When it comes to running board elections in a condo or co-op community, the biggest concern among those involved is making sure the elections are fair and balanced and nobody has a reason to cry foul. Elections can be heated as it is, so the voting process should run smoothly and without any hiccups. One election tabulation company representative remembers an extremely heated election she monitored where physical fighting even broke out. “It was bad,” she wryly recalls.
“Elections in associations can either be sleepers where there is a ton of apathy and you can't even get enough candidates to fill the seats to ones that are highly controversial,” says attorney Ron Perl of Hill Wallack in Princeton.
One of the most frequent dilemmas communities face is actually getting anybody on to the ballot in the first place. Robert Tierman, a partner with Litwin & Tierman, P.A., with offices in New York and New Jersey, remembers one co-op that had a problem of getting shareholders who actually wanted to run for a position on the board of directors. “This led to there not being an election; whoever wanted the position just got it,” he says. “The board was not fully constituted and there was a vacancy for a whole year. No major issues resulted from the situation but the board was less efficient and effective.”
So is the term ‘fair election’ an oxymoron? Although unfair elections—where there have been broken voting machines or improper ballot counting—make front page news, the truth is that it’s not common for elections to be unfair, at least technically speaking. On the other hand, it’s pretty easy to have a fair election for a co-op or condo board if these few basic guidelines are followed.
Follow the Bylaws
Check the bylaws to find out how often your elections should be held, and when. “The bylaws contain the term of office of board members and say when the elections should be held as well as the frequency of the election,” says Perl. “Most bylaws provide for staggered terms so that you most often have elections annually but I have seen associations where because of the staggering of terms they have elections two consecutive years and then the third year the election is skipped because no one's term is up. The true answer is you have to follow the provisions in your bylaws.”
Most legal professionals will agree that having staggered terms is preferable to overturning the entire board each year. “Our recommendation is to never have the entire board up for election at the same time. Staggered terms provide for stability and make sure that you always have people on the board that have historical knowledge,” says attorney Jeffrey A. Sirot of the law firm of Greenbaum Rowe Smith & Davis, LLP in Roseland.
Residents may also have the option to organize their own elections, if the board neglects to do so. “Most bylaws contain a provision that a certain percentage of the membership can call a special meeting,” says Sirot. “The bylaws also often contain provision for the removal of board members and the association may consider removing board members that do not comply with the bylaws.”
“In New Jersey, the New Jersey Department of Community Affairs has a group that handles complaints by owners of community associations where the board members may not be following the bylaws. That is one avenue of attack. They will normally contact the board and say 'we understand that you are not organizing elections under the bylaws and under the Planned Real Estate Development Act you need to properly conduct the affairs of the association'. You might get them to light a fire under the board,” Perl suggests.
The election process is usually the same for co-op and condo buildings. “For co-ops, each shareholder is entitled to a number of votes equal to the number of shares they own,” says Tierman. “For condos, each unit could be allocated a number of votes equal to the percentage of common interest owned, but some condos allow unit owners to vote on a one-vote-per-unit basis.”
He also explains that each co-op shareholder or condo unit owner can be allowed to cast the number of votes allocated to such owner for a number of candidates equal to the number of board seats up for election. He also explains that as an alternative, some co-ops allow what’s called cumulative voting, where shareholders can multiply the number of votes they have times the number of board seats up for election and then distribute the total among one or more candidates of their choosing. Although it sounds confusing, the bylaws are a great instruction manual to having a fair election—so reading them, understanding them, and applying them to elections provides a virtual road map through the process.
Get Outside Help
If your board doesn’t want to be personally responsible for administering the election, an outside vendor can run the election. The vendor can handle a part of the event, such as tallying up the votes, or they can run the entire election. Elections can be heated as it is, so the voting process should run smoothly and without any hiccups.
Linda Chiarelli-Gibbs is with Honest Ballot Association, an elections tabulation company based in Floral Park, New York, that was actually founded by Theodore Roosevelt in 1909. “He started this association because he wanted to have honest and fair elections and it’s what I go by,” says Gibbs, who runs elections for co-ops, condos, unions, associations and some counties. “I’ve worked on terraces if the lobby is too hot, a local school or church if the building doesn’t have a place to hold an election—even in a laundry room.”
It’s definitely not a fair election if the people aren’t there to vote, so make sure to spread the word that it’s taking place. Communication is key in both spreading the word as well as encouraging participation, in voting and running. “Where there is apathy in the community is usually a result of lack of communication. Communication helps inform people as to what is going on, the kinds of decisions the association is making, the challenges, where the money is being spent, and the need to be involved,” says Perl.
Once the word has been spread, it’s time to vote. “How we do the voting depends on the election,” says Gibbs. “We can do a machine vote, touch screen, scanners or paper—it all depends on the building and the community.”
Prepare the Proxies
Not everyone can make an election but they still want their votes to count and that’s where the proxy comes in. “A proxy allows one member to appoint another person to be their representative to vote for them. That representative becomes their proxy,” says Perl. He explains that there are two types of proxies, non-directed and directed. Non-directed proxies simply appoints someone to cast your vote as they see fit. One person acts as another. A directed proxy actually contains the names of the candidates and the owner then directs their proxy how to vote. This proxy is cast on behalf of the unit owner and their votes are counted just like he or she was there in person, Perl says.
Sirot adds that proxies can be useful because they allow members who cannot attend the meeting to vote for the candidates. “If there is any concern that a resident cannot make it, they should be encouraged to use a proxy,” he says.
In order to deter fraud, which is can occur with proxies, Sirot recommends having proxies that cannot be duplicated using for example, an anonymous code or stamp for each.
Usually co-ops and condos provide a form for this that is distributed to owners in advance of the meeting. The goal is to get enough owners voting by proxy to supplement those actually attending, and yield the majority necessary to conduct the election.
Proxies are revocable, which means the unit owner can change his or her mind, and they expire after eleven months. “Proxies are sometimes difficult for shareholders/unit owners to understand,” says Gibbs. “In my opinion, it’s always been a hassle with them because people complain that others have gone out and gotten proxies. Any proxy will hold up in court, even if you wrote it on toilet tissue, as long as the property lease owner is in the apartment. They can always designate someone to vote for them.”
Count the Votes
With all the ballots and proxies in, it’s time to tally up the votes and see if John Q. Smith won a seat on the board of directors.
Companies like Gibbs’ can do the counting or, says Tierman, “The co-op or condo president appoints two or three inspectors of election, who are asked to sign an oath indicating that they will count the votes honestly and fairly. It also is a good practice for the ballots to be sealed in an envelope or the ballot box, with the seal broken and the ballots removed only under the supervision of the inspectors of election,” he says.
Demand a Recount!
Well not really. Typically recounts are not demanded or conducted unless a small number of votes determined who was elected or there is some suspicion that the count was not properly conducted. “An apartment owner can seek court review of the count or any other aspects of the election by filing a petition with the court within four months after the election,” says Tierman. “Typically, owners controlling 25 percent of ownership interests can demand a special meeting to vote on the removal of one or more board members.”
Like fingerprints and snowflakes, every election is different and unique and can bring with it a host of excitement and problems. Tierman tells the story of a co-op where a board member was indicted for allegedly committing a financial crime unrelated to the co-op. The board asked him to step down and he refused. “Since the annual election was approaching in several months, the board decided not to call a special meeting to remove him,” says Tierman. “The annual election approached and he insisted on running for re-election. There was no provision of applicable law or the co-op's bylaws that prohibited his running.
The board member said he was unfairly accused and should be deemed innocent until proven guilty. The board removed him from the board-nominated slate but they were uncomfortable knowing that he could still be re-elected. “The board advised him that if he did insist on running, they would have no choice but to disclose to shareholders prior to the election, that he had been indicted. At the meeting, he finally saw the light and withdrew his candidacy. The lesson is that the board concluded that the only way to deal with the situation was to let them decide whether to re-elect him in spite of the indictment.”
“There are lots of challenges,” says Gibbs, who conducted a very highly-contested election where there were more proxies than people. She cites another election where it was claimed that the whole board was crooked. Overall, Gibbs says “there’s a lot of integrity for those people who are running for the board and those who are monitoring the election.”
Just as in a national or state election, one person’s vote might mean the difference between having a policy enacted or a new board put into place. Cast your votes wisely and be a part of the democratic process in your building community.
Lisa Iannucci is a New York-based freelance writer and a frequent contributor to The New Jersey Cooperator. Editorial Assistant Maggie Puniewska contributed to this article.