BOARD MEMBER REMOVAL

Does your Association board and/or owners know the process under Arizona law for removal of a board member/director at large from office?  In Arizona, the Arizona Condominium Act, ARS Section 33-1243(H), and the Arizona Planned Communities Act, ARS Section 33-1813(A), provide for very specific protocols for the removal of Board Members in Condominiums and Planned Communities, respectively. Please also note that both statutes provide for removal, with or without cause, so long as the required protocol is met. The general protocol requires the following steps:

  • The Board must receive a petition that calls for removal of a member of the board of directors and that is signed by the number of persons who are eligible to vote in the association at the time the person signs the petition equal to (1) in an association of less than 1,000 members, at least twenty-five percent of the votes in the association or by the number of persons who are eligible to vote in the association at the time the person signs the petition equal to at least one hundred votes in the association, whichever is less; (2) in an association of more than 1,000 members, at least ten percent of the votes in the association or by the number of persons who are eligible to vote in the association at the time the person signs the petition equal to at least one thousand votes in the association, whichever is less;
  • Upon receipt of the petition, the Board must notice and hold a special meeting to vote on removal within 30 days; and
  • So long as a quorum is present at the special meeting, the members of the association who are eligible to vote at the time of the meeting may remove any member of the board of directors, by a majority vote of those voting on the matter at the meeting.

Currently, there is no Arizona case law that specifically addresses removal of a board member from office.  A recent case in Pennsylvania (A Pocono Country Place Property Owners Association, Inc. v. Kowalski, No. 904 C.D. 2017 (Pa. Commw. Ct. May 7, 2018)) sheds some light on whether a court can unilaterally remove a director from office for bad behavior despite the fact that state law addressed a procedure for removal of the director and that procedure was not followed.  In this case, 8 board members filed suit against 1 board member, seeking his removal from the board and banning him from serving in the future, based on his behavior towards the other board members, which allegedly included a number of insulting, hostile and potentially discriminatory emails.  While the Court found the Defendant’s conduct to be “deplorable”, it ruled that such conduct did not constitute grounds for court intervention pursuant to the Pennsylvania Nonprofit Corporation law.

From the facts presented in the case, the behavior of the 1 board member fell below the expectations of a board member.  However, a court couldn’t intervene in this matter and remove the director from office because the state’s statutory removal provisions had not been adhered to.  As such, an important takeaway from this case for Arizona associations is that the procedures for removal of a board member outlined in ARS Section 33-1243(H) and ARS Section 33-1813(A) must be strictly adhered to.

If your community is dealing with an existing or potential removal issue, please feel free to contact my office for assistance.

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