A director's term in office is established in an association's bylaws. In unincorporated associations, they may be found in the CC&Rs.
Staggered Terms. Staggered terms are allowed under Corporations Code § 7220(a):
[The] bylaws may provide for staggering the terms of directors by dividing the total number of directors into groups of one or more directors. The terms of office of the several groups and the number of directors in each group need not be uniform.
Original bylaws from developers often set the term of office at one year, which requires all directors to stand for election every year. Most associations eventually amend this provision to establish two-year staggered terms to create stability and continuity on the board. Unless bylaws provide otherwise, staggered terms also apply to appointed directors.
Changing the Term of Office. No amendment of the articles or bylaws may extend the term of a director beyond that for which the director was elected, nor may any bylaw provision increasing the terms of directors be adopted without the approval of the members. (Corp. Code § 7220(a).)
Filling Vacant Seats. Unless the articles or bylaws provide otherwise, a director appointed to fill a vacant seat holds office until the expiration of the term of the seat for which he/she is appointed and until a successor has been elected. (Corp. Code § 7220(b).) If a person elected to a 2-year term on the board resigns three months into the term and a replacement director is appointed, the appointed director remains in office for the remainder of the 2-year term. (See "Appointment of Directors.") Most bylaws contain language similar to that found in the Corporations Code. Sometimes, however, bylaws will require appointed directors to stand for election at the next annual meeting. Following is an example of such language:
. . . a person so appointed shall be a director until a successor is elected at the next annual meeting of the association.
Annual Meeting No Quorum. See "No Quorum" for the impact on director terms when an association cannot make quorum at its annual meetings.
Term Limits. In 2019, a bill sponsored by Marjorie Murray's Center for California Homeowner Association Law (CCHAL) voided term limits for directors in every association in California. It created such an outcry of protests that the right to adopt term limits was restored by the Legislature in 2022. (Civ. Code § 5103(d)(2).) A term limit is a restriction on the number of years or terms a person can serve on the board of directors. Such limits are normally found in an association's bylaws. If properly drafted, term limits can be positive.
No Term Limits. If there are no term limits in an association's governing documents, directors can be elected and re-elected indefinitely.
Strict Limits. Strict term limits that allow owners to serve one or two terms and then forever bar them from the board are unworkable. It is much too difficult to recruit members to serve on the board. Also, what happens when everyone in the association has served on the board? Accordingly, strict limits should NOT be adopted.
Step Down 1 Year. A more common term limit allows directors to serve two terms and then requires them to step down for a year. This allows other owners the opportunity to serve on the board without permanently barring seasoned directors from serving at a later date. Even this kind of limitation can be problematic if no other owners are willing to serve on the board. By statute, "An association shall disqualify a person from a nomination as a candidate for not being a member of the association at the time of the nomination. An association shall disqualify a nominee if that person has served the maximum number of terms or sequential terms allowed by the association." (Civ. Code § 5105(b).)
Flexible Limits. To avoid the potential problem of a mandatory requirement that directors step off the board for one year, term limitations should only take effect if people are willing to serve on the board. To create this flexibility, bylaws should be amended.
Bylaw Amendment. Term limits can be added by passing a bylaw amendment and then revising the election rules. It is unclear, but it may be possible to impose term limits by amending the election rules without the need to amend the bylaws.
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