Residential Real Estate
Feb 22, 2023

Term Expirations & Board Resignations: What Your Association Should Know

Sponsored Content provided by Dave Orr - CEO, Community Association Management Services

Your home is your castle, and each homeowner’s goal is ultimately to live in harmony and to be confident that your largest investment will maintain its value.  Buyers seek out well-maintained and worry-free communities, which are made possible because of the many volunteers who serve their homeowner’s associations in various roles, starting with a strong board of directors.  A board of directors governs every HOA (homeowner’s association, sometimes called a community association), but what happens if nobody volunteers to serve on the board? What if their terms expire and no one wants to fill their places? Every community association needs to understand the consequences of board vacancies and the importance of having a spirited board. Here's a look at what you need to know.

What is the difference between a board member's term expiring versus board members resigning?

Important distinctions exist between a board member's term expiring and a board member’s resignation. When a board member’s term expires, their time serving the community has run out per the governing documents. Resigning, however, is more like quitting. If a board member's term expires, the remaining board members can usually appoint a replacement. However, if multiple HOA board members resign at once, it can be far more disruptive. This situation requires a special election to fill the spots (unless no one wants to run, your community might find itself in a pickle). In addition, mass resignations severely affect continuity in operating procedures and compliance with governing documents and all local, state, and federal laws.

What should you do if board member terms expire and there are no willing candidates to replace them? 

When planning for the future of your association, it is important to consider what should be done if board member terms expire and no one is willing to take their place. Fortunately, there is a solution for those residing in North and South Carolina; in this case, board members with expired terms can continue to serve until replacements are found. However, this process can be lengthy, so it's important to advertise the vacancy amongst community members and reach out to possible candidates early on so that the transition remains relatively seamless. The association’s bylaws dictate the number of board members, and it is critical that the full number of seats should be filled so that the corporate entity can function as prescribed by the governing documents.

What should you do if the whole board resigns at one time?

Facing the sudden resignation of your community association’s board members can be catastrophic. A discussion with a lawyer specializing in community management is highly recommended to ensure that all the necessary procedures are followed and that residents' rights are protected. With swift action and informed decision-making, you can hopefully avoid the trouble that can come from the mass exodus of board members.

What are the consequences of the board resigning all at once?

When an entire community association board resigns simultaneously without anyone wanting to step up to fill their place, it can be quite a dilemma. If no board is in place, there may also be legal proceedings undertaken by homeowners, service providers, and other entities. The former board members may incur personal liability. Why? Because board members have a fiduciary duty to the community. Leaving the community with no board of directors is surely a breach of that duty.

Further, the government may assign a Trustee to manage your community if a community association is left without a board for an extended period. This can have myriad negative consequences as it is expensive and may lead to lower property values. Further, who will pay its bills if the association ceases to exist? Sign contracts on its behalf? You can see the predicament board member resignation can create. Ultimately, protecting the homeowner’s association is paramount, so all steps should be taken to ensure that the situation can be remedied as quickly as possible.

How can you recruit board member candidates?

Finding candidates to run for the HOA Board can be challenging, especially if the previous members stepped down at the same time or their terms expired, and no one wanted to take their place. Without volunteers, it can be difficult to maintain a functioning board. To recruit new members, HOA boards should start by notifying existing members about upcoming vacancies. Social media, word of mouth, or community outreach can spread awareness about openings. On top of that, hold informative meetings with potential candidates so they know exactly what tasks are expected from them and how long their terms will last as board members. 

Another great way to recruit board members is to contact your community management company for help. They’ve handled just about every issue related to community association management and can give you some great tips on finding qualified candidates.

Conclusion

Having a supportive and knowledgeable board to manage the community association is essential, as leaving their positions vacant can have serious consequences. Associations must have strong, responsible leadership that encourages everyone to work together to strengthen the community through collective efforts. 

Are you interested in learning more about becoming a board member? If so, visit our Board Member Toolbox, which provides educational resources for community association board members.

About Community Association Management Services

In business for over 32 years, CAMS is North and South Carolina’s premier community management company. With experienced local managers in each of its nine regions, CAMS is dedicated to providing innovative solutions to the community associations it serves. Additionally, CAMS was featured on Inc. Magazine’s 2022 Inc. 5000 list of the fastest-growing private companies in America. To learn more, visit www.camsmgt.com/choose-cams.

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