Who hasn’t heard a horror story concerning an HOA Board of Directors abusing its powers? If you are facing a similar situation, don’t panic; the law addresses this issue and allows homeowners to remove an entire Board of Directors.
A Homeowners’ Association is an association of owners that manages a Condominium Project and is represented by its Board of Directors. The Association is governed by the Declaration of Covenants, Conditions and Restrictions (CC&Rs) and by other statutes, such as the Davis Stirling Act (Civ. Code § 4000 et seq.) and the Corporations Code. The key to a harmonious association is for the homeowners and board of directors to strictly comply with all applicable rules.
When Conflicts Arise
The personality and experience of each Board Member plays an important role in the successful management of an association. Often, conflicts arise as a result of an incompatibility of temperaments or inexperience of Board Members. This can lead to abuses of power and violations of the CC&Rs (e.g., refusal to authorize reasonable improvements to an owner’s unit, uneven imposition of rules and regulations among the owners, unreasonable entries into an owner’s unit). On occasion, the mismanagement is such that the only way to protect the homeowners’ interests is to cause the entire Board to be removed.
Removal by the Owners
The entire Board of Directors can be removed by a majority of the owners without cause. Such removal is straightforward. It does not involve any cumulative voting issues. If the association is fewer than 50 members, the removal must be approved by the affirmative vote of a majority of all members entitled to vote. (Corp. Code § 7222(a)(1).) For larger associations, the removal must be approved by the affirmative vote of a majority of the votes represented and voting at a duly held meeting at which a quorum is present (which affirmative votes also constitute a majority of the required quorum). (Corp. Code § 7222(a)(2).) Note that the removal of less than the entire Board is more complex and can be blocked by a minority of voters when cumulative voting is allowed. Therefore, the most efficient way to proceed is to remove the entire Board.
How to proceed? First, the majority of the owners entitled to vote needs to submit a petition for removal to the Board. That is, the owner-petitioners inform the Board that they want to remove the entire Board of Directors and, if such removal is for cause, explain the reasons why they are seeking such removal (i.e., list the mistakes or offenses by the Board of Directors). The Board is then compelled to set the removal election date, to distribute the required secret ballot materials (Civ. Code § 5100 et seq.), and to schedule a meeting to vote on the removal. If a majority of the members entitled to vote approve the removal of the Board, the Association will need to proceed with a new election. If the majority of vote cannot be obtained, the owners won’t have a choice but to attempt to reach a consensus. Be aware that strict compliance with secret-ballot voting procedures is required for a valid vote.
For assistance with your homeowners’ association, please contact us to request a consultation.