The terms “coup” and “insurrection” are making their way into everyday conversation as of late. We hear about it on the news, but what happens when your community association experiences a similar situation? Meaning, what happens when your HOA or condominium board of directors is the target of an overthrow by the members of the association? It seems to be happening more frequently and is something our firm has encountered on several occasions in the last year or so. Maybe there is something in the water!
Being a board member can be a thankless job, and it often seems like owners are never happy with the decisions being made. However, there are some things for board members to remember that can hopefully help homeowners understand the decisions, even if they don’t agree with them. Furthermore, board members should equally understand the rights that their homeowners have in the community.
First, owners are often upset when decisions are made without their input. Sometimes education about what rights and powers lie with the board of directors versus what decisions require the approval of the membership can be key in preventing an uprising. Most powers of the association are exercised by the board of directors that are elected by the membership except for instances where the declaration or state statue delegate the power to the association members. Sometimes a letter from the board or from the association’s counsel explaining a hot topic issue and who has the power to make the final decision can go a long way toward gaining an understanding.
Second, often owners perceive that decisions are being made by the board under the cover of darkness. While the more likely scenario is that it is a decision that the board has the power to make at a board meeting, there may be times when the board should take extra steps to foster transparency and include the membership. As stated above, letters or memorandums from the board or counsel can help here as well. Additionally, for particularly thorny issues, the board may want to conduct a poll of the membership to gauge the temperature of their owners. While these polls are not formal votes, they help to involve the members of the association and help to educate the board regarding what the members would like to see from their elected representatives.
Additionally, the board could empower a committee to study a particular matter. Doing so will serve a similar purpose as a poll, which is to involve others in gathering information, and will help educate the board. We have also been involved in many “town hall” style meetings where the board gets to hear from the members regarding a community issue. When there are hot topic decisions to be made, the key is often 1) transparency, and 2) member inclusion even when not necessary.
Sometimes none of the above is sufficient. Board members need to understand that members of the community under both the NC Planned Community Act and Condominium Act, and usually under the bylaws, have the right to call a special meeting of the membership to remove board members. An officer is to notice the meeting in most cases, but members have the right to demand it. Boards should often involve counsel in these instances but need to understand that counsel represents the association and not the board itself. Counsel’s role is to ensure that the proper process is followed.
If your community needs assistance and guidance in working through issues that may lead to a revolt, or if that revolt is already in the works, our attorneys at Law Firm Carolinas are ready to assist to ensure that the process is as smooth and painless as possible.