January-February 2012 Issue
Elections! Elections! Elections!
Elections were used as early in history as ancient Greece and ancient Rome, and throughout the medieval period, to select rulers such as the Holy Roman Emperor and the Pope. This November, the next United States presidential election will be held and the course of American history for the next four years will take shape. Of course, for residents and managers of homeowners associations, elections often occur on an annual basis.
The California Corporations Code mandates that corporations have a board of directors. Without a board, a corporation cannot conduct business, which means insurance coverage will lapse, maintenance ceases, rules enforcement ends, the association’s corporate status lapses and lawsuits cannot be answered, potentially exposing each individual owner to liability. Therefore, associations must hold elections to select a board of directors. This article provides tips and guidelines on how to smoothly and efficiently run a board election.
Election Rules Required. All associations are required to adopt election rules that include the following: nomination procedures, candidate qualifications, a method of selecting independent third parties as inspectors of election, rules regarding access to association media during campaigns, rules regarding access to common area meeting space during campaigns, secret balloting procedures, and a ballot form. If your association does not presently have them, it should adopt Election Rules consistent with both Davis-Stirling and the governing documents.
Set the Date and Send Notice. Most associations hold annual elections to elect directors. The date of the annual meeting should be set 90-120 days before the meeting, if it is not specified in the bylaws. Notice of the annual meeting must be given 30-90 days in advance of the meeting. The meeting agenda should specify that an election of directors will take place at the annual meeting.
Appoint Inspectors of Election. Since inspectors must receive and count ballots, an inspector should be appointed early enough in the election process so that ballots can be mailed to the inspectors or to a location designated by the inspectors.
Call for Candidates. The board can send a Call for Candidates memo to the membership advising of the number of open positions on the board of directors. If there are any director qualifications specified in the association’s governing documents, those should be enumerated in the Call for Candidates to ensure that unqualified nominees do not submit their names. Finally, the closing date for when nominations will be accepted should be stated according to the governing documents.
Campaigning. All members have a right to campaign. Boards should, however, be cognizant of the fact that if any candidate or member advocating a point-of-view is provided access to association media (such as association newsletters and Internet Web sites) during a campaign, the association must provide equal access to all candidates and members advocating a point-of-view on the issue.
Proxies. Under the current election laws, using proxies alongside secret ballots has become problematic. To eliminate the confusion, some associations have taken steps to limit the use of proxies and conduct elections only by secret ballot. This allows elections to be conducted entirely through the mail and dispenses with the need for proxies. Boards should consult the governing documents and legal counsel to determine the best course of action for their association.
At the Meeting. At the annual meeting to elect directors, the inspector of elections will determine when quorum has been achieved as stated in the association’s bylaws. At that point, the meeting should be called to order by the president. The minutes of the prior year’s annual meeting should be approved, and the ensuing steps should be followed to ensure an effective and smooth meeting:
1. Reports. If reports are given at the meeting, they usually include a summary presented by the treasurer of the association’s year-end financial condition and a report by the president of the past year’s projects and future vision.
3. Open Forum. Members in good standing are free to speak on any matter of interest to the community.
4. Election Results. Once the inspector of elections finished tallying the votes, election results should be announced.
5. Adjournment. A motion should be brought to adjourn the meeting.
In conclusion, with elections being at the very root of democracies, in the context of association board elections, many specific procedures should be followed. The guidelines set forth above provide a good starting point for current board members and managers to organize board elections. Because so many of the requirements are within Davis-Stirling, boards should always include legal counsel before making significant changes to election procedures.
Azadeh Saghian, Esq. is an attorney with Adams Kessler PLC. She can be reached at firstname.lastname@example.org.
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