Board Member Resignation - Timing

[Guest Jason]

HOA Board Member announces she is actively selling her unit prior to expiration of her term.  Should Boarding Member continue to vote on matters pertaining to future Association Planning Initiatives, Financials, Strategy or other Board matters?  When should this Board Member recuse herself from Voting?

[J. J.]

Yes.  The board member is a board member until she resigns or becomes ineligible.

[Joshua Katz]

Is the concern that this will impact the selling price of the home?

That's a tricky business. A conflict of interest is a personal or pecuniary interest in matters to be decided not held in common with the other members. A person who is selling a unit, and whose price is therefore impacted by certain decisions has an interest, to be sure. But other members have the same interest - they like good property values, too.

On the other hand, this person has a stronger interest in high values, for two reasons. First, money now is better than money later, and since this person will cash in their unit value now, it matters more to them. Second, everyone else will pay taxes for, presumably, some length of time on the property value. This individual is selling and thus will stop paying property tax, presumably before an assessment. 

Then there's a third issue. If the HOA considers, say, putting in a capital improvement and borrowing the money, it would enhance property values now, but be paid by future owners, i.e. not the selling owner.

But there's yet another issue. As a board member, this individual represents a constituency. As was discussed at the recent National Leadership Conference, voters who represent a constituency should not abstain unless they must. So this member cannot act with an abundance of caution in this case.

Nonetheless, the question of what issues she should recuse on is fact-dependent. I would think the member should consider the above issues, and, more generally, decide whether a particular issue before the board raises concerns for her that are not held in common with the others, and that constitute a personal or pecuniary interest. (An example of a personal interest would arise, for instance, if the board considered restraints on alienation.)

In any case, so far as the rules in RONR are concerned, the member cannot be compelled to recuse.

[Guest Jason]

The specific concern pertains to the Board recommending a proposed increases in quarterly assessments or for additional special capital improvement assessments.  These recommendations are proposed in the long term interest of the Owners and the Association but would be an immediate detriment to anyone actively selling their unit as potential buyers are apt to walk away in the face of these increases in assessments and special assessments.  The interest of the Board Member selling their unit is no longer aligned with the long term interest of the Owners who are looking to protect their investment value into the future.

[Weldon Merritt]

8 minutes ago, Guest Jason said:

The specific concern pertains to the Board recommending a proposed increases in quarterly assessments or for additional special capital improvement assessments.  These recommendations are proposed in the long term interest of the Owners and the Association but would be an immediate detriment to anyone actively selling their unit as potential buyers are apt to walk away in the face of these increases in assessments and special assessments.  The interest of the Board Member selling their unit is no longer aligned with the long term interest of the Owners who are looking to protect their investment value into the future.

That doesn't change the answer. While arguably, the member should abstain, under the rules of RONR, she cannot be compelled to do so. If there are likely to be a lot of issues of this nature, then arguably she should even resign. But again, she cannot be compelled to do so.

Since we are talking about an HOA, there may be applicable statutes that bear on the issue. If so, those would take precedence over RONR.

[Guest Jason]

Thank you all for your input as it is greatly appreciated.