When you have a strong desire to help those around you and a roll-up-your-sleeves-and-get-to-work attitude, you probably find yourself volunteering your time quite often. Even with substantial previous experience in giving back to the community, many board members find working with an HOA to be very different from past volunteering opportunities. This difference is felt largely because working with an HOA means strictly adhering to many unfamiliar laws and regulations–which are the challenges we are dedicated to unpacking!
That’s why we want to take a step back and look into the nitty-gritty of your position as a board member. Specifically, we want to discuss board member terms. The election process and term limits can be complicated, so we’re here to aid in your understanding of the complex, yet vital, world of board membership. What are term limits? How do you know how long you can serve? Is re-election possible? What happens when your term expires, and no one is elected to replace you? Also, should term limits even exist? What are the pros and cons?
Join us below in dissecting the ins and outs and ups and downs of board member term limits in HOAs.
What are board member terms?
Board members, when elected, serve for a specific time period, called a term. It’s a similar process to elected officials in politics. The board member’s term either lasts for a specific length of time or until a certain event occurs, such as an annual meeting. Every HOA is unique, so your term limits are for your board to decide and adopt in your governing documents. Perhaps your HOA has limits already established and you’re looking to amend those limits, or maybe your HOA doesn’t have any limits specified and you’re wanting to establish limits. Either way, it’s important to figure out what’s right for your association. Discuss with your management company and attorney, if necessary, to see what they recommend.
How do you know how long you can serve?
Your association’s governing documents will tell you if you are serving for a specific length of time (like three years) or if you’re supposed to serve until the next annual meeting of the members. While it’s usually the bylaws that govern the board, sometimes the association’s articles of incorporation will establish the length of a board member’s term.
You are probably serving an association whose board members have staggered terms, which means that most of the association’s board members are either serving different term lengths or are being elected in different years. For example, one board member may for serve two years while another may serve for three years, or some member positions may be elected in even years while other positions are elected in odd years.
Occasionally, an association’s governing documents will not contain any information regarding term length for board members. In Arizona, if your association’s governing documents don’t tell you how long to serve, you can only legally serve for one year. In Texas, the first board will serve until the first annual election, and all subsequent board members will serve until the next annual election. In Florida, board members are only allowed to serve for eight consecutive years. If your documents don’t specify term limits, it’s important to check the laws in your state to see if there are mandatory standard term requirements.
Is re-election possible?
Can a board member be re-elected multiple times? Yes, as long as the articles of incorporation or bylaws do not prohibit or restrict the number of successive terms a board member can serve. If your governing documents allow for multiple terms, board members can run and be elected to the board for as long as they want. Term limits can be decided for the length of the term as well as how many terms a board member can serve.
What happens when your term expires, and there’s no replacement?
In Arizona, when a board member’s term expires and no one replaces them, usually due to an inability to meet quorum at an annual meeting, they still retain the authority to serve on the board. A board member will retain office until one of the following is met:
- A successor is elected, designated, or appointed and qualifies,
- The director resigns or is removed, or
- There is a decrease in the number of directors
Texas’s rules about what happens when a term expires are different than Arizona’s—a board member does not retain the authority to vote on board matters and act on behalf of the HOA. There is one important caveat: the board member whose term has expired retains authority if the governing documents say that the current board member can continue to serve until the next duly elected board member takes office.
This means that, in Texas, if your association did not reach quorum at your annual meeting and the board member election did not take place, your board needs to attempt to reconvene the annual meeting by following your governing document’s provisions.
If attempts to reconvene are unsuccessful, the board should amend the bylaws to reduce the quorum requirement. However, keep in mind that it’s possible that any amendment to the bylaws regarding quorum could conflict with the association’s CC&Rs. This would invalidate any changes made to the bylaws, so be sure to check the CC&Rs first!
Another possible option for your board is to call for a special meeting of the members in order to elect new board members. There are four groups of people who can call a special meeting:
- The HOA’s president (if the president’s term has not expired)
- A majority of the board (as long as there are enough board members whose terms have not expired, they can constitute a quorum)
- One-tenth of the HOA members entitled to vote
- Such other officers or persons provided for in the governing documents
Your association’s last option is to have the court appoint a receiver to act on behalf of the HOA until a new board is duly elected by the members.
Unfortunately, board members sometimes choose to continue in their role despite the fact that their terms have expired. If you find your board in this situation, take steps to elect a new board as quickly as possible. Once a new board is in place, the members should vote to ratify the actions taken by the previous board. This step should protect the HOA from any legal challenges. Of course, your board should reach out to your association’s attorney if you have any questions or concerns regarding the validity of your current board’s rulings.
Should term limits exist?
There is some debate about if HOAs should have term limits as there are pros and cons for them. If state law and your governing documents are vague about term limits, you may find yourself wondering if establishing term limits is the best course of action for your HOA. Determining board member term limits is an important decision for any HOA and it remains vital to take the pros and cons into consideration for your association.
What are the pros and cons of term limits?
Term limits can offer many positive effects, such as encouraging productivity for board members, providing incentive for incoming members, fostering diverse perspectives on the board, changing any unfavorable dynamics, establishing a set order and routine for board membership, and ensuring a democratic approach to serving on the board.
- Encourage Productivity: Term limits can boost productivity and promote time management by encouraging board members to use the most of their time on the board. Having strict term deadlines creates a sense of urgency for board members to complete their goals before their time is up. With a term limit, there is less room for procrastination.
- Provide Incentive: Term limits may appeal to volunteers interested in running because they know there will be an open position at a certain point in the near future. Board members usually have their own families and careers to worry about in addition to HOA business, so knowing their time on the board isn’t indefinite could incentivize potential candidates to run for a single term or two. Term limits can appeal to volunteers with busy lives who can only serve a small amount of time.
- Foster Diversity: Term limits allow the board to diversify its perspectives and find fresh ideas. If term limits never expired and the same board members served year after year, nothing in the association would change. A constant stream of new perspectives at set intervals fosters diversity in the approaches to projects, challenges, and daily business. Term limits create an environment susceptible to change and adaptability.
- Alter Dynamics: Term limits make sure that tension, if any, between board members isn’t permanent. Sometimes personalities don’t always mesh, and rotating terms allow for any potential unfavorable dynamics to change. A new group of board members might work better together than the previous one.
- Establish Order and Routine: Term limits create a sense of order and routine by establishing the expectation that positions will be up for election on a set schedule. By having a standard of rotation, everyone on the board, and anyone wanting to run for the board, is aware of the timeline for the positions.
- Ensure Democracy: Term limits cultivate a space of democracy by preventing one voice from dominating the board. By having different board members rotate in and out, different voices can contribute to the association and ensure that everyone who wants to serve on the board has a chance, if elected, to do so.
However, term limits can also be a disruption for the HOA by increasing the overall adjustment and training time, losing valuable board members and their skills, making recruitment of new members more difficult, and dropping momentum of productivity.
- Increase Adjustment Time: Term limits might inhibit the association with longer adjustment periods for new board members. Time spent on training can take away from projects and other accomplishments the board may be working on before board member switch in and out. With tools like Boardline Academy and a code of conduct, the adjustment period can be made easier and incoming board members can assimilate better and ease into their new role.
- Lose Valuable Assets: Term limits can cause the board to lose valuable members and their skills and knowledge. Institutional memory is important to preserve in any organization, and term limits can weaken this if all the terms expire at the same time. With staggered terms, institutional memory can be preserved with the terms of veteran members overlapping new members coming in.
- Make Recruiting Difficult: Term limits could make recruiting new board members difficult, as the volunteer pool may diminish with every passing term. Lack of willing volunteers and participation could leave your board with unwanted vacancies, causing the remaining members on the board to take on more responsibilities.
- Drop Momentum: Term limits may drop the momentum of HOA business and create challenges in completing ongoing projects. Current board members might have to focus more on helping new board members adjust to their role rather than focus on bringing past ideas to fruition.
So, what should you do? Well, it’s up to your association. Taking into consideration the pros and cons along with state law and your governing documents, you have different options available to you.
One solution is to implement staggered terms. One board member position could have a limit of one year, another position could have a limit of two years, and another position could have a limit of three years. This rotation of positions provides overlap and consistency of board members while still allowing for new members to filter in. With staggered terms, there is minimal disruption in workflow because some veteran members can still serve on the board and the newer members still have adequate time to learn the ropes.
You could also adopt longer terms, allowing members to serve for six years rather than three. Alternately, you could place limits on terms for officer positions rather than just board positions in general. This way, veteran board members can preserve the institutional memory of the association and maintain momentum and productivity of association business. Experienced board members can continue to serve on the board as a director when their officer term is up.
We hope we have given you a solid guide to refer to when questions regarding your board’s term limits surface. Here at Boardline, we aim to provide you the knowledge and tools to tackle any challenges you face as a board member and serve your association to the best of your ability. Please check out our other blog posts for more board member tips and tricks!