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DIRECTOR REMOVAL BY THE BOARD

Removal by Fellow Directors. Only under limited circumstances can directors, whether appointed or elected, be removed by fellow directors. A director’s seat can be declared vacant under the following circumstances.

  1. Unqualified Director. The board, by a majority vote of the directors, may declare vacant the office of any director who ceases to meet qualifications that were in effect at the beginning of that director's term of office. (Corp. Code §7221(b).)
    1. A Non-Member. A director who is discovered to not be a member, who has ceased to be a member, or who is not or no longer lawfully appointed to represent a legal entity owning a separate interest must be removed as unqualified to serve. (Civ. Code §5105(b).)
    2. Delinquent Director. A director's seat can be declared vacant if the director becomes delinquent in the payment of regular and special assessments, and does not enter into a payment plan to bring assessments current. (Civ. Code §5105(c)(1).)
    3. Co-Owner. A director can be removed if, after elected, the director becomes co-owner of property in the development with another person on the board. (Civ. Code §5105(c)(2).) The two directors can decide between themselves which one will remain on the board. If they cannot decide, the board can select one.
    4. Owner Less Than 1 Year. A director who has been a member of the association for less than one year may be disqualified and removed. (Civ. Code §5105(c)(3).)
    5. Criminal Conviction. A criminal conviction that would prevent the association from purchasing or would terminate the association’s fidelity bond coverage. (Civ. Code §5105(c)(4).)
  2. Missed Meetings. The Corporations Code allows for removal of a director for missing meetings if provided for in the bylaws. (Corp. Code §7221(a).) A common bylaw provision is to allow the board to remove a director who misses three consecutive regular meetings or a total of four regular meetings in a 12-month period.
  3. Unsound Mind. The board may declare vacant the seat of a director who has been declared of unsound mind by a final order of court. (Corp. Code §7221(a).)

Due Process. The vote to vacate a seat is not a disciplinary action--the board is not fining a director for violating a rule. Rather, it is declaring the seat vacant because the person is no longer qualified to be a director. Even so, the board should give notice to the director and hold a hearing in executive session to give the director an opportunity to cure the disqualification. If the director cannot or refuses to cure the disqualifying issue, the board can vote to vacate the seat.

Replacement Director. Once a seat has been vacated, the board can appoint a replacement to fill the seat unless the bylaws state otherwise.

Removing An Appointed Director. Except for the circumstances described above, a board cannot remove a director it appointed to a vacant seat. An appointed director has the same powers and duties as other directors. An appointed director occupies a seat on the board the same as if he/she had been elected to the board. Accordingly, the removal of an appointed director follows the same process as used for removing an elected director

ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.

Adams Stirling PLC