Q: Can a homeowners’ association (HOA) board of directors change the term served by the officers by a resolution, without a vote of the members?
Our bylaws state that officers are appointed by the board for a one-year term, yet our officers are serving for three years. When I asked the board about this practice, the answer I received was, “The officers are elected by the board from within the board. The term length for the officers was set by the board (by resolution) upon their appointment.” Also, two of our officers are board members. Is it common for officers to be board members as well?
Finally, should or must those board members who are also officers refrain from voting on the officers given the potential conflict of interest?
A: I frequently receive questions from my HOA clients about the election of officers and directors and their respective terms and duties. This suggests there is a lot of confusion among HOAs in regard to the many important distinctions between officers and directors.
Directors are elected by the members at the HOA’s annual meeting and serve whatever term is mandated by the HOA’s bylaws.
With most HOAs, the bylaws state that after each annual meeting at which directors are elected, the officers are “appointed” by the directors at the first board meeting following the annual members meeting.
There is no requirement in North Carolina law that officers be directors or even members of the HOA, but in practice, they usually are both – especially so since directors and officers cannot be compensated for serving in those capacities.
If the term an officer is to serve is set forth in the bylaws, then that is the term the board members and officers should be observing. If, for example, the term is for a period of one year, the board should reappoint the officer positions annually even if the persons serving do not change.
Extending the officers’ terms to run concurrently with the directors’ terms would require an amendment to your bylaws. This cannot be accomplished by a board resolution unless the bylaws allow the board to amend the bylaws on their own without a vote of the members.
Keep in mind that officers do not vote on board issues – only directors do. If all of your officers are also board members, this is a non-issue.
Officers serve executive functions commensurate with their titles—president, vice president, secretary and treasurer—which are described in the bylaws.
And no, it is not a conflict for board members to vote amongst themselves for officers. That’s what the law and most HOA bylaws require.