State statutes frequently contain provisions that require homeowners associations to include provisions in their governing documents (i.e. bylaws and/or election rules) that specify the HOA director qualifications for candidates seeking election to the board of directors. Even in the absence of such provisions in the state statutes, unless the statutes prohibit establishing qualifications for board members, it is generally a good practice for homeowners associations to include HOA director qualification provisions in their governing documents (typically in the bylaws).
Qualifications for Serving as a Homeowners Association Director.
A. Good Standing – The most typical requirement relative to the eligibility of an individual to run for a position on an associations board of directors is that every candidate must be in good standing to run for election and to serve on the associations board of directors. Good standing means that the candidate/director must:
- Be current in the payment of all member assessment obligations; and
- Not be in suspension of membership rights and/or privileges because of an infraction of the governing documents.
B. Litigation a common eligibility requirement in some associations is that the candidate / director not be in litigation with the association as such a situation would create conflicting interests.
C. Must be an Owner another common eligibility requirement is that all candidates / board members must be a record titleholder to one or more separate interests in the association. Because this qualification prohibits tenants from serving on a homeowners associations board of directors, there are conflicting views on desirability of the requirement because it eliminates access to a pool of potentially interested tenant-occupants who might make valuable contributions to the association.
D. Must be a Resident another common eligibility requirement is that all candidates for election to an associations board of directors must be a resident within the development. While this requirement is generally beneficial, it can be problematic in developments, such as resort developments, that include a large number of nonresident owners.
E. Spouses / Family Members another common eligibility requirement is that spouses and/or other blood relatives are prohibited from serving concurrently on the associations board of directors due to the potential for conflicts of interest among related directors.
F. Minimum Age Requirement Since state statutes may not have an age restriction for serving on an associations board of directors, such a restriction would have to be included in the associations governing documents. Having a restriction that prohibits minors for serving on the board of directors is desirable primarily because of issues regarding a minors right to disaffirm contracts that they enter into and the impact of that right on votes that the minor may make on contracts that the association enters into.
G. Sex Offenders and Felons Some associations have restrictions that prohibit registered sex offenders and convicted felons from serving on their board of directors. Because some states may have laws that prohibit discrimination against registered sex offenders, many associations will use a generic prohibition against felons serving on their board.
Qualifications for Remaining on an Associations Board.
Some associations also have qualifications for remaining on the board of directors. For example, besides meeting the above qualifications for election to the board, there may be an additional requirement that allows for disqualification of sitting directors from remaining on the board, or running again, if he/she has missed a certain number of regularly scheduled board meetings (i.e. three meetings in a row or four meetings in a twelve month period).
Director Qualifications Should be Set Forth in an Associations Governing Documents.
Absent a provision in governing state statutes or association articles, bylaws, or CC&Rs that vests an associations board of directors with the authority to adopt rules that specify the HOA director qualifications for service on the board, the qualifications for serving as a director of a homeowners association should be set forth in the associations governing documents (i.e. Articles of Incorporation, Bylaws, CC&Rs,). The provisions in governing documents that establish the qualifications should also provide that the board, acting by a majority vote of the directors who meet the prescribed qualifications to be a director, may declare vacant the office of any director who fails or ceases to meet any qualifications that were in effect at the time that the director began his or her current term of office.
Associations that lack sufficient provisions in their governing documents relative to director qualifications may amend their governing documents (generally the bylaws) to establish reasonable HOA director qualifications for persons who want to serve on the associations board of directors.
Vacating the Seat of a Disqualified Director.
When a director first becomes disqualified to serve as a director after he/she has been elected to the board, the remaining qualified directors can vacate the seat of the disqualified director and appoint a qualified replacement director to fill the vacancy created by the vacated director until such time as the association members elect a new director to fill that seat. Before taking action to vacate the seat of a sitting director, the board should hold a hearing to give the disqualified director an opportunity to cure the disqualifying event or present evidence as to why the disqualification is inappropriate.
Adopting Director Qualifications.
In order to implement director qualifications that do not currently exist, an association will need to formally amend its governing documents (typically the bylaws or election rules). The procedures for adopting such amendments involve various factors such as the nature and purpose of the desired qualifications and the existing language that is contained in the associations governing documents as well as the content of state statutes. Because the process of amending governing documents requires expertise that is beyond the capabilities of the volunteer board members, the proper adoption and implementation of director qualifications should be untaken with the assistance of experienced legal counsel who is licensed to practice in the state where the association is domiciled.