Who May be Removed
Directors Subject to Recall. The membership can remove individual directors from the board, or remove the entire board at a special meeting of the membership called for that purpose.
Those NOT Subject to Recall. The following persons are not subject to recall by the membership:
- Designated Directors. Designated directors (appointed by the declarant) cannot be removed without the approval of the designator. (Corp. Code § 7222(f).) A designated director is not appointed by the board to fill an empty seat. A "designated director" is one designated in the association's articles of incorporation or bylaws. (Corp. Code § 5220(d).) Such directors serve until their term expires as provided in the articles or bylaws, or they resign, die, or become incompetent.
- Court-appointed directors. Members cannot remove a court-appointed provisional director or receiver. Any action to remove a provisional director or receiver must be done with court approval. (Corp. Code § 5220(e).)
- Officers. The membership cannot recall officers, such as the president, secretary, or treasurer, since the board elects officers, not the membership. Officers serve at the pleasure of the board and may be removed at will by the board.
- Managers. The membership cannot remove or "fire" a manager; only the board can. Nor can they file a petition to remove a manager.
Giving Notice to the Membership
Petition to Recall the Board. If presented with a petition to recall one or more directors, the board has 20 days from receipt of the petition to set the date and give notice of the meeting date selected by the board.
If the corporation is a common interest development, as defined in Section 4100 of the Civil Code, the corporation shall cause notice to be given to the members entitled to vote that a meeting will be held at a time fixed by the board not less than 35 nor more than 150 days after receipt of the request. If the notice is not given within 20 days after receipt of the request, the persons entitled to call the meeting may give the notice or the superior court of the proper county shall summarily order the giving of the notice, after notice to the corporation giving it an opportunity to be heard. The court may issue such orders as may be appropriate, including, without limitation, orders designating the time and place of the meeting, the record date for determination of members entitled to vote, and the form of notice.. (Corp. Code § 7511(c).)
Board-Initiated Recall. Boards of directors can initiate a recall of a fellow director. They can set a date for a special meeting on their own authority and without the need for a petition from the membership. There are no deadlines for setting a date as with a petition. The board can pick a convenient election date in keeping with a director election timeline, whether by written ballot or electronic.
Setting a Meeting Date Without Cumulative Voting
Without cumulative voting, the recall of existing directors and the election of replacement directors takes place on one ballot. The election timeline is determined by the method of voting, whether electronic or written. If written ballots are distributed, the special meeting date is set 120 days in the future, and written ballot guidelines are followed regarding the hiring of an inspector of elections, soliciting nominations for new directors in the event the recall is successful, preparing candidate and voter lists, etc. If electronic balloting is used, the meeting date is set 150 days in the future and electronic balloting guidelines are followed.
Setting a Meeting Date With Cumulative Voting
Recalling the Entire Board or a Single Director. If the entire board is being recalled, or just a single director, the number of seats that need to be filled is known in advance. All seats will be open if the entire board is recalled or only one seat if a single director is recalled. This is important for those associations that still use cumulative voting. Under these scenarios, the recall of existing directors and election of replacement directors can take place on one ballot. The inspector of elections first tallies the recall votes. If the recall is not successful, the election is over. If the recall is successful, the inspector then tallies the votes for replacement director(s) to determine who is elected to the vacated seat(s).
Recalling More than One but Less than All Directors. This is more complicated. For example, in a five-member board where three directors are to be recalled, the number of open positions after a successful recall cannot be known in advance. Two may be recalled, and one is not (or two, or all, or none are recalled). For that reason, you cannot know how many positions to put on the ballot for the replacement director election for purposes of cumulative voting. Here are three options:
Sequential Elections. Complete the entire recall election first. If the recall fails, a second election is unnecessary. If one or more directors are recalled, a replacement election is needed. At this point, the correct number of directors is known beforehand. This option ensures complete statutory compliance, compatibility with cumulative voting, and voter certainty at the replacement election. However, if a director replacement election is needed, (a) the time to complete the process is doubled, and (b) if the recall leaves a sub-quorum board, recalled directors should continue to serve until replaced to allow continued association operations. Appointment of recalled directors is prohibited by Corporations Code § 7224(a).
Single Ballot Election. This provides the fastest resolution with no hold-over of recalled directors. However, members will not know how many positions must be filled until after casting their ballot. This knowledge can be important for members (a) when deciding whether to run in response to the call for candidates, (b) when deciding for whom to vote on the ballot, and (c) deciding whether to campaign or not since it can't be known whether the election will be contested until after the ballots are cast. An option for elections without cumulative voting is for the ballot to reflect the maximum number of possible positions to be filled if everyone is recalled and allow a single vote for each position. Then count all votes for all candidates, but award only as many positions as were recalled. Single-ballot elections cannot work with cumulative voting since the number of votes a member is entitled to cast must be “equal to the number of directors to be elected,” the number of which would be unknown at the time the ballots are delivered. (Corporations Code § 7615.)
Parallel Elections. This hybrid option can be completed in the same time as single-ballot elections but also accommodates cumulative voting. Ballots can be mailed to the membership for the recall and the election completed in 65-75 days. The parallel director replacement election (with separate ballots) can be conducted simultaneously following a longer 110 to 120-day timeline. As such, the recall can be completed before the separate election ballots for director replacements are mailed to the membership. If the fast-track recall fails, the second set of ballots for the director election need not be sent. If the recall succeeds, the ballots can accurately state the number of open positions, thereby eliminating voter uncertainty and permitting cumulative voting.
Electing Replacement Directors
Unless otherwise stated in the association's articles of incorporation or bylaws, the board does not have the authority to replace a director who has been removed by the membership. (Corp. Code § 7224(a).) In the event a recall is successful, the election of replacement directors is combined with the recall vote. The Corporations Code does not provide for the permanent removal of directors. So long as the person meets the qualifications of a director, he/she can be elected to the board even if recalled by the membership (provided they nominate themselves during the call for nomninees).
Tallying Votes. The inspector of elections first tallies the recall votes. If the recall is not successful, the election is over. If the recall is successful, the inspector then tallies the votes for replacement director(s) to determine who is elected to the vacated seat(s).
New Directors Term of Office. If the recall is successful and new directors are elected, the term in office for new directors will be the same as the directors they replace. (Corp. Code § 7220(b).) If a board has staggered terms and is recalled, the election of replacement directors requires a determination of which directors get the longest terms. That is determined by the vote count. Those directors receiving the highest number of votes are elected to the open seats with the longest terms. EXAMPLE: Assuming a five-member board with staggered terms is successfully recalled, with three directors having one-year remaining terms and two having one-month remaining terms, the three candidates receiving the highest number of votes fill the seats with one-year terms. The next two elected candidates fill the one-month terms. That means the two newly elected directors with one-month terms must stand for reelection in thirty days.
Recall Procedures in Election Rules
As part of the Election Rules required by statute, associations should include a section on recall procedures. They should include:
Abusive Recall Petitions. The membership can submit a petition to remove the entire board or individual directors. Because only 5% of the membership is needed to trigger a recall, the low percentage can lead to abusive recall petitions, where persons in some associations launch recall after recall to torment boards. They hover over each ballot count with another recall petition in hand in case the board survives the recall. Abusive petitioners will serve three or four recalls in a row to wear down directors and pressure them to quit. Associations can adopt election rules to deal with serial recalls. Because neither the Davis-Stirling Act nor the Corporations Code address excessive recalls, we can turn to California's Elections Code for guidance. California puts the following restrictions on its recall elections: "Recalls may not be started against an officer of a city, county, special district, school district, community college district, or county board of education if: (a) the officer has not held office during the current term for more than 90 days; (b) a recall election has been determined in the officer's favor within the last six months; (c) the officer's term ends within six months or less." (Elections Code § 11007.) Accordingly, it would be reasonable for associations to adopt similar restrictions. Associations should seek legal counsel to amend their election rules and/or bylaws to add a provision addressing serial recall elections.
Miscellaneous Issues
Continued Operations. The board must continue normal operations even if it is the subject of a recall petition. Bills must be paid, common area maintenance and repairs made, assessments collected, etc. Also, being the target of a recall does not make the board "interested" directors who cannot decide on the recall. They are allowed to make decisions regarding setting a meeting date, hiring an inspector of elections, etc.
Campaigning Against the Recall. Campaigning is allowed by both sides. Owners may campaign to remove directors from office, and directors may campaign against the recall. However, neither side is allowed to use association funding for their campaigns. (Civ. Code § 5135.) Any access to association media must be granted equally.
False Statements. If the petitioners make false statements, the board may have a duty to make corrections and advise members of the facts.
Legal Counsel. Board members are volunteers and rarely know how to properly handle a recall petition election. As a result, it is common for them to call legal counsel to find out what to do. Following is a sampling of questions boards often must address:
- If a husband and wife both sign the petition, does it count as one signature or two?
- Can/should the board verify the signatures? If so, how?
- Is the petition confidential, or should it be published?
- How much time do we have to call a recall meeting?
- How are nominations handled?
- Do recalled directors have the right to run for the board?
Recall Expenses. The association bears the cost of the recall election regardless of the outcome.
Recommendation: Associations should seek legal counsel when faced with a petition to recall one or more directors. Associations should amend their governing documents to (i) eliminate cumulative voting, (ii) limit abusive recall petitions, (iii) eliminate proxies, and (iv) eliminate quorum requirements for the election of directors.
ASSISTANCE: Associations needing legal assistance can contact us. To stay current with community association issues, subscribe to the Davis-Stirling Newsletter.