Q: Our HOA board members were all elected for a one-year term, and that term has now expired – and the board has not scheduled a members’ meeting for elections. Do the current board members serve indefinitely, or do we have a board of directors with no authority whatsoever?
A: Under the N.C. Nonprofit Corporations Act: “Despite the expiration of a director’s term, the director continues to serve until the director’s successor is elected, designated, or appointed and qualifies, or until there is a decrease in the number of directors.” Thus, the current board remains in place until their replacement is elected or appointed. If your board is refusing to call an annual or special meeting on their own initiative, review your bylaws and follow the procedures for the calling of a special meeting by the members – which usually require the written request of 20 percent or more of the members.
Board cannot form itself
Q: Every person serving on our HOA board of directors either resigned or left the neighborhood, leaving us with no board members. A group of nine people recently got together and declared themselves to be the new board. There was no vote of members taken. Is this a legally constituted board?
A: Under North Carolina law, directors of nonprofit corporations typically must either be elected by the members or appointed by the other existing directors to fill a vacancy on the board.
Thus, if there was no vote, and there was no existing board to appoint these people to vacant positions, they are not a legally constituted board. In order to legitimize their positions, the acting board members need to call a special meeting of the association for the purpose of electing a board of directors (see your bylaws for procedure for calling a special meeting).
If apathy or dysfunction has been so rampant that all of the former directors resigned, you should consider yourself lucky to have nine willing volunteers to serve on the board. However, they do need to follow proper corporate protocol if they want to avoid challenges to their legal authority.