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Board Elections Getting Counted, Being Heard

 Every condo development and HOA has a board of directors in charge of governing  the community’s finances, physical maintenance and other day-to-day business. The board is not  just a group that runs the association, however—it is also a group that runs the business. Part of that responsibility is to  keep the community fiscally sound, and to make sure the process of choosing new  leaders is transparent and above reproach.  

 “You have to have an election, pursuant to bylaws,” says David J. Byrne, Esq., a shareholder and attorney with the  Lawrenceville-based law firm of Stark and Stark. “If you’re run by a board, you have to have an election—it’s just a question of when.”  

 So how often must an HOA hold elections, and how must those results be tabulated  in order to assure a fair and honest election in which everyone's voice is  heard and accounted for? Let's take a look.  

 How it's Done

 Boards are generally elected by HOA residents, but the process by which this  happens varies from one community to the next because of variations in  different communities' bylaws. Residents elected to the board bring a variety  of skills to the office, but obviously not all directors or trustees are  equally knowledgeable in all the aspects of their job. Conducting elections of  new board members is one task that the board can flub—sommetimes with disastrous results.  

 Residents of a community who believe an election was conducted improperly can  challenge the results of that election. The matter can wind up in court,  costing everyone a great deal of money, time, and energy. In the process,  neighbor can be pitted against neighbor and hard feelings can unwittingly be  engendered—sometimes over what is fundamentally just a misunderstanding of how to conduct a  proper community election.  

 Nobody wants to wind up being viewed as a possible cheat by his neighbor just  because his HOA's election rules weren’t specific enough, or because board members themselves weren’t aware of how to run the process correctly. That’s why it is essential to understand the proper election procedures, and run  things in accordance with them. A properly run election helps to avoid even the  appearance of impropriety and reduces the risk of expensive legal challenges.  

 Democracy Working

 In general, buildings and HOAs have rules for elections detailed in their  bylaws. Most call for a yearly election of board members, usually to take place  at the annual resident meeting. “Every condo and co-op has bylaws,” says Linda Gibbs, executive director of the Honest Ballot Association based in  Floral Park, New York. The organization was started by Theodore Roosevelt in  1909 to run fair and honest elections. “They have to go according to the bylaws—usually annual meetings, elections once a year.”  

 The board and/or property manager are responsible for promoting an election to  community association residents and for facilitating the election process,  Gibbs continues. Generally, the community’s bylaws require that a written notice of the election be sent to residents in  advance of the vote—usually at least 10 days and no more than 40 days prior to the election.  Residents should consult their community’s bylaws to see when notice of the election must be sent.  

 In addition to being incorporated into every set of co-op or condo governing  documents, “There is also a law covering it: the Non-Profit Corporations Act,” says Bruce Freeman, a partner with the law firm of Woehling & Freeman in Westfield.  

 Sometimes, the bylaws go so far as to specify the month when the elections will  occur although such specificity is not necessary. Boards usually hold elections  in the spring, after the community’s financial statements are ready—anywhere from April through June.  

 In most cases, the entire slate of board members is replaced—or at least voted upon. Each of the board members is usually elected to serve a  1-year term. Though common practice, replacing a board entirely from one year  to the next can cause gaps in an HOA's institutional memory. Inexperienced  board members who join the board far behind the knowledge curve often make  rookie mistakes that might be avoided with more guidance from senior board  members.  

 That inefficiency is leading many boards to consider changing their bylaws to  have board members elected on a staggered or rotating term basis, so that there  is some continuity of experience on the board, says Byrne. For example, in year  one, the president and secretary are up for election, and in year two, the vice  president and treasurer. This staggering of positions is becoming more and more  common in HOAs across the country. “Staggered terms are very common,” says Byrne. “And they are the best way to operate.” After all, he continues, boards of directors are not hockey teams, where there  are teams within the team that work different shifts. If two directors remain  on a board from one year to the next, they can keep alive the association's  institutional memory, and help things run more smoothly.  

 Getting Out the Vote

 It's an oft-repeated truism that when a board does its job well and an  association runs smoothly, residents tend to become apathetic. Some won't even  bother to attend the annual meeting, making it difficult to attain a quorum—that is, a majority of unit owners attending or casting their votes by proxy  through another voter. Failure to achieve a quorum will mean that no board  business can be conducted – and that includes the election of board members.  

 It is not entirely uncommon for a board of directors at an annual meeting to  physically send people out to collect written proxy votes from residents in  their units so a quorum may be reached and an election held. The distribution,  collection, verification and tallying of the proxy votes is a matter that can  be complicated, and sometimes is best left to a tabulation or election  coordinating company.  

 Usually, a paper proxy ballot is sent to voters in a building or HOA at the same  time the election notice is sent. The unit owner can sometimes fill out the  proxy and send it back to whoever is running election—the management company, attorney, or election coordinating company—or a designated agent for the voter, such as another unit owner. Sometimes,  residents appointed by the board as inspectors of elections will help with the  collection of proxy votes.  

 Vital as they are, proxies can sometimes be a big pain, both to collect and to  tabulate. “It’s always a problem with proxies,” says Gibbs. “Candidates knock on doors, they try to get proxy votes. It’s a matter of who got there first.”  

 Gibbs says that sometimes, Candidate A will go to the door and get Resident X to  sign a proxy. Later, Candidate B will show up, and Resident X will change her  mind. Then, Resident X may show up at the meeting anyway, only to vote for  Candidate C. This can give migraines to whoever is in change of collecting  ballots.  

 Getting Help

 Dealing with the proxies and with the other ballots cast in an election can be  tricky tasks, especially in an election in which seats on the board are being  hotly contested. For that reason, some boards simply opt to employ a  professional tabulation company to run their elections.  

 Tabulation companies make what can sometimes be a difficult election process run  smoothly, so that results are rarely contested—and if they are, they're less likely to be overturned in court. Hiring any  outside professional such as a lawyer or tabulation company to oversee the  election will help to provide some transparency in the process. And, says  Byrne, when residents approve of the way in which the election was run, as they  usually do when an objective third party is brought in to handle voting and  tabulation, they're more likely to accept the results of the election.  

 Transparency is important in the election process, say the pros, which makes the  selection of an election inspector equally important. Despite the lofty title,  inspectors of elections are people from the audience chosen to do the duty.  

 “They don’t have to be lawyers or professionals,” says Byrne. “They can’t be the candidates, obviously, and they can’t be affiliated with the candidates,” i.e., spouses, children, parents, roommates, and so forth. “When I’m running elections, I like to have inspectors,” says Byrne. “It gets people involved in the process.”  

 Getting a tabulation company to help your association carry out an election can  be more helpful than simply having people on-hand to count ballots. “We write the election paperwork in layman’s terms so people understand it and the process goes more smoothly,” Gibbs says. “Election companies can help with the wording of election literature, to create a  better line of communication in the vote.”  

 Counting—and Contesting—Votes

 Most often, votes for boards of directors are done by paper ballot. In some rare  cases, votes are done by hand—though that method is discouraged by professionals familiar with best practices  for community elections, since having a concrete record of the vote is  essential.  

 Often in building elections, employees of the management company count the  votes, with the oversight of inspectors of election, who, as Byrne pointed out,  are appointed by the board. Usually the voters’ ballots are sealed and either collected by inspectors or placed by voters in a  ballot box prior to the tally. While regular elections are annual events, it's  possible that residents might initiate a special election, if they feel it’s needed—such as in cases of board misconduct or disfavor.  

 If an HOA's members feel that an election was held in bad faith, or was simply  mishandled, there are steps that can be taken for legal redress, says Hubert C.  Cutolo, Esq., of Edison-based law firm Sodini & Spina.  

 “The Planned Real Estate Development Full Disclosure Act (PREDFDA) requires fair  and open elections for New Jersey HOA boards,” he says. “[A] board must exercise their legislatively established powers in a manner that  promotes the goal of fair and open elections. Most governing documents contain  provisions that outline a basic agenda for elections and also contain  procedures—such as the appointment of inspectors—for elections. The appointment of neutral inspectors can help avoid charges of  tampering that may occur if ‘concerned parties’ are involved in the tabulation of ballots. Board[s] should seek to avoid even  the appearance of impropriety.”  

 Residents with complaints about how their board has conducted an election can  contact the New Jersey Department of Community Affairs (DCA) and notify them of  the concern with how the process was handled, says Cutolo. The DCA may then  assist the board in implementing a more fair and open process.  

 If an HOA board outright refuses to hold new elections when residents are  demanding them, or ignores complaints of election mishandling, residents can  and sometimes do go to court to get a new election. Such steps are rare  however, says Freeman.“If there’s a challenge to an election, the state, through the Non-Profit Corporations  Act, says that the challenge first goes to the inspectors of elections, and  then to Superior Court.  

 The fact that boards must not only run their HOA's election process, but that  they are themselves elected by their fellow residents, and cuts to the core of  the mini-democracy that makes homeowners associations so special. “Setting it up so you get as close as you can to the ideal of free exercise of  choice,” says Freeman. “That’s the responsibility.”  

 Jonathan Barnes is a freelance writer and a frequent contributor to The New Jersey Cooperator.

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6 Comments

  • Is there ever a time when an election is not necessary? For instance if there are only enough people running to fill the required seats?
  • I live in a restricted deed 55+ NJ development. An election is on the horizon and I submitted, by the deadline, my letter of intent and a professional resume. The Board held a closed meeting to select only those candidates they would place on the ballot. I questioned why I was not placed on the ballot and received a reply that although highly educated and qualified, it was the decision of the Board president and if I wanted to learn why I was not selected to see him. The election now will be for three incumbents with no opponents. I believe the closed "selection process" and the lack of notifying the residents of all who are interested in running for the board are illegal, Can you advise? Thanks
  • The ballot that was mailed out has the name, address of the voter and the 12 people running. The president picked out 3 inspectors, during the meeting told them to count the ballots. What they did was to open every envelop put all the ballots in a pile and count to see if we had a quorum, we did not so they took the ballots to the desk where the board was setting and said we would have to hold over the meeting until next month. My concern is all ballots were open and they are just in a pile where anyone can see them it leaves me wondering on the security of the vote.
  • At the Annual Meeting which should of been held in May took place in September. The BOT of (7) held a meeting of themselves took a vote an told the (2) people that were running that they took a vote and out of 7 votes 6 voted not to have these 2 back to the BOT this was told in a room of homeowners then they ballots of of 3 who did not reside in the community please advise?
  • We have a board consisting of 5 members. Our election is coming up and we have 3 new members running along with the five incumbent directors. We'd like to vote for 2 of the new members and 3 of the incumbent directors, will this be defeating the purpose of getting 2 new people elected? Or should we vote for just the 2 new members? Thanks
  • Our By-laws indicate a specific date and includes a rain date to hole annual elections, for years this has been abused because the president is incompetent and believes he can do whatever he chooses. At this point it is safe to say this is a defunct board for a number of years and they ignore the suggestions to correct. Legally what are the options? By-laws was the agreement i had with the co-op and proprietary lease was given to me months after I purchased and moved in.