2010

OUT WITH THE OLD (…WELL YOU KNOW THE REST) 

Unquestionably, service on the Board of Directors for common interest community is a thankless position. Verbal abuse, threats of physical violence, long unpaid hours and telephone calls regarding members often insignificant problems in the middle night are the primary benefits received for such efforts. Occasionally, disgruntled owners seek to vent their frustration or further their personal agendas by targeting one or more members of the Board of Directors for removal. Of course, there are bad board members who occasionally deserve to be removed (and in some cases, imprisoned!).

Nevada has established a specific statutory procedure for the removal of persons from Association Boards. Often, this procedure is inconsistent with those written requirements which are set forth in the Association’s governing documents. The statutory procedure however takes precedence and must be utilized (NRS 116.1206). In summary, this procedure is as follows:

1. Ten percent of the Membership must request the commencement of removal proceedings;
2. Secret ballots must be sent to the Membership with a prepaid return envelope;
3. Each unit’s owner must be provided with at least fifteen (15) days after the secret ballot is mailed to return the same to the Association;
4. At least thirty-five percent (35%) of the total number of voting members of the Association must cast and return ballots in favor of removal;
5. At least a majority of all votes cast must be in favor of removal; and
6. The ballots must be opened and counted at a meeting of the Association where a quorum need not be present.

Managers and Board members are often confused with regard to the application of the 35% and majority voting requirements. The following example should provide clarification regarding this concern:

Assuming an Association has 200 units, at least 35% (that is, 70) must be cast in favor of removal. If a total of 180 ballots are returned, at least a majority of those returned ballots (i.e., 91) must also vote in favor of removal. In this case, the removal effort would be unsuccessful.

Due to the complexity of the rules concerning the initiation of the removal process, providing the ballots to the Members and the formula for determining the outcome, I strongly recommend that legal counsel be involved in the process.

By Matthew L. Grode, Esq.

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