M.D. from Ozaukee County, Wisconsin writes:
Dear Mister Condo,
44-unit condo community in suburb of Milwaukee. Entire Board is resigning in a huff, feeling victimized and threatened. A special meeting is being called in 2 weeks, to vote either on transition to a property management co, or to elect a brand-new board (with no carryover members). The Board is promoting a specific property management co; not offering 3 companies to consider. No information on this one specific property management co is being provided owners in advance of the vote, including cost of HOAs under this property management co. A presentation of some kind will be given at this special meeting by the President of this proposed property management company, and a vote will be taken immediately thereafter. No time to digest or consider what will be presented to owners. But if a property management co is approved (it requires 67%, per the by-laws), that does not mean a Board is no longer required, correct? Because who then would hire and fire any future property management co, for example? The current Board is asserting an either/or situation: approve the property management company we are presenting to you, or choose a brand-new board. Again, no current Board members are continuing. They refuse. They state they have resigned, but have not stated “effective immediately,” or “effective on such-and-such a date.” Is any of this even legal? I’ll look forward to your thoughts.
Mister Condo replies:
M.D., without knowing the underlying circumstances that has led to your Board wishing to resign, I would say that there must be one or more cantankerous association members that have removed the joy of volunteering to serve on the Board. Perhaps your community has underlying problems (deferred maintenance due to lack of a properly funded Reserve Fund comes to mind). Either way, I cannot offer you legal advice here. From a practical standpoint, you cannot force volunteers to serve. If they wish to resign, that is their option. The governing documents should be followed and that certainly requires a new Board to be elected if this one resigns. The rules should also be followed for hiring a management company. If that requires a 67% approval from owners, then that is how it should happen. Be sure to point that out to the management company representative before they make their presentation. Taking on a new association is a cost and labor-intensive proposition for a management company. It would be a shame for them to put all that time and effort into your association only to find out they were not hired properly. Also, with no Board in place, there would be no one to sign the management company’s agreement. I hope the situation gets better for your association. All the best!