REPLACING BOARD MEMBERS
Problem: One member of our seven-member board has resigned, leaving us with only six members. The association’s documents require a seven-member board, but the next election, at which a new board member might be elected, is several months away and there don’t appear to be any owners willing to fill the vacant position.
Potential solutions to this problem
have several components.
The key issues:
What does the documents require
Whether the board can operate with less than the required number of trustees
Options for filling the vacant position
What to do if no one is willing to serve on the board
As with most condominium questions, the best place to start is with the documents. Most documents (although not all) specify the number of trustees required for the board. If not, the board can continue to operate normally despite the vacancy. If the board has fewer trustees than the documents require, however, any decisions it makes could be subject to challenge.
One option is to make decisions anyway and hope they aren’t challenged. But given that there is almost always at least one owner in any community– and often more – who will challenge almost anything for any reason, this is not the wisest course.
While the position is vacant, the board should avoid making any major decisions – imposing a supplemental assessment, for example, or approving a major renovation project, since these are most likely to be challenged. But if action is essential – to repair a leaking roof or buildings damaged by a fire, for example ꟷthe board should make those decisions and worry about challenges later. As a practical matter, the potential legal liability for failing to make decisions, required to protect health and safety or to prevent further damage, exceeds the liability risks for making decisions that are essential but are not technically authorized. Few courts are likely to rule against the board in these situations.
Although vacancies could theoretically hamstring the board, at least temporarily, in associations that are professionally managed, paralysis is rare. Managers typically have the authority to handle day-to-day decisions, ensuring that invoices will be paid, maintenance requests will be handled, and essential operations will continue without interruption until a new trustee is elected.
Filling the Vacancy
The documents may or may not specify the procedure for filling a vacant board position.
Although there is no “right” answer for all boards in all cases, it is almost always best to allow owners to vote on the new trustee. So, the first choice would be to elect a new trustee at the next annual meeting. But if the next meeting is several months away, as in this example, that may not be ideal. In that case, the board might hold a special election to fill the vacancy. Alternatively, some documents specify that if an election can’t be held within a certain period of time after a vacancy develops, the board has the authority to appoint a trustee to fill the position. There are three potential problems with this approach:
Some owners may object to having a trustee appointed rather than elected.
A deadlocked board may not be able to agree on a replacement.
The documents do not always specify whether an appointed trustee serves for the remainder of the unexpired term or only until the next election, requiring the board to make that decision and creating the potential for an owner challenge.
Given these concerns, boards should usually consider the appointment option only if an election is not feasible and they are facing an essential decision that might be challenged, or on which the board might be deadlocked if operating with fewer than the required number of trustees.
If Noone Wants to Serve
Another major problem many boards face when dealing with a vacancy is the difficulty finding owners who are willing to serve.
Apathy is a challenge for most communities and there are no easy solutions to it. One option is to amend the governing documents to reduce the number of trustees required. But if apathy is a problem, the board may not be able to persuade the percentage interest of owners required by the condominium documents to approve the change. The best strategy, usually, is to explain the problems that could arise if the board lacks the authority to make decisions required to collect common expenses, approve a budget, pay bills, plow the streets and authorize essential repairs. If the condominium can’t function, the courts might have to appoint a receiver to take over its operations, a worst-case situation that most owners will want to avoid.
Contact Attorney William Thompson to further discuss the consequences of a vacancy.