While the election format in a condominium community is pretty much the same as for any other club or organization, property managers and board members are looking to make the process easier and increase unit owner participation. Unit owner participation, in particular, can be a challenge as some condos find it hard to get enough members for a quorum at their annual meetings.
To combat low attendance, some community associations are using raffles, or offering prizes –drawing names from returned ballots at the annual meeting, or combining the meeting with a cookout or other social event. Other communities with low attendance are trying to increase proxy voting. And the use of online voting is definitely trending upward as more business is conducted by computer.
Are Election Procedures a Turn-Off?
“Serving on a condo board is voluntary…” and getting owners to participate is often a challenge, states attorneyFrank Flynn of the Boston law firm of Downing & Flynn. He reports that in Massachusetts, the election process is not something that is legislated by the state; rather, “elections are set forth in the condo docs (rules and regulations).”
As a guideline, these rules should address the qualifications of candidates; nominating procedures; campaign procedures; qualifications for voting; the voting time period; the authenticity, validity and effect of proxies; and the methods of selecting election inspectors to handle the ballots. Much of this will be contained in the association’s bylaws.
“And most of them,” he continues, “require a quorum of over 50 percent of the beneficial interest at an annual business meeting.” Explaining “beneficial interest,” Flynn says that the quorum is not a simple majority of the number of unit owners, but is similar to a “weighted” vote. Each unit owner’spercentage of the commonly-owned property is based on the value of that owner’s unit, since units within the same community can vary in square footage and market value. Votes, therefore, “just like fees (and taxes), are paid according to this beneficial interest,” notes Flynn.
At most communities, the management company takes care of annual meeting details, such as communications, notifications and ballots, he states, although, “I will run (the election) foran association if they do not have a management company… An attorney might count the votes, or maybe a trustee who is not on the ballot may be designated.”
All unit owners are notified before the annual meeting and election, he states (see sidebar). On the meeting date, “After you reach a quorum, you can hold the election, but simply reaching that quorum can be a major challenge. At one of our (client) associations, we had to postpone the meeting twice before we got an election completed.”
Jared McNabb, CMCA, AMS, PCAM, director of acquisitions with Crowninshield Management Corporation, AMO, in Peabody, Massachusetts, agrees that election procedures in Massachusetts are “relatively boilerplate, and are usually included in the condo docs” which are often based on a standard model. His company handles elections for client communities but he admits that “the biggest problem that I face is certainly apathy… at many annual meetings, I’m not getting a quorum… and the same cast of characters is who shows up. My advice is always, that each homeowner should serve on the board for at least one term… hopefully you get a couple who stick,” and continue to participate.
Management may take many steps in getting people to participate, he notes: “We can post notices in the buildings, mail meeting notices, email, follow up… but there’s only so much you can do” to guarantee a quorum.
One strategy he mentions is to “go door-to-door with proxies,” which can take the place of an actual head count and ensure that the meeting reaches a quorum.
Proxy Votes Can Help Reach Quorum
The proxy vote, as explained by Flynn, is simply when a voter/unit owner designates another person to cast their vote, using a signed letter or form. “The proxy could be given to a fellow unit-owner or to a clerk for the board,” he states. The voter may indicate his or her choice of candidate or issue with a “directed” proxy – or leave the choiceup to the person designated as proxy.
If voter apathy is a problem and getting enough voters to show up at the annual meeting is indeed a challenge, McNabb’s suggestion may just be the solution – collect enough proxy votes from owners who aren’t interestedin actually showing up. They may add up enough for a quorum and allow the annual meeting to proceed.
The use of proxy votes may be a solution for seasonal resort communities as well. In Vermont, John Watanabe isthe property manager for Winterplace at Okemo in Ludlow, Vermont, and oversees a community of slope-side residences. “Our firm handles all election details, soliciting, proxy votes, collecting, tallying,” he says.
Management at a seasonal property faces some unique issues at election time. “We request that all candidates submit bio information. This is important because we’re seasonal and these units are not their primary residence and owners are less likely to know each other.” The annual meeting is held when owners are most likely to be on site, such as late winter in ski country. Watanabe admits that enlisting candidates is a big challenge. He and his staff solicit candidates, he says, “working off e-mail, mail, fax, door-to-door… If there are not enough volunteers, the board can appoint someone to fill a position.”
He points out that Vermont recently voted to adopt the Uniform Common Interest Ownership Act (UCIOA), which is now the law in a number of other states. Watanabe says the new statute may affect the association election process somewhat, but the statutewon’t go into effect in Vermont until late 2012.
UCIOA Tweaks Election Standards
Besides Vermont, Connecticut is the other New England state that has adopted the Common Interest Owner-ship Act (CIOA) – and it has already gone into effect there. Attorney Scott Sandler, from the law firm of Perlstein, Sandler & McCracken, LLC, of Farmington, Connecticut, explains that “overall, UCOIA doesn’t change much, although it limits undirected proxy votes to 15 percent of all proxies. When proxy documents are directed, on the other hand, and the voter actually names his or her choices of issues or candidates… those have no limits.” The CIOA document explains the reasoning for limits on proxy votes in a Section 14 comment: “Proxyvoting has been the subject of some controversy in the state, primarily as a consequence of some unit owners seeking to collect very large numbers of undirected proxies to be cast at meetings where contested matters are to be voted on…”
Connecticut’s CIOA also sets a standard quorum, if that is not addressed in the association bylaws, at 20 percentof the owners entitled to cast votes. The statute also explains, “Mandatory quorum requirements lower than 50 percent for meetings of the association are often justified because of the common difficulty of inducing unit owners to attend meetings…”
The Future May Be Online
While the promotion of proxy voting may solve the lack-of-quorum problem, an even better solution may be online voting. Many professional groups have been using it for years, and it is slowly taking hold among condo and homeowner associations. Plus, electronic andother methods for holding elections are mentioned as an option in many state UCIOA documents.
At Survey & Ballot Systems of Eden Prairie, Minnesota, Marketing Manager Tim Madsen explains that his firm has been handling the election process for organizations for 20 years, evolving from paper balloting to online and electronic methods, and states, “Goingonline has really helped (groups) with voter response rates.”
Most clients require a mix, he notes. “We help (boards or trustees) set up the ballot for bylaw changes or elections, both electronically or on paper. We scan in ballots” so that documents maybe tallied or stored both electronically and on paper. The election timetable is the same, although as the first step, a link to the (secure) election website is e-mailed to unit owners, along with a postal mailing, if necessary.
“This website link includes everything that would have been mailed,” he says, “Voters can fill out ballots online or print everything out and mail it or bring it to the meeting. We collect all the online voting responses and hand over a report of the results to the board at the annual meeting.”
When an organization hires Survey & Ballot Systems, all the work and details of an election are handled by the firm – and priced accordingly, Madsen notes, “so the (group’s) election budget has a lot to do with whether or not” they can take advantage of the service. He adds that, “We are developing moreonline options all the time that will bring down the costs of the service.”
A similar company, BigPulse.com, based in San Francisco, has been handling elections for associations for about 10 years, and started out with an online protocol. Sales Director Dominic Swinn says that his firm can handle “anything that requires a response” such as surveys, elections or any kind of vote or tally. “We have write-in capabilities for the day of the election… It’s easy to create (online) a ballot, candidate bio and photo or other text.”
A Dollar A Vote
To get an idea of the fee for an election service, Big Pulse offers a “price calculator on the website,” Swinnnotes. He adds, “For a self-managed election, (as a starting price) you can figure about $1.00 per vote,” and using extra election management services would up the costs. “Going online is very effective for increasing participation,” he states, “Most associations report more voter turnout… (it can be) up to double.”
While online voting offers many advantages, any association considering these services needs have its data files well prepared, updated and ready to go, advises Katherine Murphy, a website developer and manager based in Denver. She has a homeowner association (HOA) client who has used an online service “for a number of years, to conduct surveys and collect opinionsfrom homeowners about all kinds of proposals for projects within their community. This process has worked very smoothly, once the procedure was understood and everything was in place… the board received great feedback (that) they could use.”
She notes that the same HOA tried the online service for their annual election, “but they had data-management issues, especially in regards to software. They had too much (technical) catching up that needed to be done,” so it wasn’t cost effective for them. Murphy adds that the online election service, for an association that’swell-prepared, “is a much smarter way to go, you get a live record of proceedings and it’s all processed much faster.”
While annual elections will continue to have strict requirements and traditional protocols, the advent of technology and the online voting option appears to add real improvements, from immediate feedback and transparency to better accuracy –and most importantly, participation.
Marie Auger is a freelance writer and a frequent contributor to New England Condominium magazine.