Elections
Q: We will be having our annual elections in October. Last year we didn't know most of the candidates were who were on the ballot. It seems that there must be a preferred way to run these HOA elections. Can you give us some pointers on elections so that we can improve our process?
A: Thanks for bringing up this important topic. Nothing is more important in community governance than having an active and effective board of directors. The board is the key governing body that is required to make decisions affecting the whole community from managing the funds to hiring vendors for the various tasks required to keep the community facilities in top condition. You certainly want the most qualified people who are willing to step forward and volunteer for the position. Here are a few tips for having a successful election.
· Start looking for candidates early. At least three months before the election the standing nominating committee, or one which is appointed in accordance with your documents or Roberts Rules, should begin the process by advertising for and otherwise seeking qualified candidates. Verbal communication is the most effective way to get the best people to step forward. Invite people you know who are qualified and might be interested to consider running. Ask them to attend a board meeting to get familiar with the current issues. If possible, make sure that those who are approached are not just friends of the current board members, who may or may not be qualified.
· Set rules in advance and make instructions easy to follow. When the mailing for the annual meeting is sent it should include any rules which will apply to the use of proxies and voting. For instance, if delinquent owners are ineligible to vote, then a cut off for bringing dues current in order to qualify for voting should be stated. Let owners know who is on the slate for directors, but also that nominations can be made from the floor at the meeting, although a candidate has a better chance of being elected if he or she can speak to or communicate with the owners in advance.
· Provide clear procedures for the use and collection of proxies. If there are rules about the use of proxies in the bylaws those rules should be restated in the meeting notice packet. There may be a limit on the number of proxies one member may hold. Over the years it has been determined that the best way to increase proxy returns is to include a stamped return envelope with the notice packet. Some documents require the witnessing of proxies. The Virginia condominium statute used to have this requirement, but it was removed a couple years ago; however, if the documents require it then it must still be done. The Property Owners Association Act does not contain any special requirements for proxies. Proxies can be tricky documents and should be prepared by or reviewed by counsel before use. Also, while the Association should provide a proxy form, and even include the name of a person who is appointed by the owner who is signing, if the owner submits his own proxy form which is in compliance with the law and the documents, it must be counted. Also, proxies prepared by the Association should not appoint "the board of directors" as proxy - an individual must be named. Also, the proxy should not state that it is to be voted "with the majority" - often there are more proxies than live voters, so there is no majority without the proxies. Finally, the person appointed does not need to be another owner in the community unless your bylaws require it.
· Consider adopting absentee (mail-in) ballots as part of your bylaws. Most bylaws do not allow for absentee ballots, probably because proxies are seen as absentee ballots - however, they are not. An absentee ballot allows the owner to cast his vote by mail without authorizing another person to vote for him. Often proxies are instructed, that is, it tells the proxy holder how to vote. In such a case the absentee ballot accomplishes the same purpose without the use of a proxy. Of course, the problem with both absentee ballots and instructed proxies is that there is no room for reacting to changes at the annual meeting such as the addition of a new candidate nominated from the floor, or a withdrawal of a candidate. So there is no good substitute for being physically present at the meeting.
· Advertise the annual meeting/election. Like anything else, if you want customers you have to advertise. Put a conspicuous article in the newsletter three to four months in advance of the election. Place reminder notices in the community building or on the bulletin Board and, for those who have one, on the community's web site. Encourage personal attendance at the meeting in the reminder - proxies can be revoked if you show up. Send a reminder notice via regular mail and email about the meeting to arrive three to five days before the meeting.
· Arrange an informal gathering of the owners to meet the candidates. This unofficial gathering, for this sole purpose, should occur at least two weeks before the election date. There should be a moderator from the current board of directors who monitors the time of each candidate and the number of questions asked by those in attendance. Candidates should be given at least three to five minutes to speak. Questions should be held until all speakers are finished. If there are more questions for one candidate than another that should not be a concern.
· Have neutral parties conduct the election. This can be done by the management company, by the nominating committee or even a separate elections committee. In any event, no one related to a candidate should be involved in the counting of the votes.
We hope these suggestions will help you have better participation in your election process this year.
We just recently found out that the 3 board members on our community association board did not even attempt to hold an election this past June. All 3 were elected to their posts in June, 2003 and our bylaws state that terms run for 3 years, meaning that there should have been an election. They did not give notice, ask for nomination or anything. This board has been acting rather "shady" lately and a group of concerned citizens has been formed. If the 3 board members did not have the election that they were supposed to as stated in the bylaws, are they illegally occupying the board seats? Also, how would this effect anything they have done since June 2006 such as renewing the contract with the very questionable woman who manages our books (and also will not disclose any financial statements). Several residents were sued over the summer for unpaid association dues. Would this also effect their cases possibly given the fact that the acting board members at the time may have been occupying the positions illegally?
RESPONSE: If the governing documents of the Association call for an election that has not been held, there would seem to be some wrongdoing, but it would not automatically be the case that the current directors are holding their positions "illegally." Generally speaking, directors serve until their successors are elected, and in the meantime somebody has to be running things. For this reason, previous acts legitimately taken for the benefit of the Association (such as suing delinquent owners for past-due assessments) may be upheld, and we could not given an opinion on the validity of other lawsuits without having further details.
If there is a property manager, your group of concerned citizens should contact that manager in writing to demand the election be held. If the manager is not cooperative, then your best option is to call a Special Meeting of the owners for the purpose of having the required elections. You should check your Bylaws to find out how many owners must participate to call a Special Meeting, and what the exact procedures are to follow through with that course of action. It may also be wise to hire local legal counsel to assist you in this process.
With regards the bookkeeper who will not share financial information, you should make your request in writing (with a copy sent to the current Board and property manager), and your request should reference Virginia Code Section 55-79.74:1 (if you are in a Condo) or Section 55-510 (if you are in a Homeowners Association), which gives you the right by law to have this information.
Jeanne S. Lauer, Esquire