Homeowners associations frequently have to deal with the reality of HOA board vacancies. A vacancy on an associations board of directors is created by any of the following:
a. The death of a director;
b. The resignation of a director;
c. The removal of a director;
d. An increase in the authorized number of directors;
e. The failure of the members to elect a sufficient number of new directors to fill vacancies.
Unless a vacancy is created as a result of a membership vote for removal of a director, vacancies on an association’s board of directors are to be filled by an election of a successor director by a majority vote of the remaining board members. This rule applies even if the number of remaining directors is less than a quorum. When the vacancy was caused by a membership vote for removal, it should be filled by successor director elected by the members held in accordance with any applicable state statutes and the association’s governing documents. An association’s members may also elect a replacement director or directors to fill one or more vacancies on the board when the remaining directors have failed to take action to fill such vacancy or vacancies. Successor directors serve until such time as the association conducts a membership meeting at which new directors are elected by the members.
A vacancy that results from a reduction in an association’s authorized number of directors does not automatically cause the removal of one of the existing directors. Typically, the reduced number of directors does not take effect prior to the expiration of the directors’ terms. When the term expires, there will no longer be a director elected for the position that has been eliminated.
Replacement directors must still meet the association’s qualification requirements for directors which are specified in the association’s governing documents (i.e. bylaws and rules). Typical provisions mandate that all candidates for director: (i) be in “good standing” by not being delinquent in their obligations for the payment of assessments; (ii) not be under any discipline or suspension of membership privileges in the association as a result of any infraction of the association’s governing documents; and (iii) be resident owners or the record title holder to a separate interest within the association.
Frequently association boards of directors fail to elect replacement directors to fill vacancies on their board. Such a failure to act could result from a lack of available potential replacement directors (usually more likely in smaller associations), or from a desire by the remaining directors to have more control over the association’s operations. Because an association’s directors are held to a duty to exercise ordinary care in their actions as directors, they must perform their duties: (i) in good faith; (ii) in a manner believed to be in the best interests of the association; and (iii) with the same degree of care as an ordinarily prudent person in a like position. Court case decisions have held that breaches of the directors’ duty of ordinary care could include a failure to enforce the governing documents under appropriate circumstances. Thus, it is possible that a failure to elect replacement directors to fill a vacancy on an association’s board of directors could be viewed as a breach of a breach of the remaining directors’ duties to exercise ordinary care in their actions as directors.
Since an association is operated by its board of directors acting through a majority of a quorum at proper meetings, it is critical for the smooth functioning of the association to fill vacancies on the board when they occur.