Generally speaking, it can be quite difficult to get volunteers to serve on the board of directors of Home Owners’ Associations (HOA’s) registered as non-profit companies. Usually members are delighted when others commit to taking on the task. Unfortunately at times this delight can fade as it becomes more and more apparent that a particular director may not be suited for this very important role and it would be in the best interest of the HOA to relieve the director from their duties.

When, in the opinion of members or fellow directors, a particular director has:

• become ineligible to serve as director;
• should be disqualified from doing so;
• is permanently incapacitated;
• has neglected the performance of their functions as director; and/or
• been derelict in the performance of these functions,

the removal of such director can be authorised in one of two ways:

1. either by way of an ordinary resolution passed by the members of the HOA; or
2. by a resolution passed by the board of directors.

Regardless of which of these paths are chosen, certain crucial parts of the process remain the same. For example:

• The particular director must be given advance notice of the meeting called for the purpose of obtaining the necessary authority to remove them from the board;
• This notice must be drafted very carefully and include the wording of the proposed resolution; and
• At the meeting (and before the resolution is put to a vote) the director in question must be given the opportunity to make a presentation in their defense – either themselves or by way of a representative doing so on their behalf.

While one may be tempted to act in haste when wanting to remove a particular director as a matter of urgency, it is clear from the above that one needs to take time to ensure that i’s are dotted and t’s crossed so as not to inadvertently contravene the Companies Act, which regulates this process. It is therefore advisable to consult with a suitably qualified attorney first and perhaps ask them to draft the relevant notice on your behalf.

Article reference: Paddocks Press: Volume 16, Issue 12.

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