If you’ve ever attended your HOA’s annual meeting, you are most likely in the minority. Many HOA’s cannot muster a quorum, absent board members going door to door to obtain proxies, and even then it can be a close call. I know of one HOA in Oregon that could not obtain enough votes even when the issue for vote would have reduced members’ assessments.
One item of business at most annual meetings is the election of the board of directors. What happens if the HOA cannot raise a quorum? How does it continue to operate? This question was before the Washington Court of Appeals in the matter of Parker Estates Homeowners Association v. Pattison.
In Parker, due to the inability to obtain quorums in successive years, the HOA followed a practice of board members continuing in office year after year, or if a resignation occurred, the remaining board members would appoint a successor to fill the vacancy. This practice was challenged when the HOA attempted to collect assessments from Pattison, who argued that the HOA lacked the ability to make valid assessments as it lacked a valid board of directors since there had not been an election with a quorum for at least 2 years.
At issue was one clause in the HOA’s Bylaws and Washington’s statutes on HOA’s and nonprofit corporation. The key Bylaw provision stated
All officers shall hold office for a terms [sic] of one (1) year from the date of electio[n], or until the respective successor of each officer is elected.
The second part of clause “or until the respective successor of each officer is elected” was the key to the case and follows the default provision in Washington’s statutes governing nonprofits– absent resignation, a director stays in office until their successor is appointed. This took care of the challenge to directors staying in office year after year.
The next challenge raised by Pattison was to the Board’s practice of filling vacancies by appointment, which was quickly disposed of by the court noting that both the statutes on HOA’s and the statutes governing nonprofits give boards the authority to fill vacancies.
Thus, if a board member’s term ran for one year or until a successor was appointed, if a quorum couldn’t be obtained, the term would run indefinitely and the board had the right to fill the indefinite term by appointment.
This blog post is offered for general information and educational purposes only. It is not offered as legal advice and does not constitute legal advice or opinion. Although I intend to keep this information current, I do not promise or guarantee that the information is correct, complete, or up-to date. You should not act or reply upon the information in this post without seeking the advice of an attorney.