Ask the Attorney by
This column is comprised of questions that have been posed to me by homeowners, property managers and related professionals regarding legal issues that they have encountered with respect to their associations. Discussion of these questions, as well as prior questions, can be found on the CAI-MN LinkedIn page: www. linkedin.com/groups?gid=1769135
Can we control how long a board member can remain on the Board?
I have had many questions recently regarding directors. I have combined these questions to create this month’s article. You may recall from the January/February issue of this magazine1, that there is a distinction between directors and officers. This article will focus on directors, who are generally elected by the membership of the association.
Yes. Associations can impose term limits for director positions. This can be done as a strict limit (no more than 3 terms); or require a break of a number of years between terms. However, in my experience, term limits are unnecessary, and in smaller associations can be problematic. If the association members believe a director has done a good job, and the director wants to serve again, he/she can be re-elected. If association members don’t like the job the director has done, the members should elect a different representative. By imposing term limits, an association could be banning a quality leader from volunteering their time. In a smaller association, you might run out of people who are willing to accept the position!
Are we able to limit who can be on our Board?
I want to resign from the Board; how do I do that?
Yes. Associations are able to establish eligibility requirements for prospective board directors. The eligibility requirements are usually stated in your association bylaws or articles of incorporation, and can be amended to meet almost any standard desired, provided they are not discriminatory. Some of the most common requirements are: Board members must be owners of a unit in the association; board members must reside in the association (allows for non-owner family members or even tenants to serve); and the board as a whole must be comprised of a majority of owners. Provided that a requirement is not discriminatory, the bylaws can be amended, often by a majority vote at a duly called meeting, to include such restrictions. For example, an association could require that an owner live in the association for one year prior to being eligible for election to the board. This would provide the members of the association more time to know the owner and determine if they are suited for the position.
Pursuant to the Minnesota Nonprofit Corporation Act, a director may resign at any time by giving written notice to the association. The resignation is effective regardless of whether is is accepted by the association. It becomes effective immediately upon being given, unless the director states that it is to take effect at a later date. See Minn. Stat. §317A.221(a). Because it is effective when given, it is not possible to rescind such a resignation. However, a resignation that is given with an effective date specified in the future can be rescinded prior to the effective date. So if you are not 100% sure you are going to resign for good, be sure to make any resignation effective far enough into the future to provide time for reconsideration.
1 Previous issues can be read on the CAI-MN website at www.cai-mn.com
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Minnesota Communit y Living
We have a board member who resigned, now what do we do? The Nonprofit Corporation Act provides that unless the governing documents state differently, a vacant position can be filled either
Nigel H. Mendez, Esq., Carlson & Associates, Ltd.
by a vote of the members, or by a vote of the remaining board members. In practice, it is usually the remaining board members who will seek a representative to fill the vacated position. A majority vote of the remaining board members, even if the remaining members do not make up a quorum, is needed to elect a new board member. See Minn. Stat. §317A.227(a)(2). There is no prohibition on electing the board member who resigned, so if a board member resigned as detailed above, but had second thoughts, the remaining board members could re-elect that individual to the board. How long does a board-elected board member serve? Association bylaws often state that if the board fills a vacancy, that new board member will serve either the remainder of the term that was vacated, or until the next annual meeting of the members. If your documents are silent on this issue, Minn Stat. §317A.207, Subd. 1(d) provides that the new director will serve the remainder of the unexpired term. To have a question answered in a future article, please email it to me at nmendez@carlsonassoc. com with the subject line “Ask the Attorney.” While I can’t promise that all questions will be answered, I will do my best to include questions that have a broad appeal. Questions will also be answered by other attorneys practicing in this area of law. The answers are intended to give the reader a good understanding of the issue raised by the question but are not a substitute for acquiring an opinion from your legal counsel.