By Beth Mulcahy, Esq.
Recently, our firm received an urgent phone call from a planned community board asking for advice regarding a board removal petition submitted by a disgruntled group of owners in their association. Although there had been rumors that there was a removal petition circulating within the community, the Board was surprised to receive it nonetheless. After getting over the initial shock (and hurt), the Board came to our law firm to get legal advice on how best to legally handle this matter. Here are some suggestions for Boards in this situation.
1. Call Our Law Firm! Get Advice from your Community Association Attorney:
Our firm has assisted many boards through the legally complicated and emotional board removal process over the years. This is the time to bring in someone who understands
the law and the pitfalls of a removal meeting. Don’t be shy – ask for us to help guide you through this process.
2. Go online to www.azleg.gov to review Arizona Revised Statutes:
Arizona law specifically addresses the procedure to remove a Board member from office. If your association is a planned community, look at A.R.S. 33-1813. If your community is a condominium, look at A.R.S. 33-1243. These laws trump any provisions in your association’s documents (such as CC&Rs, bylaws and articles of incorporation). The procedures outlined in these laws do not apply to board members appointed by the developer (so look to your association’s documents for guidance regarding the removal process).
3. Examine the Petition:
The petition will need to be quickly examined by the association. For associations with 1,000 or fewer members, a petition must be presented to the board for removal of a director that is signed by the number of persons who are entitled to cast at least 25% of the votes in the association or one hundred votes in the association, whichever is less. For associations with over 1,000 members, a petition must be presented to the board for removal of a director that is signed by the number of persons who are entitled to cast at least 10% of the votes in the association or one thousand votes in the association, whichever is less. If the petition has the requisite signatures, go to step 3. If the petition does not have the requisite signatures, notify the association members that the petition failed (we suggest the board run the petition and the number of requisite signatures by our law firm).
4. Notice a Special Meeting to Vote on the Removal of Director(s) and Enclose an Absentee Ballot for Owners to Vote
A special meeting of the membership to vote on the removal of a director or directors must be called, noticed and held within 30 days after receipt of the petition for removal. An absentee ballot should be mailed to all owners with the meeting notice. Some boards elect to enclose a response letter regarding the removal petition (and I feel that is perfectly fine assuming a majority of the board agrees to do this). A quorum for the removal meeting purpose is met if at least 20% of the votes, or one thousand votes, whichever is less, are present at the meeting in person or as otherwise permitted by law.
5. Conduct the Special Meeting
Likely, the only business at the special meeting is to vote on the removal of the board or board members. A member of the board can be removed from office with or without cause by a majority vote of the members entitled to vote (this means in good standing, check association documents for authority to suspend voting rights) and voting on the matter at a meeting of the members (so all ballots cast in person or by absentee ballot) called for the removal purpose. A quorum must be present. In our experience over 90% of boards DO NOT get removed as there is usually high voter participation for this meeting and most owners don’t want to remove volunteer board members absent a really good reason (like embezzlement). But, like anything, there are exceptions to this rule.
6. If Removal Attempt Fails:
Be gracious and move on. Remember that there can only be one removal attempt per term: A petition for removal of the same member of the board shall not be submitted more than once during each term of office for that member.
7. If Removal is Successful:
Be gracious and move on. The Association’s legal counsel should be contacted on the method to elect (or in rare circumstances if documents allow) or appoint replacement board members.
8. Keep Petition, Meeting Notice, and Ballots for one year
The board must retain documents related to proposed removal for at least one year after the special meeting and shall permit inspection of these records by members.