How Do You Recall One or More Board Members?
Your association is 30 years old. The common areas are in disrepair. The sidewalks are cracked. The play equipment on the playground is broken. The swimming pool cannot be used because the filtration system is inoperable. You request the board of directors to take action to improve the common area. The board fails to take any action. The next election of the board is not for 2 more years and you do not want to wait 2 years to replace the board. As a last resort, you decide to proceed with a recall of the board of directors.
How do you do this?
There are three statutory grounds for removing board members. First, under Corporations Code section 7221, a board member can be removed for cause. This means a felony conviction, a court determination of unsound mind, a failure to attend board meetings as required by the by-laws or a failure to meet the qualifications of directors. For an example of the last category, the by-laws may require that the director own and occupy a residence within the association. If a director is no longer an owner/occupant, the director can be removed for cause. This removal requires a majority vote of the board of directors.
Secondly, under Corporations Code section 7223, a member of the board of directors can be removed through court action in the case of fraudulent or dishonest acts or gross abuse of discretion.
Finally, under Corporations Code section 7222, one or more of the directors may be removed without cause by vote of the members. If the association consists of less than 50 members, the vote requires the approval of the majority of the members. Thus, if there are 48 members, 25 members must vote in favor of removal. 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. Removal without cause becomes complicated where cumulative voting is permitted in the selection of directors by the governing documents. Cumulative voting allows a member to cast more than one vote for one candidate. Where cumulative voting is permitted, no director may be removed (unless the entire board is removed) where the votes cast against removal, if cumulated, would be enough to elect the director. This provision makes it extremely difficult to remove a director where there is cumulative voting if there is any significant opposition to the removal of the director. If this is the case, the best way to succeed in the recall is with a vote to remove all the directors at one time so as not to be concerned with the cumulative voting requirement.
The recommended procedure is that the petition to remove one or more board member, should also call for new replacement board members to be elected. If this is not done, the recalled directors remain in place as directors until replacement directors are elected. Having recalled directors remain in the position as directors until the replacement directors are elected is probably not in the best interest of the association. Therefore, the recall and replacement should be on the same petition.
By far the most common method for removal of directors is the removal without cause by the membership under Corporations Code section 7222. Since this is a removal without cause, there is no requirement that the petition specify the reason for the removal of the directors. In other words, the petition does not need to state that the directors are not maintaining the common area property as they should.
The procedure for scheduling the recall of the directors is fairly simple. A petition must be presented to a corporate officer (president,vice president or secretary) with the signatures of members who represent at least 5% of the membership of the association. The petition must call for the recall of the directors and it must contain the printed and signed names of the petitioners with their lot number and/or address. The petition should be drafted by counsel to ensure that there are no technical defects.
Within 20 days of submittal of the petition, the board is to notice a meeting. The meeting must be held 35 to 90 days after the petition is presented. If the board fails to act, the petitioners may call a meeting of members without board action. The director(s) whose removal is sought is entitled to have an opportunity to respond to the petition.
The current board of directors may resist the recall petition and may choose to fail to cooperate with the process specified by the Corporations Code for removal of directors. Court action may be required to force the matter to a vote.
If the board of directors is not fulfilling its fiduciary duty to its members, the members should notify the board of its obligations and the corrective action requested. If this approach is unsuccessful, the members should consider a recall of the board as a last resort. This article is intended to provide the members with the general requirements for a recall. Competent counsel should be consulted for assistance with the technical aspects of a recall.
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