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What to Do With a Runaway Board
Most associations get through the day-to-day operations with a dedicated board and a professional property manager, working in tandem to keep the property running. However, sometimes owners find themselves in a situation where the leadership is a dictatorship that is anything but benevolent.
In those instances, owners are faced with having arbitrary and sometimes extra-legal actions imposed on them that may suppress basic freedoms or adversely impact property values. When this happens the owners must begin to band together and take action.
An association is the purest form of democracy. This particular unit of government, at the closest level, has the most impact on an individual’s day-to-day living and on basic human rights. Owners must stay on top of board business so that when an important decision is made, particularly when it involves spending large sums of money, the board’s action does not come as a total shock.
I have seen board’s adopt a budget without adequate notice or even the convening of a meeting; adopt special assessments contrary to restrictions in documents, skip elections entirely, meddle in peoples’ day to day lives beyond all reason or just bully anyone who attempts to question board operations.
Likewise, for board’s themselves, I have seen board’s direct enormous amounts of energy in dealing with a single maverick board member or a dissident faction, or a rude owner who tries to monopolize meetings with their petty grievances, and instead of being able to deal with the business at hand, they are spending all of their time and energy addressing the outlaw(s).
When it is the board that appears to be acting outside the scope of its authority, there are certain steps that can be taken.
First, a special meeting of members should be convened. Under the Illinois Condominium Property Act [765 ILCS 605/18(b)(5)], a special meeting of members can be convened by the president, a majority of the directors or by a petition signed by 20% of the membership requesting a special meeting.
The agenda for this meeting should be "board accountability." This should not be set up in an adversarial atmosphere. Rather, a list of specific questions should be submitted in advance to the director or directors in order that they can prepare a response. This can open up a productive dialogue and the board should be able to explain its actions. Personal attacks should be avoided at all cost. Stick to the facts. Often misunderstandings can be cleared up with a two-way dialogue. If necessary, invite the association attorney to act as a moderator for the format. This is far more productive than the next remedy, which is a last resort; removal of some or all of the directors.
The Illinois Condominium Property Act does not address removal of board members. An association must first look to its own by-laws and if they are silent, then the Illinois General Not For Profit Corporation Act (except for cooperatives set up as regular corporations or trusts).
Most by-laws provide that the board can be removed by some set percentage of members (often 2/3rds), either of the entire community or of those attending a removal meeting. First, the requisite procedure for calling the meeting must be followed.
Second, a special meeting of members must be convened by sending proper notice (condos -- not less than 10 days nor more than 30 days -- Section 18(b)(6) of the Illinois Condominium Property Act; all others, follow their by-laws or if the by-laws are silent, the Illinois General Not For Profit Corporation Act, which is not less than 5 nor more than 60 days -- Section 107.15). The notice must state the specific purpose of the meeting.
Although proxies do not have to be prepared for a removal meeting, they often are. Again, the attorney should be consulted to review and screen any legal documents, such as petitions, notices, ballots for removal, etc., to make sure that they are valid.
A "reverse" election meeting is then held. It is not a court of law and it should not be an accusation session. The business is limited to voting on removal of directors and those that have done their homework should know why they are voting the way they are.
Once the recall election or removal vote is held and the removal is successful, a special election should be then convened immediately thereafter to elect a new board (there should have been notice of this action as well). For a single or limited number of removals, the remaining directors of a condominium board may select a replacement by a 2/3rds majority vote (Section 18(a)(13) of the Illinois Condominium Property Act). Homeowner associations must follow the precepts of their by-laws.
Note that the Illinois General Not For Profit Corporation Act does require that if an association has cumulative voting, and less than the whole board is to be removed, no director may be removed if the votes cast against their removal would be sufficient to elect them if voted cumulatively at an election of the entire board [Section 108.35(c)(3)].
These types of meetings are extremely divisive and tear at the fabric of an association. However, sometimes one or more directors can single handedly destroy the effects of years of good work with a series of senseless acts.
Maximum effort should be made to talk out the problems. However, when all else fails, the removal procedure is available.