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Bylaws com. prepares for report to directors

By Greg Ellison

(Nov. 18, 2021) In addition to reviewing work group efforts to propose governing document updates, the Ocean Pines Bylaws and Resolutions Committee last Friday discussed other language tweaks related to board candidate eligibility, property ownership and director removals.

Committee Chairman Jim Trummel said the bylaws work group held its most recent meeting on Nov. 3.

Trummel said a status review sheet was divided between specific bylaws updates marked in green on which a consensus has been reached, with three topics listed in red that need further defining.

“In effect, we’re given the go-ahead to put out proposals and a format for review by the board of directors,” he said.

Issues still unsettled involve board oversight of the Architectural Review Committee, the search committee and associate membership status.

Trummel said advice from legal counsel is needed for the ARC issue, while the other topics are slated for discussion at a board of directors meeting.

At this point, the committee should create a final list of proposed bylaws changes with background details, Trummel said.

Committee members Keith Kaiser and Lora Pangratz both recommended listing issues separately for an eventual referendum vote by residents.

Kaiser said an extensive list of bylaws updates might deter voters.

“We don’t want to off-track all this work that’s been done to date because we can’t get consensus on one or two items,” he said.

Trummel said the committee could recommend the board consider issuing a referendum with separate provision votes as opposed to a single package.

Kaiser said voter turnout from the last major bylaws overhaul in 2008 was below 40 percent.

“By separating into different issues we might get better participation,” he said.

Pangratz proposed a sectional approach.

“Is there a way to group similar changes?” she asked.

Trummel said the work group has already grouped proposals based on bylaws sections.

Board liaison Colette Horn said changes are under review for bylaws section 5.02 related to board candidate eligibility.

Under current bylaws requirements, the Search Committee has until May 15 to submit a board candidate list to the association secretary, who has until June 1 to confirm eligibility and turn names over to the Elections Committee.

Trummel asked if Horn was suggesting two weeks was not sufficient time for the secretary to confirm eligibility.

Horn said candidates are required to meet eligibility criteria by May 15.

“By May 15, all requirements must be met,” she said.

In 2018, former board member Brett Hill was rejected as a candidate by then secretary Horn for unpaid assessment fees at the May 15 deadline.

Hill later filed suit claiming bylaws permit assessments to be paid up to 35 days prior to the voting deadline.

Horn said there were few means to ascertain candidates’ future intentions on May 15.

“How would the secretary know by mid-July they would pay assessments?” she said.

Kaiser said bylaws 3.01C includes a 35-day deadline for members to pay assessments or fines to qualify for casting ballots in board elections.

“I was told it was for a review period prior to mailing ballots, he said.

More recently, Kaiser said the association had updated automated balloting systems, which allows quicker confirmation of dues receipt that could shorten the timeframes.

“It causes confusion relative to other dates,” he said.

Trummel said there is a crucial distinction between eligibility of members to participate in governance and board candidacy.

“Thirty-five days is a voting rights provision,” he said. “There is a failure to recognize there is a difference between eligibility to be able to do something and your right to cast a ballot in an upcoming vote.”

Trummel recommended reinserting a reference that board candidates must be a “member in good standing,” which was removed in 2008.

“Put in you must have paid annual charges and can’t have voting rights suspended,” he said.

Horn said the timelines included were also tied to the Elections Committee’s desire to mail ballots as quickly as possible to avoid delays.

“This year there were over 300 ballots that came in after the due date,” she said. “Presumably that had to do with the slowness of the US Mail service.”

Horn recommended retaining the current deadline date of June 1 for the secretary to confirm eligibility.

“It gives time to clear up any confusion,” she said.

Kaiser said bylaws language requires board candidates to have dues up to date by May 15.

Horn agreed candidates should have their affairs in order by May 15.

“There shouldn’t be a grace period,” she said.

Trummel said prior to the 2008 updates, candidates were expected to be in good standing when submitting their applications.

Committee member Steve Jacobs recommended changing the June 1 date for confirming eligibility to match the May 15 application deadline.

“That removes the inconsistencies in 5.02 … and resolves the conflict between 3.01,” he said. “If you want to change the date to May 15 you’re putting the onus on the candidate to get his ducks in a row.”

Trummel concurred and proposed committee members exchange thoughts and reconvene discussions at a future meeting.

Turning to the issue of candidates’ property ownership status, Kaiser said the committee could recommend two courses of action for board consideration.

“One is going to have to come from real estate lawyers because it’s going to have to stand up in a court of law,” he said.

Conversely, Kaiser said the association could take a more direct approach.

“We simply state your name’s got to be on the deed, period,” he said. “The name of any candidate must appear on the deed of real property.”

Pangratz inquired about candidates’ disclosures.

“Is there a question on the form asking if they own as part of a trust or LLC?” she said.

Horn said the current candidate application states, “if Ocean Pines records did not show you as owner of record please submit supporting documents that does.”

“Which turned out to not be a good way to word it,” she said.

Horn said the application should require, not request, supporting documentation.

“The question comes into play of what percentage of ownership,” she said.

Trummel said speculating on the issue of candidacy eligibility was not productive while the current lawsuit brought by board candidate Rick Farr remained unsettled.

“How deep are you going to dig into land records to find out what relationship to Ocean Pines is satisfactory to you for the individual being a member of the board?” he said. “If we get too far away from a simple approach, then we’re in a hopeless situation.”

The final discussion item was further defining cause for board member removal.

Kaiser asked if the Maryland HOA Act provided guidance or restrictions or is the association allowed to set parameters.

“Instead of trying to define cause, which is a legal rabbit hole, just say they can be removed and edit out for cause,” he said.

Jacobs said advice form legal counsel would be required.

“Taking it out may be an even deeper rabbit hole,” he said.

Jacobs said an aggrieved party could argue the bylaws offer no protection to board members who could be removed for any reason.

Horn suggested cause could be defined by violation of code of conduct.

“We need a process that can be consistently applied,” she said.

Trummel said bylaws do include a definition of “for cause.”

“The board needs to reconsider what they want us to do with this,” he said.

Committee member Bob Hillegass said booting a board member was no different from terminating an employee.

“You have to show reason,” he said. “You’re going to wind up in litigation depending on how you handle it.”