It was a typical sunny July morning in New England. Hot cups of coffee and the big Sunday papers were being enjoyed in communities across the region: in Rhode Island, Charles was at the breakfast table on the tenth floor of his spacious high rise condominium; in Massachusetts, Rita sat at her kitchen table in her comfortable townhouse; in Connecticut, Roger was on the patio of his neatly appointed garden home; in Maine, Samantha was headed over to the neighbor's to enjoy some coffee and pastries in their recently converted 20-unit condominium; and in Vermont, Elliot and his wife had finished their coffee and paper and were headed for a round of golf on the grounds of their active adult community.

Three thousand miles away in California, similar scenes were being played out, except that much of California's coastal areas were under a heavy layer of marine fog and it was typically gloomy day in July—always to be expected! The same morning scenario was taking place across the state: in downtown San Diego, Richard sat pondering the small craft sailing in San Diego Bay from the 35th floor of his high-rise condominium, one of about 40 constructed within the past 10 years as part of the downtown revitalization; about 100 miles up the coast in Orange County, Charlotte was getting ready to go horseback riding along the 15 miles of horse paths located in her gated community of 602 single-family homes; further up the coast in Hollister, Sam sat at the breakfast table in one of the 75 ultramodern uniquely designed homes, each nestled someplace on a 40-acre parcel; in San Francisco, Edward relaxed in one of the living rooms of a five-unit condo-conversion, one of about 50 apartment complexes that had been converted during the recent housing boom in his neighborhood.

So what do all of these people have in common? As it turns out, they share five different points:

These types of communities include a two-unit "condex," or a duplex that has been incorporated; townhouse-style attached condominiums in clusters of three, four, and five to one building; garden-style homes; condo conversions; two-story to 40-story stacked condominiums or co-operatives; master planned communities comprising sub-associations of condominiums, apartments, and single-family detached homes with expansive recreational facilities for the residents; active adult communities of various styles and amenities; and large-scale associations of several thousand homes.

Based on the type of actual housing, the boards on which they serve have varying responsibilities and powers over what is commonly called "common area" and "common area components." In a community of attached homes or living units, for example, the board will have responsibility for painting, roof maintenance and repair, some plumbing, and structural elements. In addition, the board is responsible for ensuring compliance with the declaration, otherwise known as the Covenants, Condition & Restrictions, and Rules and Regulations. In a community of detached single-family homes, the board will have much less responsibility for maintaining common areas and more interest in preserving architectural integrity, enforcing compliance with the rules, and responsibility for maintaining recreational amenities such as pools.

The Foundations of the Election Process

In general, in almost all of the states mentioned above, the predominant number of common-interest communities are incorporated and fall under their state's respective corporation's codes as Mutual Benefit Non-Profit corporations. In Massachusetts, however, common-interest communities are classified as trusts and not tied to the code that governs corporations.

In each of these states, there are a small number of the CICs that have elected not to incorporate. Additionally, each of these states has in place a statute (some more than one) specifically dealing with common-interest communities, common-interest developments, or common-interest ownership. The relative impact these laws have on the governance and operation of these communities depends on particular laws.

By definition, common-interest communities are real estate conceived by the developers and built to meet certain housing needs. In the 1970s—as is still true today—the identified need was higher density housing, and beginning in the 1980s and continuing to today, the answer was the master planned communities of single-family detached homes. Common-interest communities share four defining characteristics: (1) all owners are automatically members; (2) governing documents create mutual obligations; (3) mandatory fees or assessments are generally levied against owners and used for replacement of common area components and the daily operation of the community; and (4) owners share some level of property interest in the community.

Real estate laws determine the contents of the "Declaration" or "Covenants, Conditions and Restrictions" (a term this author dislikes because it conveys a negative tone), which, in turn, define the responsibilities of the owners and the association, the classes of membership, and the many other specifics of how people live in these communities.

Because owners hold some form of share in common (they are shareholders) and they are self-governed by a board of some type (directors, trustees, and so forth), the owners of these communities have been wedded, since the beginning, to the corporation's codes, which form the basis of the second most important document: the by-laws. By-laws define, among other things, the roles and responsibilities of the governing body, meeting requirements for members and the boards, and—in conjunction with the corporations codes—the election processes.

In most communities, the election of directors is broadly driven by the requirements defined within the specific state's corporations code and then modified by the community developer in the specific association by-laws and declarations (CC&Rs) as far as defining the voting classes.

The Ubiquitous Archenemy: Quorum

Corporations codes require that in order for members to conduct the business of the corporation at a members meeting (better known as the annual election of directors) there must be present by proxy or in person some minimum number of members. This minimum number of people is also known as a quorum.

In general, most of the corporations codes in New England set a base quorum at 20 percent of the voting power. California Corporation's Code Section 7512, by contrast, sets the quorum as one-third of the voting power to hold a meeting of the members and allows the by-laws of the corporation to set a different quorum.

In California's more than 40,000 common-interest developments, by-laws have a range of quorum figures from 15 percent to 5 percent. Older communities that have not amended their by-laws there may still require quorums higher than 50 percent. If they cannot meet the first call, some associations have a reduced quorum figure for an adjourned meeting. The specific quorum figure is established at the discretion of the developer, with the result that two communities of the same size and located within blocks of each other, but built by different builders, can and usually do have different quorum requirements for annual meetings.

Election Basics

Regardless of the particular state, electing directors follows a predictable path. The basic steps are:

• establishing candidate qualifications;

• soliciting candidates;

• a paper ballot announcing the candidates and usually including a place for additional write-in candidates;

• a duly noticed and scheduled meeting of the members (usually the annual meeting); and

• achieving the required quorum to hold the meeting, at which one of the agenda items is the election of directors. In this case, the election translates to counting the results collected from the paper ballots, if the community was able to make quorum.

There are two additional twists in the process: The first is nominations from the floor, and the second is the use of the proxy, which may take many forms. Among the most noteworthy is the proxy being used to help achieve quorum and embedding the actual ballot in the proxy document. While the corporate proxy was originally devised to provide those members who could not be present at the meeting because of illness or distance with a way to exercise their vote or at least help make quorum, in condominiums, the proxy has been used as an effective tool to wage war for the sake of power.

Nominations from the floor are another staple of the standard corporation election process. In the traditional setting, where the voting and ballot tabulation take place at the actual meeting, nominations from the floor work well to accommodate people who decide to run at the last moment. Keep this in mind as I describe the basics of the new California CID election law.

California's New Election Law

On July 1, 2006, California entered a new era in community association elections. In addition to changing the process, the new law has driven a greater need for application of technology to the process. Briefly, the highlights of the new law are:

• It defined new procedures for conducting voting/elections for: electing or removing directors; special assessments; amending governing documents; and for conveying common area to another party.

• It established a requirement for six basic rules to be enacted by the board of directors.

• It established a mail-in ballot system for the above elections. The ballot is modeled after the general California County absentee ballot process, which uses a ballot and double envelope system where ballots must be mailed to all eligible owners not less than 30 days before the meeting.

• It mandated that the election be overseen by an independent third party, called the "inspector(s) of election." The inspector is either one or three people.

• It mandated that opening of the envelopes and tabulation of the ballots be conducted in full view of those present at the meeting.

• It redefined the use of the proxy, from being just an instrument to convey voting rights to another party, and recast the proxy as a two-part form. One part conveys the right to vote and a separate detachable part is the voting direction by the proxy-giver to the proxy-holder. The law also stipulated that proxy was not the same as a ballot. The first part of the proxy must be turned in for an actual ballot/envelope set, which when submitted counts toward quorum. Once the proxy-giver gives up his or her right to vote, he or she has no way of knowing if the proxy-holder voted as directed.

• It established that a ballot itself, when submitted in a properly completed registration (outer) envelope, shall count toward establishing quorum, as if the member were present in person, and is irrevocable.

The new law also created an unexpected practical challenge for associations with by-laws that permitted nominations from the floor. Ballots are sent to every eligible owner/voter 30 days before the meeting and when the ballots are returned by sufficient owners to achieve quorum to convene the meeting and conduct the election, how was it possible to effectively vote any nominations from the floor?

The new law is an excellent first step toward making community association elections in California a much fairer and more straightforward process, but there are other changes that can be made to make the process even better.

Applying Technology to the Election Process: Where Are We?

Don't let anyone tell you that size and age do not matter! When it comes to community association elections, they matter a great deal. Keep in mind that, in general, community associations are relatively small (the majority are between two and100 units); approximately half or more are self-managed; and depending on the age of the owners, the acceptance and use of today's computer and Internet technologies varies greatly.

In New England, the largest community association probably contains about 700 units in attached housing. In this part of the country, the most growth in recent years has been in condo conversions and active adult communities. In general, the election process relies primarily on paper ballots, and the voting takes place at the time of the actual annual meeting. In New England, technology makes only a brief appearance in elections, most commonly when some professional community association managers use preformatted Excel spreadsheets on their notebook computers to enter and tabulate the votes.

In California, on the other hand, while the majority of the state's community associations include 100 units or less, there are also nearly 100 large-scale communities that include several thousand homes. Each of these large-scale communities functions like a small city and is overseen by its own general manager and staff.

To conduct elections in these large communities, applying technology is a necessity. The new California election process has spawned a few companies that specifically provide the independent inspector of election services, and some accounting firms are also taking on this new role. On the one hand, the new law precludes anyone who is already under contract to the association from providing these services, but it also provides a loophole so the management company and attorney representatives may participate, if the board adopts a rule that endorses their involvement.

While many of these new resources are still staffing the election process for manually counting the ballots, companies like ours are applying some of today's technology in the form of electric high-speed letter openers to open the two envelopes and in developing and using software for high- speed imaging and tabulation systems to scan and tabulate the actual ballots, thereby being able to execute the election process in a fraction of the time.

The Future?

So what does the future hold? In California, more and more technology will be applied to speed up the process for the larger associations. For associations of a few hundred homeowners or less, the manual ballot process will continue. But it is also quite conceivable that someday the election process for community associations will be conducted via the Internet. What will make the Internet a viable election tool? Cost, the willingness to embrace technology, protection of the identity of the voter, and ensuring only one ballot is cast per unit will be the determining factors. In New England, on the other hand, because of the size of the communities, it is likely that the current processes will remain the status quo.