COLUMN: Barbara Holland

Q. We are in the midst of removing two of our officers. The management company has provided confusing information regarding the subject.

As I read state law, it indicates that two-thirds of all persons entitled to vote at any owners meeting at which a quorum is present may remove the directors with or without cause. We have 61 members. A quorum is 13 and two-thirds of that would be nine votes.

I spoke to the Real Estate Division's ombudsman, who agrees with my view. Our management company states that it is 41 of 61 votes.

Our property manager also states that, since I am an officer, I should not be involved in any way. I read state law to mean that it is my responsibility to cause this action to occur. I want to do the right thing and not cause a problem for the association.

A.The process for the removal of directors was changed during the last legislative session, as follows:

First, secret written ballots must be sent to the owners in a fashion similar to the election of directors.

Second, only the secret written ballots that are returned to the association may be counted. The secret ballots must be opened and counted at a meeting (a board meeting or an owner

meeting).

Third, a quorum is not required to be present when the ballots are opened and counted at the meeting.

In the past, the process was that a quorum needed to be present at that meeting. To remove a director, two-thirds of the quorum had to vote in the affirmative. If a quorum was 51 owners from a membership of 100 owners, than two-thirds of 51, or 34 owners, had to vote for removal.

The confusion over this section of the law, NRS 116, is the direct result of the Legislature, as Section 1 states that a quorum is necessary and Section 1d states that a quorum is not necessary. Traditionally, the latest change in the law would take precedence over older sections. In this case, that a quorum is not required.

Did the Legislature then mean that two-thirds of the members must approve removal or, as in the above example, two-thirds of 100 which would mean 67 owners need to approve removal? Or, did the Legislature mean that a quorum would govern the process of counting the ballots, even if the quorum was not present in person?

I believe that the legislative intent was that you did not need a quorum in person, but that a quorum of ballots received was necessary, and from that total two-thirds of the ballots of a quorum would be necessary to remove a director. In your case, if 13 owners represented a quorum, then the association would need two-thirds of the ballots received or nine owners to approve removal.

Obviously, this is a section of law that needs to be clarified at the next legislative session.

Questions for Barbara Holland may be sent to Association Q. & A., P.O. Box 7440, Las Vegas, NV 89125. Her fax number is 385-3759.

Barbara Holland, Certified Property Manager, is president and co-owner of H&L Realty and Management Co. She is a member of the Institute of Real Estate Management and is the author of two books on the subject. Holland is a past president of the Greater Las Vegas Association of Realtors.

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