As many of you know, the end of the year is a popular time for community associations to hold their annual meetings. These are not only for homeowners to get updates on their community’s status (e.g., financial strength, maintenance needs and/or scheduled projects), but they also serve as a forum for electing board members. For many communities, the annual meeting will run smoothly, with lots of participation and volunteers to fill every position; for others, however, the annual meeting may underscore many of the ongoing challenges, which often stem from homeowner apathy. So, for community associations in this second category, what happens if no one runs for the board? Or what if the entire board resigns? The answers are typically not as daunting as one may think.
What happens if no one runs for the board?
If no one volunteers to run for the board of directors, then the existing members stay on until such time as another election can be held and their successors are elected. If any board member wants to or needs to step down, he or she can do so and then the remaining board members can appoint, by majority vote, another person to take the place of the resigning director. Most governing documents provide that this person will then serve out the remainder of the resigning director’s term until a proper election is held (usually the next annual meeting). The community’s governing documents may not address every vacancy scenario, but the solution is often ascertainable by using the Georgia Nonprofit Corporation Code to fill any gaps of the association’s bylaws.
What happens if the entire board resigns?
f all the board members resign, the last remaining director to actually step down has a fiduciary responsibility to the association to ensure that a successor board is appointed. In other words, an entire board cannot resign at once without violating its fiduciary duty to the association and its members. Failing to appoint a successor board could open the outgoing board member(s) to personal liability. This is the association’s unwritten protection against ever being in a situation with no board. Regardless of how the vacancies are created, the new board should be appointed pursuant to the association’s bylaws and/or the Georgia Nonprofit Corporation Code.
Unfortunately, homeowner apathy is a reality for many community associations. In these scenarios, it may be low participation results in a failure to achieve quorum, which in turn prevents an election from taking place, or it may be in the form of no volunteers even stepping up to run for the board. Either way, there are some communities where the same individuals are “stuck” serving on the board for years on end. Although complacency amongst homeowners is oftentimes a sign that everything is going well in the community, there are certain ways to encourage more participation. If your community is struggling with this, or there are questions related to an election and/or a board appointment, you may want to contact your association’s attorney to discuss the options for moving forward.