not less than four nor more than ten days before a meeting. ARS statute states “Not fewer than ten nor more than fifty days”. Both are written assuming we have actual board members, which we do not.
You wrote:
– “The association then has the obligation to call that meeting and notify every member of that fact at their address of record.”
What does “the association” refer to in that sentence? Our board completely resigned. Is it our management company?
Thanks,
Justin
Justine,
First the management company can never be the association. Only the members represent the association. The management company works for the association. Do not put a time and date on the petition. Once the petition has the required signatures than any member of the association can direct the management company to arrange for and call for the meeting of the members. You should leave that detail to the people that actually have to make that happen. A notice has to be sent to every member at the address of record on the association records. Only the management company or board knows that complete list. A facility has to be located and reserved and absentee ballots sent out. The meeting has 30 days from the filing of the valid petition to be held.
You mention that the entire board has already resigned, because of that you do not need a petition at all. A member of the community can simply direct the management company to call for a special meeting of the members to elect a board to fill all the vacant terms for the remainder of those terms.
State law dictates this process over anything in your community documents. Because this is not a recall vote the 30 day time limit does not apply and the 10-to 50 day notice requirement applies.
Dennis
“A member of the community can simply direct the management company to call for a special meeting of the members to elect a board to fill all the vacant terms for the remainder of those terms.”
I tried this, twice and the management company refused. The last response I got was:
“Thank you for the email. The Board has been elected and will take office in January.
We are following the direction of legal counsel.”
Our former board met with an attorney or attorneys for our community who apparently decided it’s OK for our association to not have a board for 3 months. The petition was an attempt to force a special meeting. We submitted it on 11/15. I finally got through to someone on the management company last Friday (11/17) who said they sent the petition over to “our attorney”. No idea who our attorney is, as there was no mention by our former board of an attorney being hired.
I am almost certain they are going to refuse the meeting again. It seems that hiring an attorney to spend even more money to fight the attorney we are probably already paying for may be our only option. Not really certain what else we can do at this point.
Justin,
My response was to a member who’s entire board had resigned so there was no board in place. If your entire board resigned, then who called for the meeting to elect the new board and how was that election organized. The law requires everyone to be notified of the special meeting to elect the board between 10 and 50 days prior to the meeting. The new board cannot be appointed by a board that resigned and only the members have the authority to elect board members. The law is clear here and no attorney has the right to create new law only the legislator’s do. I don’t care what the attorney said or what the community manager claimed they were both FOS. You have no lawfully elected board and either they allow you the opportunity to properly elect the replacement board or you will supply a petition to recall the entire board the day that board takes office. If they refuse to honor that petition the board in place will be removed by law at midnight of the 31’s day after the receipt of the petition and the members will be allowed to elect their board for the remainder of the previously established terms. If it comes to this let me know and I’ll help you organize the correct actions.
Dennis
Justine,
First the management company can never be the association. Only the members represent the association. The management company works for the association. Do not put a time and date on the petition. Once the petition has the required signatures than any member of the association can direct the management company to arrange for and call for the meeting of the members. You should leave that detail to the people that actually have to make that happen. A notice has to be sent to every member at the address of record on the association records. Only the management company or board knows that complete list. A facility has to be located and reserved and absentee ballots sent out. The meeting has 30 days from the filing of the valid petition to be held.
You mention that the entire board has already resigned, because of that you do not need a petition at all. A member of the community can simply direct the management company to call for a special meeting of the members to elect a board to fill all the vacant terms for the remainder of those terms.
State law dictates this process over anything in your community documents. Because this is not a recall vote the 30 day time limit does not apply and the 10-to 50 day notice requirement applies.
Dennis
“My response was to a member who’s entire board had resigned so there was no board in place. If your entire board resigned, then who called for the meeting to elect the new board and how was that election organized.”
I covered this all before but there’s a lot to unpack and it was months ago, so I don’t expect anyone to remember. I’ll try and recap as briefly as possible.
Our bylaws are broken. We have elections for new board members in April each year, but our bylaws state they don’t take positions until the following January.
– This last April 4 new people were elected.
– One resigned / refused to serve immediately to avoid working with our president.
– President then appointed 2 of the 3 remaining people early, because 2 of them would agree to anything he wanted.
– Several months go by, board causes all kinds of issues.
– We submit a petition to recall all 3 board members. They met with an attorney a couple times, then all resigned mid-late September prior to the recall vote.
– The 3 members that were elected in April plan on taking positions again in January. 2 of those 3 were those that resigned to avoid recall.
– HOA Management company refuses to hold a special meeting to appoint a new board, and we’ve been without one for 2 months.
Come January 1st I fully expect 2 of the 3 board members to remove the 3rd board member, then appoint the president. They’ve shown they’ll go to extreme ends to maintain control, and we’re desperately trying to prevent it. If they get back in January, then I believe we’re in for a world of problems.
Justin,
I’m sure that you can understand that your delayed office taking for the elected board causes extreme confusion. Typically, all board members take office immediately after the election. First of all, the board has absolutely no authority to remove any duly elected board member at any time. So, on January 1st the elected board takes office unless any elected board member resigns or is recalled at or around that date. So, to deal with your specific community you have to talk about sitting board members and elected board members separately. The law is written to address the norm of elected board members become sitting board members immediately upon election. The quorum of the board only has the power to appoint vacancies in sitting board positions, not in elected but not yet sitting board positions. So, if any of the sitting board members resigned, they resign for the remainder of their term which expires on December 31, 2023. If elected board members who are not sitting board members resign before they actually take office then their seat on the board cannot be appointed until January 1st, 2024 when the vacancy is actually created.
If the community is not happy with the board that takes office based on the election of April 2023 then initiate a petition now and submit it on January 2 of 2024 for a special meeting of the members to the recall of all board members by name. The association will have 30 days to call and hold that special meeting or the entire sitting board is removed by law. The members can then call for a special meeting to fill all the expired terms of the board. Make it an issue that the new board must change the bylaws to removed, the delayed seating of the elected board. The new elections should take place sometime in January every year thereafter with the board taking office immediately upon election.
This will get your community stable and clearly identify who is on the board at any time.
Dennis
The delayed office taking is very confusing, and was never followed by previous boards. Newly elected members took their positions immediately. The bylaw was being ignored for years until our former president got control and used it to his advantage.
Our bylaws specifically state the board can remove board members with a 2/3rds vote if a board member fails to meet certain criteria which that 3rd member would fall under. Is there a state law that prevents it?
Our bylaws also state “The number of directors in the Association shall be not less than (1) nor more than (5).” Based on your previous advice, it was my understanding we should be able to appoint 5 board members immediately and that’s the course of action we have been attempting. I don’t see that in this thread here, but here’s the email body I’m referencing:
From:
Date: Fri, Sep 29, 2023 at 6:49 AM
Subject: RE: [Arizona Homeowners Coalition | HOA TRUTH.] Comment: “Directors Resigned in Middle of Recall
“Your Bylaws contain many unusual and inappropriate if not illegal provisions, but I now understand your situation. One thing your bylaws do say is that you must have 5 directors following the period of declarant control. Since the entire board resigned and no one is currently running the association any member of the community can call for a special meeting of the members to elect a replacement board to fill the unexpired terms of resigned board members. Your community management company must call and arrange for that meeting the same way they would do it for the board of directors. The members decide who will be on the board not any individual board member. Because you have no current board the newly elected board will take office immediately, and nothing will change in January. In April of 2024 you will hold an annual meeting and elect any board member whose term will expire in January of 2025. You must do everything in your power to keep Frank off the board. Once a board is elected the board itself elects the officers and individuals do not appoint themselves to any office.
—-
Really not sure what to do next. They consulted an attorney on how to maintain control through the recall. If the recall would have happened, then they could not have served their next term as their current and next terms overlap. My fear is they will continue use this attorney if we request another recall to figure out a way around it. For example, I could see them appointing a new person after the petition has been submitted and mass resigning shortly after to cancel the recall again. Not sure if that example is legal or possible, but my point is they will do anything to avoid being recalled. If we could even appoint 2 people to the board now for the 2 unelected terms, it would prevent all this from happening.
Justin,
Your bylaws require 54 board positions following the termination of the period of declarant control. It does allow 1-5 while under declarant control but not after. State law allows only one process other than resignation for the recall or removal of a board member no matter what your bylaws say, and that is the recall process. This fact has been upheld in many court cases in the past. You stated earlier that the entire board is elected every year in April, now you mention that the board has staggered terms, which is it? The point is unless the board revises the bylaws they must operate under those bylaws as written. What you have to do is figure out if any board members are in place at this time? If none, but a new board will take office on January 1st than wait until then and circulate a petition to recall any board members that contributed to this chaos. Then you will get an opportunity to re-elect the entire board, revise the bylaws and convene elections in the January time frame every year. I would also strongly recommend that you increase the term of the board to two years and stagger the terms so that 3 members are up for re-election one year and the other two the next for continuity of the board.
I can only respond to the information that you provide me, and cannot read your mind because I do not live in your community.
Dennis
“State law allows only one process other than resignation for the recall or removal of a board member no matter what your bylaws say, and that is the recall process.”
This is really good to hear. I was very concerned because our bylaws state “…may be removed by the vote of at least two-thirds of all directors at a regular or special meeting of the Board…”.
I don’t believe I ever stated the entire board is elected every April, but if I did then I apologize. I explained it in one of my first comments – https://hoatruth.com/2023/09/28/directors-resigned-in-middle-of-recall/comment-page-1/#comment-2905.
We’ve had elections every year to fill open terms. Our bylaws have a long section about how there are supposed to be 3 groups of 3 year terms staggered across 3 years, so each year we elect a specific group of 1-2 people. I don’t know if previous boards were really following this exactly, as we had trouble filling positions and the bylaws were are confusing, but there were elections every year.
I realize fully how messed up this situation is, as I’ve had the pleasure of attempting to explain it to other members in our association multiple times. I really appreciate you taking the time to respond as well. However, if anything I’ve provided too much information here and over email.
Maybe that’s the problem.
“What you have to do is figure out if any board members are in place at this time?”
I don’t know how to answer this anymore. I assumed when an entire board resigned that we had no board members in place. There’s certainly no board to contact right now. I have no idea how it’s ok for our Management company to be making decisions without one for 3 months, but here we are. What I’m being told from our management company and it sounds like you as well, as that because we have people elected to take office in January that we do have a board?
But if the above is true, then why was our recall canceled? 2 of those members being recalled that were currently on the board serving a different term. We didn’t recall a term, we recalled a person, right?
Justin,
If you have 5 board position and three resigned but the other two board positions were vacant at the time then you currently have no board. But because three board members were elected in April and take office in January you will have a quorum of the board in January, and they are allowed to fill the remaining vacancies for the remainder of those positions’ terms. You never recalled anyone, and any active board member that resigned during their term cannot be re-appointed for the remainder of that term. A board member that resigns, only does so for the remainder of their current term and are free to run again when that term expires. Even if you did hold a recall vote it would have been only for the remining term of that individual director. Your management company is not right, you do not have an active board and have not had an active official board since the only board members all resigned. The board that was voted in in April does not take office until January 1st. You should have held a special meeting of the members to fill the vacancies of the active board when they all resigned for the remainder of their term. The management company has absolutely no authority to do anything without a board in place to direct them. They cannot act for the board that does not exist, they can and must act at the direction of any current member if there is no board in place. You cannot play games with the bylaws because it is convenient you either comply or you violate your own governing documents. While all homeowners are required to comply with the governing documents so are the board of directors, this is not optional. All of this is somewhat moot at this point because the elected board will take office on January 1st. My advice to you remains the same if you are concerned about the gaming and integrity of the board that will take office in January then start a petition today and submit it to the Board on January 2nd of next year for a special meeting to recall the entire board. In the mean time start working on finding candidates that will be willing to run to fill the vacant seats. The sooner you do this the better you will be. If the three board members appoint two other oof their friends to fill the other vacant seats then it will simply complicate your community more and make it more difficult to get your bylaws changed and corrected.
Dennis
In my last comment, “We didn’t recall a term, we recalled a person, right?” shouldn’t have been a question. We submitted a recall petition for all 3 board members by name. A meeting was scheduled for the recall, then the entire board was resigned. The recall was then canceled because “Due to the resignations, the Recall election has been cancelled.”
“You should have held a special meeting of the members to fill the vacancies of the active board when they all resigned for the remainder of their term. The management company has absolutely no authority to do anything without a board in place to direct them.”
This is really frustrating because this is exactly what I tried to do. I told our management company I was calling for a special meeting to fill the vacancies and the declined, stating that because the board will take office in January there was no need. I tried again because the management company switched representatives on us, but was again denied. Then, we then gathered signatures petition to hold a special meeting to try and force them to act. I submitted those last Wednesday. The only response I received was that the petition had been sent over to our community’s attorney.
“If the three board members appoint two other oof their friends to fill the other vacant seats then it will simply complicate your community more and make it more difficult to get your bylaws changed and corrected.”
They will do this at the earliest possible time they can. This is what we’re desperately trying to prevent. The only thing working in our favor is 1 of the 3 board members is not on their side, so they can’t do it all over email with unanimous consent as specified in our bylaws. They’ll have to give notice and hold a meeting, but they will get that done before a recall I’m sure unless there is some other way to prevent that.
Since when does a management company get to spend association money on a legal opinion without a board to authorize that expenditure. The management company has no authority to spend or even pay any bills without a board in place. This management company is out of control as well. As for your concern about e-mail appointment of board vacancies or action by unanimous consent no matter what your bylaws allow those actions violate the open meeting laws for these communities except for emergency actions. The re is no way that the board can invoke an emergency to fill vacant board positions that have been vacant for over a year.
Dennis
I’m sorry, I missed this previously.
“You never recalled anyone, and any active board member that resigned during their term cannot be re-appointed for the remainder of that term.”
I fully understand we didn’t recall anyone. My point was our management company, and maybe the attorney, is taking two opposing positions at the same time. 1) The recall was canceled because we have no board. 2) We don’t need a special meeting to elect a board because we already have one that takes their positions in January.
It’s extremely frustrating because it doesn’t seem to matter what we know or do, there is no way to force our management company to elaborate on their position or do anything at all, even when we are right.
Is there an ARS or anything I can point to that states this? I was looking for exactly this statute or law, but couldn’t find one. The terms for 2 that resigned ended on 4/30/2026. This means if they get recalled again and decide to resign then they can’t come back without an actual election. So no musical chairs then it sounds like?
Justin,
There are a lot of games that boards guided by their attorneys and community managers can play under the current laws, because there are not any specific laws preventing that action. There is absolutely no way that I can try and enact laws to address any possible abuse by attorneys. Their perspective is that they can do anything that is not specifically prevented by law. That is why I work so hard trying to improve the clarity in the law to prevent abusive interpretations.
A board member is elected or appointed for a specific term, if he/she resigns it is for the remainder of that term. As I’ve stated for a dozen times so far, the root of your problems is the confusion caused by the delayed seating of your elected board. You elect a board in April who take office in January. That is just stupid. The seated board continues to operate the community after a new board is elected. When your entire board resigned then you should have either seated the elected board or held an election to fill the vacancies until the terms ended. Without a board any member of the community can take the action to direct the community manager to call for an election or go to court and have the court put the community in receivership. The management company has absolutely no authority to do anything other than what the board tells them to do including paying any bill including their own. You can continue to complain about what has happened to your community or you can take action and fix those problems. In one month, the elected board takes office, if they constitute a quorum then they can appoint any remaining vacancies for the remainder of those terms. There is no law that prevents them from filling one of those vacancies with someone that was previously on the board and may have resigned. While that makes no sense, why would anyone who resigned their position then agree to be placed back on the board later and within their prior term, it is not specifically prevented by law. If you are not happy with the board that was elected then call for a special meeting to recall the entire board and then hold another election to fill all those vacancies, Once you do that fix your governing documents to eliminate the delayed seating of your board.
No-one will fix the issues in your community for you, you either take control or take whatever you get from that board.
Dennis