Beacon Management Services Topic of the Day: Should You Appoint or Wait for an Election?

How should you fill a vacant seat on your homeowners association board of directors without creating headaches within your HOA.

“First, look to your governing documents and state statutes to see if there’s anything about how to handle an appointment procedurally,” says Donna DiMaggio Berger, managing partner at Katzman Garfinkel & Berger in Ft. Lauderdale, Fla., who advises associations. “Remember that you need to appoint someone who’s eligible to serve. So eligibility rules
will also apply.”

Also look for provisions dictating how long the appointee will serve. “Does the person serve just until the next election or the remainder of the former board member’s term?”
asks Elizabeth White, a shareholder and head of the community associations practice at the law firm of LeClairRyan in Williamsburg, Va.  “That’s determined by your governing documents or state nonstock corporation act. Check both because a lot of governing documents don’t follow state code.”

“Outside of your governing documents or the law, there aren’t hard-fast rules,” says White. “But there is an analysis.”

Here are two factors to consider:

1. Don’t appoint just anybody. “Some associations really struggle to find people willing to serve on the board,” says White. “But because of your fiduciary duty, you shouldn’t appoint someone just to have a warm body.”

2. Be open with members–when it’s smart. “You might let the community know you’re looking to fill a vacant seat and if owners are interested to please let the board know,”
says Berger. “That gives a lot of transparency into the board’s process and provides a feeling of inclusion.”

However, that may not always be wise. “Consider whether you should get buy in from owners or whether there are contentious issues that will just be inflamed,” advises White.
“Some boards are dealing with high-stakes litigation with dissidents. So you have to be strategic about who fills that vacancy because that person will be privy to confidential
information. Maybe dissidents say, ‘You’ve got to appoint one of us.’ You may know that’s not going to be in the corporation’s best interest to put a dissident you’re in litigation with on the board or to even to ask for statements of interest. You may want to carefully screen and handpick a person without doing calls for statements of interest.”

Berger admits there are risks to asking members if they’re interested but says it still might be wise.

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