By Attorney Avi S. Tryson
Q: We recently had 4 out of 7 Board members resign. Our Bylaws state “In the event of the death, resignation, or removal of a Director, his successor shall be selected by the remaining members of the Board and shall serve for the unexpired term of his predecessor.” Last year we had 1 vacancy created in October and the Board selected the replacement after our annual election in December. The Board chose to select the candidate that achieved the “next highest vote” as their method to select. Our Bylaws do not state when or how a replacement board member is appointed. Now it appears our legal team is advising the 3 remaining Board members (of which 2 will be up for re-election in December) that they have no choice but to appoint 4 (the majority of our community’s Board) now to fill the vacancies. Some of us believe the remaining board members must choose to fill 1 vacancy to get to a quorum and the Board may operate that way until the December election if they want. Since it’s a director’s fiduciary duty to do what’s best for the community, are they able to interpret our Bylaws to allow a delay in filling the vacancies? Our community has over 1,600 homes and the residents would prefer a democratic process. What can we do to avoid a “hand-picked” Board of Directors?
J.L., Miami, FL
A: By your description, I am assuming that your community is a homeowners’ association. The Florida Homeowners’ Association Act, codified as Chapter 720, Florida Statutes, provides that, unless otherwise provided in the bylaws, any vacancy occurring on the board before the expiration of a term may be filled by an affirmative vote of the majority of the remaining directors, even if the remaining directors constitute less than a quorum, or by the sole remaining director. In the alternative, a board may hold an election to fill the vacancy, in which case the election procedures must conform to the requirements of the governing documents. Since your bylaws do not provide for anything different (in fact it appears your bylaws provide the same language), the remaining board has the authority to fill all of the vacant seats. Note that the board can choose not to fill all of the vacant seats, or they can choose to hold an election of the members if they wish, but that decision is solely at the discretion of the remaining board as to how they wish to proceed. Nothing in the statute or the language from your bylaws that you provided would require an election from the members to fill any of the vacancies. Please note that if the board chooses not to fill any of the vacant board seats, Section 720.3053, Florida Statutes, provides that “if an association fails to fill vacancies on the board of directors sufficient to constitute a quorum in accordance with the bylaws, any member may give notice of the member’s intent to apply to the circuit court within whose jurisdiction the association lies for the appointment of a receiver to manage the affairs of the association.” The remaining board has 30 days from the date of the notice to fill enough of the vacant seats to constitute a quorum, or else the petition to appoint a receiver may be filed with the circuit court. Appointment of a receiver is a drastic step, and one that comes with a number of potentially unintended costs and consequences to the association. Oftentimes this step is only used to force the board to fill the vacancy or vacancies within the 30 day window so that the association can continue to operate.