2006 Code of Virginia § 55-460 - Executive board members and officers

55-460. Executive board members and officers.

A. Except as provided in the declaration, the bylaws, subsection B or otherprovisions of this chapter, the executive board may act in all instances onbehalf of the association. In the performance of their duties, the officersand members of the executive board are required to exercise (i) if appointedby the declarant, the care required of fiduciaries of the proprietary lesseesand (ii) if elected by the proprietary lessees, ordinary and reasonable care.

B. The executive board may not act on behalf of the association to amend thedeclaration, to terminate the cooperative, to elect members of the executiveboard, except as provided in the declaration pursuant to subsection F, or todetermine the qualifications, powers and duties or terms of office ofexecutive board members. The executive board may fill vacancies in itsmembership for the unexpired portion of any term.

C. Within 30 days after adoption of any proposed budget for the cooperative,the executive board shall provide a summary of the budget to all theproprietary lessees and shall set a date for a meeting of the proprietarylessees to consider ratification of the budget. Such meeting shall be heldnot less than 14 nor more than 30 days after mailing of the summary. Themeeting place, date, and time shall be provided with the budget summary.Unless at that meeting a majority of all the proprietary lessees or anylarger vote specified in the declaration reject the budget, the budget isratified, whether or not a quorum is present. In the event the proposedbudget is rejected, the periodic budget last ratified by the proprietarylessees shall be continued until such time as the proprietary lessees ratifya subsequent budget proposed by the executive board.

D. Subject to subsection E, the declaration may provide for a period ofdeclarant control of the association, during which period a declarant, orpersons designated by him, may appoint and remove the officers and members ofthe executive board. Regardless of the period provided in the declaration, aperiod of declarant control terminates no later than the earlier of: (i) 60days after conveyance of 75 percent of the cooperative interests which may becreated to proprietary lessees other than a declarant; (ii) two years afterall declarants have ceased to offer cooperative interests for sale in theordinary course of business; or (iii) two years after any development rightto add new units was last exercised. A declarant may voluntarily surrenderthe right to appoint and remove officers and members of the executive boardbefore termination of that period, but in that event he may require, for theduration of the period of declarant control, that specified actions of theassociation or executive board, as described in a recorded instrumentexecuted by the declarant, be approved by the declarant before they becomeeffective.

E. Not later than 60 days after conveyance of 25 percent of the cooperativeinterests which may be created to proprietary lessees other than a declarant,at least one member and not less than 25 percent of the members of theexecutive board must be elected by proprietary lessees other than thedeclarant. Not later than 60 days after conveyance of 50 percent of thecooperative interests which may be created to proprietary lessees other thana declarant, not less than 33 1/3 percent of the members of the executiveboard must be elected by proprietary lessees other than the declarant.

F. Unless the declaration provides for the selection of one or moreindependent members of the executive board, no later than the termination ofany period of declarant control, the proprietary lessees shall elect anexecutive board of at least three members, at least a majority of whom mustbe proprietary lessees. To the extent the declaration so provides, themembers of the executive board appointed by the declarant may continue toserve out their terms and the declarant may continue to appoint a minority ofthe members of the executive board until all of the development rightsreserved by the declarant have been exercised or have expired. In addition,the declaration may provide for the selection of one or more independentmembers of the executive board, who are neither proprietary lessees noraffiliated directly or indirectly in any way with the declarant, by a vote oftwo-thirds of the members of the executive board. The executive board shallelect the officers. The executive board members and officers shall takeoffice upon election.

G. Notwithstanding any provision of the declaration or bylaws to thecontrary, the proprietary lessees, by a two-thirds vote of all personsentitled to vote at any meeting of the proprietary lessees at which a quorumis present, may remove any member of the executive board with or withoutcause, other than a member appointed by the declarant.

(1982, c. 277; 2004, c. 242.)