When an HOA board member resigns, very few homeowners associations know how to proceed. While the specifics will largely depend on the individual HOA, there are a few things all associations should do to make the process smoother.
HOA Board Member Resigns: What Happens Now?
Homeowners associations are run by a group of volunteers who are normally elected into positions. This group is known collectively as the HOA board. The HOA board is responsible for managing the community, sometimes with the help of committees and an HOA manager.
Associations typically need to have a set number of directors on the board as dictated by their governing documents. Every board member plays an integral role in the success of the association. As such, when one resigns, it can hinder the board’s ability to operate and make decisions.
To ensure your association can continue to function smoothly, it is imperative to know what to do in case an HOA board member resigns.
1. Make Sure the HOA Is Prepared
Preparation is the key to a proper response to an unanticipated situation. If a board member leaves their post, it can throw a wrench into the normal direction of the board. By planning ahead, HOAs can act quickly and avoid losing critical time.
But how can an association make preparations? To start, it is important to have the board review the governing documents of the HOA every year. The board should check the guidelines for board member resignations and see if they require updating. It is equally important to ensure these guidelines comply with state and local laws. When in doubt, it is always a good idea to consult an attorney.
2. Ask for a Resignation Letter
Prior to the acceptance of a board member’s resignation, the HOA board should ask to put everything in writing. The resigning board member must submit a formal letter of resignation. The letter should explicitly include the board’s intention to resign and the effective date of the resignation. This way, there is a paper trail.
3. Formalize the Resignation
After receiving the resignation letter, the board should add it as an item on the agenda of the next open board meeting. The board should follow Robert’s Rules of Order for accepting the resignation, which requires the board to formally make a motion to accept the resignation. Make sure the item also appears in the meeting minutes. After that, the board should file the letter for safekeeping.
4. Let the Residents Know
Homeowners have a right to know what’s going on in the community. And while some owners may find out about the resignation at the board meeting, you can’t say the same for all other residents. It is important to put out a formal announcement notifying the community that a board member has resigned. To ease the owners’ worries, the announcement should also explain the next actions of the board, such as how it intends to fill the vacancy.
5. Conduct an Exit Interview
Even though serving on the HOA board normally does not come with pay, it is still best to treat it as if it were a real job and go through all the formalities. This way, the association can maintain professionalism and avoid potential liability. Apart from formally accepting the resignation, the board should also consider conducting an exit interview.
The exit interview will help the remaining board members understand the reason behind the resignation. Common reasons typically fall under one of the following categories:
- The board member can no longer fulfill their duties and responsibilities;
- The board member is moving; and/or,
- There are irreconcilable differences with the other board members.
If the reason is due to personal conflicts with the board, conducting an interview may be uncomfortable. But, it is still necessary as it may provide valuable insight that may prove helpful to the board in the future.
When conducting the exit interview, make sure to use a standard set of questions. The remaining board members should never get personal or use this as an opportunity to berate the resigning member.
Some questions you can ask include:
- Can you expound on the reason you’re resigning?
- What did you like best about your position?
- What did you like least about your position?
- Do you have any suggestions to improve the board and community?
- Is there anything the HOA can do to prevent similar resignations in the future?
- Are there any other issues you would like to discuss?
6. Restrict Access to Privileged Data
Board members usually have access to privileged information and accounts. Because they are no longer part of the board, the resigning member’s access should be cut off. As such, make sure to remove the resigning member’s user credentials or change their password on all programs and websites. Restrict access to email accounts, internal documents, and other confidential information. Retrieve any hard copies of sensitive documents from the resigning member, too.
You should also notify the HOA manager, lawyer, and vendors of the change. This way, they will no longer include the resigning member’s email or contacts in distribution lists.
7. Fill the Vacancy
Depending on the circumstances, the HOA board will likely need to fill the open seat. Sometimes, a board can wait until the next election cycle. However, in other cases, the board will need to fill the vacancy to reach a quorum of board members and continue to conduct association business.
When it comes to filling open board seats after resignation, the board should look to both state laws and the association’s bylaws. More often than not, the HOA board can appoint a new board member to fill the resignation. In California, Corporations Code Section 7224 allows the board to appoint a new board member through unanimous consent, a majority of directors, or by a sole remaining director. If the board fails to appoint a new board member, members can petition for a special meeting to fill the vacant seat.
The board can choose to interview potential candidates prior to the HOA appointing a new board member. While the board can interview candidates in private, the vote to appoint the new board member should typically take place at an open board meeting.
8. Announce the New Board Member and Update All Materials
Following the appointment, the HOA board should make a formal announcement introducing the newly appointed board member. This way, all residents know about the change.
The HOA board should also make sure to update all association materials. Remove the name and contact details of the previous board member and replace them with the new one. Places to check include the HOA website, newsletters, letterheads, and distribution lists. Don’t forget to inform the HOA manager, attorney, and vendors as well.
The Final Word
Many boards find themselves at a loss when an HOA board member resigns. With this guide, associations can hopefully continue operations with minimal to no disruption. Of course, when in doubt, it is always best to consult a lawyer for guidance.
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