BOARD MEMBERS FILLING A VACANCY IN A NEW YORK HOMEOWNERS ASSOCIATION CAN NOW SERVE THE REMAINDER OF THE TERM OF THE SEAT THEY WERE APPOINTED TO FILL

The New York State legislature has delivered some good news for New York Homeowners Association (“HOA”) Boards. Most New York Homeowners Associations are governed by the Not For Profit Corporation Law (“NPCL”).  As a result, in the event of a conflict between an HOA’s By-Laws and the NPCL, the provisions of the NPCL govern. 

One of those consequences was NPCL 705(c) which previously required that if an HOA Board filled a vacancy on the Board of Directors, the person who filled that seat would need to be put up for election at the next annual meeting (regardless of whether there were additional years remaining on the term of that seat).  This provision was contrary to what most HOA governing documents provide, which typically permit HOA Boards to fill vacancies for the remainder of the term of those seats. 

This has all changed now. NPCL 705(c) was recently amended to now permit a director who fills a vacancy to serve until the end of the term of the director whose seat is being filled OR for a term to be determined by the Board which ends at an annual meeting.  This means the Board decides when filling the vacancy whether the person they are appointing will fill the remainder of the term of the seat they are filling or at an earlier annual meeting (such as the next annual meeting).

Note, the legislature did not amend the provision of the New York Business Corporation Law (“BCL”) which governs other Corporations such as Co-ops.  As such, a director who fills a vacancy on a Co-op Board must run for re-election at the next annual meeting due to the existing provisions of the BCL. This also does not apply to Condominiums. In that regard, Condominiums were not affected by the NPCL provision and replacements to vacancies on Condo Boards were able to (and remain able to) serve the remaining unexpired term.