As any person who has served on their association’s board of directors can tell you, it is a thankless job. While you are required to undertake the business of a not-for-profit corporation and assume fiduciary responsibilities to the other unit owners, you receive no form of compensation or special treatment. Furthermore, what you do get is panoply of responsibilities, phone calls and headaches. Unfortunately, most of the education is on the job training. What happens when the members of the association, beyond the typical complaints and disagreements, decides to “remove” you from the board of directors. Some would say, “If you want the job it’s yours.” However, others might not so readily turn the business of the association over to those with opposing viewpoints.
Section 18(a) (4) of the Illinois Condominium Property Act requires that the bylaws of an association must provide for a method of removal from office of the members of the board of managers. (765 ILCS 605/18(a) (4)). Each association should examine their respective bylaws to determine the “method” applicable to their board. Additional concerns associated with removal are notice provisions, voting and proxy requirements, quorum, and reelection procedures.
Typically, the board does not “call” a meeting, on its own initiative, for the removal of the Board. The first hurdle in removing a board or board member is scheduling and calling the meeting. Section 18(b) (5) provides that “special meetings of the members (usually where a board member would be removed) can be called by the president, board of managers or by 20% of unit owners.” The unit owners seeking the removal of a board member, or the entire board would then petition the president of the board, with signatures representing 20% of the ownership, to call a special meeting for the purposes of removal. The “Notice” of the special meeting must be mailed or delivered to all the unit owners no more than 30 and at least 10 days prior to the meeting. (Sec. 18 (b) (6)).
The second hurdle to overcome is obtaining sufficient attendance at the meeting, either by person or proxy, to constitute a quorum. If a quorum is not present, the meeting will not and cannot proceed. When a quorum is established, the bylaws should be followed to vote on the removal. An obvious method of gaining sufficient votes is the use of proxies. As any unit owner who regularly attends meetings is aware, most of your neighbors do not attend in person. Proxies can be used to secure the necessary votes either in favor or against the removal. It is important that the proxies are properly prepared to be considered valid. The proxy must name a proxy holder who will be present at the meeting. Additionally, the proxy should acknowledge whether the proxy holder is instructed to vote a certain way or whether the proxy holder can use the vote however he or she sees fit. Further, the proxies should be dated and contain the unit owner’s name and address for proper balloting.
A final concern is after the vote is taken; there must be a method to replace the removed members on the board. Section 18(a) (13) of the Act requires that bylaws provide for a method of filling vacancies on the board which must include authority for remaining board members to fill the vacant positions by two-thirds vote. The member elected to fill the vacant position will hold that position until the next annual meeting unless the unit owners again petition the board to call a special meeting to fill the vacancy for the remaining term. This petition must be delivered to the board within 30 days of the vacancy and must be signed by at least 20% of the ownership. The meeting to fill the vacancy then must be called within 30 days.
An interesting concern is where the entire board is removed. In such a situation there are no remaining board members to fill the vacancy. Therefore, members must be ready to nominate other members to serve on the board. Members also should be prepared with the necessary proxies to cast votes for new board members. The bylaws should be carefully reviewed to examine both the nominating procedures and voting procedures for strict compliance.
Overall, the process of removing members from the board of managers is sophisticated and technical. Failure to follow any of the steps can result in the invalidity of either the removal or the subsequent election. A thorough understanding of the bylaws and the procedures required is imperative in protecting both the validity of the removal and preserving the rights of all the members of the Association.
This article is being provided for informational purposes only. This article does not constitute legal advice on the part of Costello Sury & Rooney. or any of its attorneys. No association, board member or any other individual or entity should rely on this article as a basis for any action or actions. If you would like legal advice regarding any of the topics discussed in this article and/or recommended procedures for your association going forward, please contact our office.