Elections And Voting


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A presentation describing the main points of election rules and secret ballot voting for community associations in California

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Elections And Voting

  1. 1. Elections & Voting - Basics, Trends, & Beyond… Sandra L. Gottlieb, Esq. Swedelson & Gottlieb Lisa Davis, CMCA, CM, CCAM The Ballot Box
  2. 2. Adoption of Election Rules
  3. 3. Adoption of Election Rules <ul><li>Statutorily required as of July 1, 2006 </li></ul><ul><ul><li>Civil Code § 1363.03 has been effective for almost three years. </li></ul></ul><ul><ul><ul><li>This Code section requires common interest developments to adopt rules regarding election procedures for “Secret Ballot” voting: </li></ul></ul></ul><ul><ul><ul><ul><li>Election/Removal of board members </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Elections regarding assessments (as required) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Amendments to the governing documents </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Grant of exclusive use common area </li></ul></ul></ul></ul><ul><ul><li>Some community associations still have not adopted the required election rules. </li></ul></ul>
  4. 4. Adoption of Election Rules <ul><li>If election rules are not adopted, can you still hold a meeting of members? </li></ul><ul><ul><li>Yes, you can still hold a meeting, but the results of any member vote on the four Secret Ballot subject matters would be subject to challenge in court. </li></ul></ul><ul><ul><li>The court could void the results of the election/vote and, pursuant to Civ. Code § 1363.09(b), order: </li></ul></ul><ul><ul><ul><li>The challenger’s attorneys’ fees and costs be paid by the association; and </li></ul></ul></ul><ul><ul><ul><li>A civil penalty of up to $500 be imposed on the association for each violation . </li></ul></ul></ul>
  5. 5. Adoption of Election Rules <ul><li>Beware of boilerplate and generic rules found on websites or copied from other communities. </li></ul><ul><ul><li>Election rules are subject to statute, as well as an association’s Bylaws and CC&Rs. </li></ul></ul><ul><ul><li>The Condominium Bluebook attempts to provide boilerplate election rules, which may be insufficient for many associations. </li></ul></ul>
  6. 6. Appointment of the Inspector of Election
  7. 7. Appointment of the Inspector of Election <ul><li>Procedure for appointment: </li></ul><ul><ul><li>An association’s election rules specify the procedure. </li></ul></ul><ul><ul><ul><li>Many association election rules provide for appointment by the board. </li></ul></ul></ul><ul><ul><li>If the election rules allow the board to make the appointment, appoint the Inspector by resolution at an open board meeting. </li></ul></ul><ul><ul><li>Appointment must occur prior to distribution of voting materials, so that the Inspector’s address may be pre-printed on the outer return envelope, subject to certain exceptions. </li></ul></ul>
  8. 8. Appointment of the Inspector of Election <ul><li>Timing of appointment: </li></ul><ul><ul><li>Civ. Code § 1363.03(h) provides that sealed ballots must at all times be in the custody of, or at a location designated by, the Inspector. </li></ul></ul><ul><ul><ul><li>This indicates the Inspector must be appointed prior to distribution of the voting materials. </li></ul></ul></ul><ul><ul><li>If the Inspector is not named prior to distribution of the voting materials, or if the Inspector fails to appear or refuses to act, the Board may appoint an Inspector at the meeting (pursuant to Corp. Code § 7614), but this appointment and the validity of the ballot tabulation may be subject to legal challenge. </li></ul></ul>
  9. 9. Appointment of Inspector of Election <ul><li>Number of Inspectors: </li></ul><ul><ul><li>An association’s election rules or other governing documents may provide for either 1 or 3 Inspectors. </li></ul></ul>
  10. 10. Appointment of Inspector of Election <ul><li>Qualifications: </li></ul><ul><ul><li>The Inspector must be an “independent third party,” which means they are not: </li></ul></ul><ul><ul><ul><li>A board member or relative of a board member </li></ul></ul></ul><ul><ul><ul><li>A candidate for the board or a relative of a candidate for the board </li></ul></ul></ul><ul><ul><ul><li>A person or business currently employed or under contract to the association for compensable services unless expressly authorized by the election rules. </li></ul></ul></ul><ul><ul><li>The Inspector may be a member of the association if he/she meets the above conditions. </li></ul></ul>
  11. 11. Appointment of Inspector of Election <ul><li>Inspectors receive and hold the Secret Ballots at the location they specify. </li></ul><ul><ul><li>The mailing/drop-off address may be the office of the Inspector or the association’s managing agent. </li></ul></ul><ul><ul><li>Secret Ballots must not be opened prior to tabulation at the meeting. </li></ul></ul><ul><ul><li>Once a valid Secret Ballot is received by the Inspector, it is irrevocable. </li></ul></ul>
  12. 12. Preparation of Secret Ballots and Related Materials
  13. 13. Preparation of Secret Ballots and Related Materials <ul><li>Read the Bylaws and Election Rules. </li></ul><ul><ul><li>These governing documents may contain special provisions regarding preparation and distribution of voting materials. </li></ul></ul><ul><ul><li>If cumulative voting is allowed, such a provision will affect how the Secret Ballot for electing board members should be prepared. </li></ul></ul>
  14. 14. Preparation of Secret Ballots and Related Materials <ul><li>The Secret Ballot must note quorum requirements: </li></ul><ul><ul><li>Consult the quorum provisions in the Bylaws. </li></ul></ul><ul><ul><li>State the quorum requirement (usually a percentage or “majority” of voting power) and number of votes that would satisfy quorum on the Secret Ballot. </li></ul></ul><ul><ul><li>Remember that quorum is affected by suspended voting rights (the total voting power of the association does not include the number of members ineligible to vote). </li></ul></ul>
  15. 15. Preparation of Secret Ballots and Related Materials <ul><li>The Secret Ballot must note the requisite owner approval requirement (which is different from quorum): </li></ul><ul><ul><li>State the approval requirement (usually a percentage or “majority” of voting power) and number of votes that would constitute approval on the Secret Ballot. </li></ul></ul><ul><ul><li>Remember that like quorum, the approval requirement is affected by suspended voting rights (the total voting power of the association does not include the number of members ineligible to vote). </li></ul></ul><ul><ul><li>For board elections, the Secret Ballot should state how the positions up for election will be filled ( i.e. the two directors with the highest number of votes will be deemed elected). </li></ul></ul>
  16. 16. Preparation of Secret Ballots and Related Materials <ul><li>The Secret Ballot must note the deadline for its return to the Inspector of Election. </li></ul><ul><ul><li>If the vote is conducted exclusively by mail, the deadline is the final deadline by which votes may be accepted. </li></ul></ul><ul><ul><li>If Secret Ballots will be accepted in-person at the meeting, indicate this deadline as well as the deadline for voting by mail. </li></ul></ul>
  17. 17. Preparation of Secret Ballots and Related Materials <ul><li>The Secret Ballot must be confidential. </li></ul><ul><ul><li>No identifying marks may be made on the Secret Ballot or on the inner envelope. </li></ul></ul><ul><ul><li>Identifying marks may cause a Secret Ballot to be invalidated by the Inspector of Election. </li></ul></ul>
  18. 18. Preparation of Secret Ballots and Related Materials <ul><li>The notice of meeting for the tabulating of Secret Ballot votes should include: </li></ul><ul><ul><li>The date, time and place of the meeting; and </li></ul></ul><ul><ul><li>The names of board candidates in nomination as of the date of notice (if applicable). </li></ul></ul><ul><ul><li>It may be convenient to send the notice of meeting concurrently with the Secret Ballot voting materials. </li></ul></ul><ul><ul><li>Even if there are no candidates for the board, or only enough candidates to fill open board positions, the Secret Ballot should still be sent for write-in candidates, as statute does not allow for election by acclamation. </li></ul></ul>
  19. 19. Preparation of Secret Ballots and Related Materials <ul><li>Timeline for the mailing of Secret Ballots by the association: </li></ul><ul><ul><li>Distribute voting materials to the membership not less than 30 days prior to the deadline for voting. </li></ul></ul><ul><ul><li>An association should consider sending voting materials out at least 31-33 days prior to the meeting, so that ballots being returned by mail can have an earlier deadline for return (i.e. 2:00 P.M. on the business day before the meeting), to ensure that mailed in ballots are received in time to be tabulated by the Inspector. </li></ul></ul>
  20. 20. Preparation of Secret Ballots and Related Materials <ul><li>Items you must include in the voting materials: </li></ul><ul><ul><li>Secret Ballot </li></ul></ul><ul><ul><li>Voting Instructions for the Secret Ballot </li></ul></ul><ul><ul><li>Inner envelope </li></ul></ul><ul><ul><li>Outer envelope </li></ul></ul><ul><ul><ul><li>Must include designated area for the owner’s printed name, signature and address at the association. </li></ul></ul></ul><ul><ul><li>Notice of meeting </li></ul></ul><ul><li>Other items you may include with the voting materials: </li></ul><ul><ul><li>Meeting agenda </li></ul></ul><ul><ul><li>Candidate statements </li></ul></ul><ul><ul><li>Minutes from last year </li></ul></ul>
  21. 21. Proxies
  22. 22. Proxies <ul><li>If allowed by the association’s governing documents, proxies may still be used. </li></ul><ul><ul><li>Proxies are not voted, but are exchanged for Secret Ballots. </li></ul></ul><ul><ul><li>Proxies are less popular now that Secret Ballots can simply be mailed to the Inspector. </li></ul></ul><ul><ul><li>Proxy forms given to the Inspector must not indicate how the proxyholder is to vote. </li></ul></ul><ul><ul><li>No statutorily required proxy language exists. </li></ul></ul><ul><ul><li>Only association members may be designated as proxyholders. </li></ul></ul>
  23. 23. Proxies <ul><li>Submission of proxies: </li></ul><ul><ul><li>May be submitted to the association’s Secretary in advance of the meeting. </li></ul></ul><ul><ul><li>May be submitted to the Inspector of Election in advance of, or in person at, the meeting (assuming the polls have not been closed). </li></ul></ul><ul><ul><li>Proxies cannot be submitted with an already completed Secret Ballot. </li></ul></ul><ul><ul><li>Proxies are kept with the official voting records. </li></ul></ul><ul><ul><li>Historically, proxies were a one-page document; now they must be two pages. One page is the authorization given to the Inspector and one page is the voting instructions kept by the proxyholder. </li></ul></ul>
  24. 24. Proxies <ul><li>Proxy requirements: </li></ul><ul><ul><li>A proxy may give the proxyholder the power to vote on any and all matters the proxyholder deems appropriate, or the proxy may specify the exact matter(s) on which the proxyholder is allowed to vote. </li></ul></ul><ul><ul><li>Proxies are valid for 11 months from the date they are executed, unless otherwise noted on the proxy. </li></ul></ul><ul><ul><ul><li>The maximum term of any proxy is three years. </li></ul></ul></ul><ul><ul><li>Proxies must be dated and signed by the member granting the proxy. </li></ul></ul><ul><ul><li>Instructions to the proxyholder regarding how to vote must be separated from the proxy authorization. </li></ul></ul>
  25. 25. Proxies <ul><li>What constitutes a formal proxy? </li></ul><ul><ul><li>There is no formal requirement for what constitutes a proxy. </li></ul></ul><ul><ul><li>A proxy can be handwritten on a napkin, or it can be a formal typewritten document. </li></ul></ul><ul><ul><li>The proxy simply needs to meet the direction, signature and date requirements. </li></ul></ul>
  26. 26. Election Day
  27. 27. Election Day <ul><li>Member Meeting or Board Meeting? </li></ul><ul><ul><li>If a member meeting is held, the association may wish to discuss the measure and allow a final chance to cast votes before instructing the Inspector of Election to close the polls and tabulate the vote. </li></ul></ul><ul><ul><li>If the vote is held exclusively by mail, no discussion occurs and the Inspector tabulates the vote at an open board meeting. </li></ul></ul>
  28. 28. Election Day <ul><li>If the vote is held at a Member Meeting: </li></ul><ul><ul><li>Members should sign a register as they submit their vote. </li></ul></ul><ul><ul><li>The proxyholder should sign the register on behalf of the member for which they are holding a proxy (in addition to signing for their own vote). </li></ul></ul><ul><ul><li>Members should be encouraged to refrain from voting until after discussion of the measure, if any substantive discussion is expected to occur. </li></ul></ul><ul><ul><li>The polls close at the discretion of the Inspector of Election. </li></ul></ul>
  29. 29. Election Day <ul><li>Alternate / substitute voting materials: </li></ul><ul><ul><li>Have alternate / substitute voting materials available at the meeting for those homeowners who have forgotten, lost or not received their voting materials. </li></ul></ul><ul><ul><li>Provide alternate / substitute voting materials only if the Inspector confirms that the member has not yet voted a Secret Ballot. </li></ul></ul><ul><ul><ul><li>Once submitted, a Secret Ballot is irrevocable and cannot be “re-voted.” </li></ul></ul></ul>
  30. 30. Election Day <ul><li>Tabulation of votes: </li></ul><ul><ul><li>The Inspector of Election tabulates the votes in front of the membership at the meeting (or another properly noticed time and place). </li></ul></ul><ul><ul><li>The Inspector may designate other independent third parties to assist with the tabulation process. </li></ul></ul><ul><ul><li>The Inspector may decide to invalidate any Secret Ballots with identifying marks or improperly completed outer envelopes. </li></ul></ul>
  31. 31. Election Day <ul><li>Reporting the results: </li></ul><ul><ul><li>The Inspector reports the tabulated results to the board immediately after tabulation is complete. </li></ul></ul><ul><ul><li>The board must report the results to the membership within 15 days of the vote. </li></ul></ul><ul><ul><li>A mention of the results must be put in the association’s meeting minutes for the next general session board meeting or member meeting. </li></ul></ul>
  32. 32. Voting Records
  33. 33. Voting Records <ul><li>What voting materials and records must be retained? </li></ul><ul><ul><li>Secret Ballots </li></ul></ul><ul><ul><li>Outer Envelopes (not inner envelopes, unless invalidated) </li></ul></ul><ul><ul><li>Voting register </li></ul></ul><ul><ul><li>Tabulation sheet </li></ul></ul><ul><ul><li>Inspector of Election report to the Board of the tabulated results </li></ul></ul><ul><ul><li>Proxy authorizations </li></ul></ul>
  34. 34. Voting Records <ul><li>Who maintains custody of the voting materials and records? </li></ul><ul><ul><li>The Inspector of Election retains official custody until 9 months after the vote. </li></ul></ul><ul><ul><ul><li>The Inspector may provide that the records be kept with the association’s managing agent. </li></ul></ul></ul><ul><ul><li>After 9 months, custody of the records converts to the association. </li></ul></ul><ul><ul><li>The association must retain the records for at least 12 months after the vote occurred. </li></ul></ul>
  35. 35. Contesting the Results
  36. 36. Contesting the Results <ul><li>How are the results of a vote contested? </li></ul><ul><ul><li>Any member of the association may contest the validity of any election, appointment or removal of a director within 9 months of the election, appointment or removal. </li></ul></ul><ul><ul><li>A contesting member must submit a written request to the Inspector of Election to inspect the ballots for the vote in question. </li></ul></ul><ul><ul><ul><li>The Inspector should be present and observe the member’s inspection of the ballots. </li></ul></ul></ul><ul><ul><li>If the contesting member challenges the results of a vote, the member can request a recount of the ballots and/or seek intervention from the court. </li></ul></ul>
  37. 37. Director Election Issues
  38. 38. Director Election Issues <ul><li>Director Qualifications: </li></ul><ul><ul><li>Examine the governing documents. </li></ul></ul><ul><ul><ul><li>It is not always the case that a director must be a member of the association. </li></ul></ul></ul><ul><ul><ul><li>Many governing documents only allow one owner of a unit, or one family member, to serve on the board at any time. </li></ul></ul></ul><ul><ul><li>Governing documents may require directors to be current in payment of assessments. </li></ul></ul><ul><ul><li>Governing documents may require directors’ compliance with the governing documents as a condition of holding office. </li></ul></ul><ul><ul><li>Other “good standing” requirements may apply. </li></ul></ul>
  39. 39. Director Election Issues <ul><li>Nominating Committees: </li></ul><ul><ul><li>A Nominating Committee (if applicable) is not the only route to nomination - members must be allowed to nominate themselves or others. </li></ul></ul><ul><ul><li>An association’s election rules or other governing documents may allow for nominations from the floor. </li></ul></ul><ul><ul><li>Some Nominating Committees’ duties as set forth in CC&Rs and Bylaws are now assigned to the Inspector of Election by the Civil Code. </li></ul></ul>
  40. 40. Director Election Issues <ul><li>Nominations from the floor at a member meeting: </li></ul><ul><ul><li>May or may not be allowed by the Bylaws or Election Rules. </li></ul></ul><ul><ul><li>If allowed, take nominations from the floor prior to the closing of the polls and allow voters to write in names of candidates nominated from the floor. </li></ul></ul><ul><ul><ul><li>The fact that nominations from the floor (or write-ins) are allowed should be noted on the Secret Ballot, especially if there are no candidates running. </li></ul></ul></ul><ul><ul><li>Candidates nominating themselves from the floor may be at a timing disadvantage because Secret Ballots already submitted to the Inspector are irrevocable. </li></ul></ul>
  41. 41. Director Election Issues <ul><li>Equal Access for Campaigning: </li></ul><ul><ul><li>If any candidate is provided access to media by the association (i.e. association newsletter, website, etc.), the association must provide the same access to all candidates. </li></ul></ul><ul><ul><li>An association may not edit or redact campaign content in media, but may include a statement that the candidate is responsible for the content. </li></ul></ul><ul><ul><li>An association must provide candidates access to common area meeting space, if such space exists, at no cost for purposes related to the election. </li></ul></ul>
  42. 42. Director Election Issues <ul><li>No association funds can be used for campaigns. </li></ul><ul><ul><li>The use of association funds for campaign purposes in connection with a board election is prohibited by the Civil Code. </li></ul></ul><ul><ul><li>Use of association funds for campaigns includes, but is not limited to, the following: </li></ul></ul><ul><ul><ul><li>Expressly advocating the election or defeat of any candidate </li></ul></ul></ul><ul><ul><ul><li>Including the photograph or prominently featuring the name of a candidate on a communication from the association or its board, except the voting materials, within 30 days of an election. </li></ul></ul></ul>
  43. 43. Director Removal (Recall)
  44. 44. Director Removal (Recall) <ul><li>Petition Requirements </li></ul><ul><ul><li>5% of the membership may execute a written petition to call a meeting of the association’s members at which a vote shall be held to remove any or all board members. </li></ul></ul><ul><ul><li>The petitioners must identify themselves by name in the petition and sign the petition. </li></ul></ul><ul><ul><li>The petition should be addressed and delivered to the association’s board of directors. </li></ul></ul>
  45. 45. Director Removal (Recall) <ul><li>Plan for a provisional director election contemporaneously with the removal (recall). </li></ul><ul><ul><li>Along with the Secret Ballot materials for the director recall, provisional Secret Ballot materials should be provided to elect a new director(s) should the recall vote be successful. </li></ul></ul><ul><ul><ul><li>The provisional vote will only count if the original director(s) is successfully recalled. </li></ul></ul></ul><ul><ul><li>Nominations may be taken for the provisional vote as if it were any other board election. </li></ul></ul><ul><ul><ul><li>Any director subject to a recall vote may place their name in nomination for the provisional vote. </li></ul></ul></ul>
  46. 46. Director Removal (Recall) <ul><ul><li>Director recall approval requirements: </li></ul></ul><ul><ul><ul><li>If less than 50 members in the association, by a majority of all members; or </li></ul></ul></ul><ul><ul><ul><li>If 50 or more members in the association, by a majority of a quorum of members. </li></ul></ul></ul><ul><ul><li>If less than the entire Board is to be recalled, and a Director was elected by cumulative voting, then a complex Civil Code provision applies that may make it difficult to remove that director (speak with association counsel in this event). </li></ul></ul><ul><ul><li>Individual director removal votes have become a popular vehicle to deal with board members who are breaching their fiduciary duties. </li></ul></ul><ul><ul><li>If quorum is not met, the members may adjourn the meeting for up to 45 days. </li></ul></ul>
  47. 47. Special Assessments
  48. 48. Special Assessments <ul><li>Association may experience a need for additional / replacement funds due to increasing delinquencies. </li></ul><ul><ul><li>An association should budget for bad debt (i.e. delinquent or uncollectible assessments). </li></ul></ul><ul><ul><li>Special assessments may be needed to make up for non-paying homeowners. </li></ul></ul><ul><ul><li>Properly planning for deferred maintenance items is an issue at many associations. </li></ul></ul>
  49. 49. Special Assessments <ul><li>Voting Requirements </li></ul><ul><ul><li>Civil Code § 1366(b) requires that special assessments in excess of 5% of the budgeted gross expenses of the Association for the current fiscal year be approved by the membership. </li></ul></ul><ul><ul><ul><li>This vote must occur by Secret Ballot vote. </li></ul></ul></ul><ul><ul><li>Regardless of governing document provisions, quorum for such a vote is a majority of the membership, and the approval requirement is a majority of a quorum. </li></ul></ul><ul><ul><ul><li>This quorum and approval requirement is different than for, among other things, director removal (recall). </li></ul></ul></ul>
  50. 50. Adjourning a Meeting
  51. 51. Adjourning a Meeting <ul><li>If quorum is not met: </li></ul><ul><ul><li>The members in attendance may vote to adjourn the meeting to another time and place </li></ul></ul><ul><ul><ul><li>Check the association’s governing documents for the timing for adjourned meetings. </li></ul></ul></ul><ul><ul><ul><ul><li>Statute requires that the meeting may not be adjourned for more than 45 days from the date of the original meeting. </li></ul></ul></ul></ul><ul><ul><li>Notice of the adjourned meeting need not be given if the time and place of the meeting are announced at the meeting at which adjournment is taken. </li></ul></ul><ul><ul><ul><li>If, after adjournment, a new adjourned meeting date is fixed, notice of same must be given to all members entitled to vote. </li></ul></ul></ul>
  52. 52. Adjourning a Meeting <ul><li>Adjourned meeting requirements: </li></ul><ul><ul><li>The association’s governing documents may provide for a lessened quorum requirement at an adjourned meeting. </li></ul></ul><ul><ul><li>No other business may be conducted at an adjourned meeting, except the business for which the meeting was adjourned. </li></ul></ul>
  53. 53. Getting Out the Vote
  54. 54. Getting Out the Vote <ul><li>Tools to encourage homeowner participation in the voting process: </li></ul><ul><ul><li>Hold homeowner forums to explain issues facing the association and its membership </li></ul></ul><ul><ul><li>Encourage “meet the candidate” events </li></ul></ul><ul><ul><li>Remind homeowners of the issues and their needed vote through newsletters, e-mails, etc. </li></ul></ul><ul><ul><li>Display information on the issues ( i.e. place flyers in the lobby or recreation room) </li></ul></ul><ul><ul><li>Provide voting materials within statutorily required timeframes </li></ul></ul>
  55. 55. Getting Out the Vote <ul><li>Communicate what is at stake and generate homeowner interest: </li></ul><ul><ul><li>Equate active participation in the community to investment in an owners’ property </li></ul></ul><ul><ul><li>Stress the benefit to the individual as well as the community as a whole </li></ul></ul>