Question:
I am the president of a condo association. Our building does not allow short term rentals. A fellow board member asked if the board would allow them to do a three month summer rental, which we advised them that they can not. The following day they listed the unit with a realtor for a 3 month summer rental. After pressure from the board they removed the listing. The same board member owns a contracting company, recently a unit they were working on violated condo policy and was staging debris in the hallway. The majority of the board decided to fine the unit owner. Is there any legal perspective that these actions would warrant removal from the board?
Answer:
You need to review your by-laws to determine the method by which a manager may be removed from the board.
Typically, by-laws permit a board to remove a manager for “cause” by vote of a majority of the managers present at a meeting at which a quorum is present. Your by-laws may provide that the voting requirement to remove managers for cause requires a greater vote of the managers. These transgressions of your fellow board member, in which he disregards your declaration and rules and regulations, may constitute sufficient “cause” to remove him as a manager. Moreover, pursuant to the business judgment rule, I believe that a court would defer to your board’s decision that such conduct constitutes “cause” to permit for his removal.
Typically, by-laws permit the unit owners to remove a manager “with or without cause” by an affirmative vote of a majority of the unit owners (or some greater voting requirement). If there is any concern whether or not a board has sufficient cause to remove a director, the matter should be put before the unit owners for vote where cause is not an issue.