Reader Questions - Recalling Directors

Dear Kelly,

I am a new director on (our HOA) board. Some of the new directors are very concerned about the condition of our association and possible malfeasance being committed by certain members of our board. I’ve been researching websites regarding impeachment of directors. I cannot find anything relating to the subject and was hoping you could give me some guidance.

Sincerely,

G.H., San Marcos

Dear G. H.,

You refer to the process of recall, in which the association members vote to remove directors without cause. In certain occasions, a board can become so out of step, or an individual director can become such a problem, that the process of recall becomes important. However, recalls are very negative by their nature, and can be very destructive to community relations, regardless of whether they succeed or fail.

Some association bylaws disqualify directors for certain reasons, such as missing multiple board meetings, ceasing to be an owner and/or resident, or being delinquent in assessments. Except for such specifically authorized disqualifications, directors may only be removed by a vote of the membership.

The recall voting process is the same as electing directors. Ballots must be distributed to all members at least thirty days prior, must be submitted in two different envelopes, and counted by Inspectors of Election.

Recall elections can be set by the board or by a petition of 5% of the members, under Corporations Code 7510(e). Such minimal support is easy to obtain, which is itself a problem, as many recall elections begin without significant support and then fail for lack of quorum, wasting time and money.

Recalling individual directors in associations which use cumulative voting is much more complicated. Where less than the full board is the subject of recall vote, Corporations Code 7222(b)(1) protects individual directors by allowing the “no” votes on the recall to be multiplied so that “no” votes are worth more than “yes” votes. There are differing interpretations of this confusing statute as to exactly how much extra weight each “no” vote receives.

Ordinary proxies, even if permitted by the HOA, cannot be used on recalls. In HOAs permitting proxies, Corporations Code 7613(g) requires proxies used in recall to specifically state it includes permission to vote on recall.

The board cannot fill vacancies created by recall. Only the membership can do this, under Corporations Code 7224(a). So, if the association sets a recall election, a conditional election of replacement directors should be set for the same election. If the recall fails, the conditional election of replacement directors does not occur. If the recall succeeds, the old board is immediately removed. The recall ballot should include an additional section for conditional election of directors, so the HOA can continue to function.

Association vendors, including the manager and attorney, should NEVER support or oppose a recall. That is a violation of their professional ethics.

Recalls are ugly business and often fail. When recalls succeed, oftentimes a new board takes over and simply perpetuates the mistakes of the removed board. Consider not only if the community will rally behind a recall effort, but if volunteers are available who will learn how to govern properly and with the proper attitude of service. A successful recall installing a bad new board is not an improvement.

Sincerely,
Kelly

Written by Kelly G. Richardson

Kelly G. Richardson Esq., CCAL, is a Fellow of the College of Community Association Lawyers and a Partner of Richardson | Ober | DeNichilo LLP, a California law firm known for community association advice. Submit questions to [email protected]. Past columns at www.hoahomefront.com. All rights reserved®.