When HOA members decide to remove their board of directors, the board has to participate in the process. This article explains the board’s responsibilities.
A group of owners is upset with the HOA board. They’ve circulated a petition to recall some or all of the current directors and delivered that petition to the board. What happens next? How is the board supposed to respond?
Pursuant to California Corporations Code §7222 (a), with or without cause, the membership may recall the entire board or individual directors, subject to cumulative voting limitations. This applies to both membership-elected and board-appointed directors. Below is a guideline for how the Board should respond to a recall request:
Step 1: Calling a Special Meeting
Pursuant to California Corporations Code §7510 (e), a special meeting is demanded by petition of the membership signed by at least 5% of the members. The right to call a meeting by 5% of the membership cannot be changed or eliminated by contrary provisions in the bylaws.
Step 2: Contents of Petition
The purpose of the meeting must be set forth in the petition so members know what they are signing. The board is allowed to verify signatures before setting a meeting date and giving notice of the special meeting. The petition should expressly state the reasons for the recall, i.e., that the Board has breached its fiduciary responsibility in managing and overseeing an ongoing construction project, failed to hold open meetings, etc. It should be noted whether the petition specifically requests that the Board hold the special meeting for purposes of conducting the vote on the recall and, in the event the recall is successful, that election of the new Board take place at the same meeting. The petition may be delivered personally to any officer, director or managing agent; or sent by certified mail.
Step 3: Setting the Meeting
Within 20 days from receipt of the petition, the Board must set the date of the special meeting and give notice of the meeting. Pursuant to California Corporations Code Section 7511 (c ), the Board is required to set the special meeting no less than 35 days nor more than 90 days from receipt of the petition. If the Board fails to notice the meeting within the 20 day requirement, California Corporations Code Section 7511 (c) permits the persons entitled to call the meeting to give notice after notice to the association giving it an opportunity to be heard.
Step 4: Preparation of Ballots
It is recommended that the Board start the nomination process as soon as possible for new directors in the event that the recall is successful. Once candidates are established, the association Board must prepare and issue the ballots containing the recall proposition, as well as ballots with candidates to fill the recalled seats in the event that the recall is successful. Pursuant to Civil Code Section 5115, the ballots must be mailed to the owners at least 30 days in advance of the special meeting at which the ballots will be opened.
Step 5: The Special Meeting
Pursuant to Corporations Code Section 7222, if the association consists of less than 50 members, the recall vote requires the approval of the majority of the members. In the case of an association that has 50 or more members, the vote requirement is a majority of the members present at a quorum of the members. Each ballot received by the inspector of elections shall be treated as a member present at a meeting for purposes of establishing a quorum.
The recall ballots are opened first by the election inspector. If the recall proposition passes, then the second set of ballots voting on directors to fill the vacant seats are counted at the same meeting. While the second set of ballots need not be mailed along with the recall ballots and voted on at the same meeting, it is recommended that both votes occur at the same meeting so that the vacant seats are immediately filled.
It should be noted that any recall procedures under the governing documents of the particular association must be followed in conjunction with, or instead of, the above-cited procedures, as long as the association’s procedures do not conflict with applicable law.
Avoid the Recall
Recalls are messy. They often divide communities, and the process can be expensive and confusing. Owners should exhaust all other means of communicating with the board before resorting to a recall. And boards should communicate clearly and frequently to the members in order to avoid creating the conditions that cause recall attempts.
Rosalia Burgueño Tapia of Pratt & Associates specializes in civil litigation, with substantial experience in community association law and employment law.