Now that Spring is here, many community associations will start planning for their annual meeting.
Annual meetings are for more than providing information to the Community. They are also for electing Board Members who will be responsible for making the day to day decisions necessary to keep the finances and property in good order.
A well planned annual meeting and election is the key to finding good candidates and having a smooth transition and term for those elected. One way to begin the process of finding persons interested in running is to form a nominating committee. A nominating committee will seek candidates by canvassing the community, either in person or in writing, and assist the board in preparing the election materials prior to the annual meeting.
Both the nominating committee and slate of candidates should be formed well in advance of the notice of annual meeting and election.
Once the nominating committee is formed, it will be responsible for determining who is allowed to run according to the By-Laws. Do candidates need to own a unit and/or live in the community? Can a spouse who is not on the deed but resides in the community run for the board? Can someone be a candidate and owe assessments to the Association?
After these determinations are made and a list of candidates is ready, the board, nominating committee or managing agent will prepare the slate of candidates that will be sent to the community with the annual meeting notice. A resume of each candidate may be sent with the notice and/or a “meet the candidates” night can be scheduled prior to the election to help homeowners make an informed choice.
The notice of Annual Meeting must be distributed to owners within the time frame and in the manner specified in the association’s governing documents.
The content of the notice will include:
- time
- date
- Place of meeting
It should also state that no nominations from the floor will be accepted at the meeting if that is the choice of the Board.
The notice should include a Proxy form to be used if a homeowner is unable to attend the meeting.
A Proxy is a written instrument which allows an owner to appoint another to vote on his or her behalf at the annual meeting. The Proxy generally allows the owner to appoint either the Secretary of the Board or another person of the owner’s choice, to cast a vote on the proxy giver’s behalf. Whoever is named on the Proxy to vote on behalf of the owner must be present at the meeting.
There are two types of proxy ballots. A general proxy allows the holder of the proxy to vote as he or she sees fit. The Proxy holder is not bound to vote a certain way. A directed proxy binds the proxy agent to vote for specified candidates as directed by the owner.
All of the work necessary to prepare for the annual meeting and election will be meaningless if a quorum is not present at the meeting.
Without a quorum, the meeting is informational only. No election or voting of any kind is permitted. The percentage of owners required to obtain a quorum varies and boards need to check the By-Laws for this information. Owners may attend the meeting either in person or by proxy. There are many ways to increase the likelihood a quorum is met. The board may offer refreshments, or community members may solicit proxies prior to the meeting from those homeowners who cannot attend the meeting.
After all the preparations are done and it is time to conduct the meeting, the board or its managing agent should prepare an agenda.
The “Order of Business” section often found in the By-Laws is a good form to adopt. Make sure to have a homeowner attendance sign-in sheet and a vote tally list. Check the governing documents to determine who is allowed to vote. Can owners in arrears vote? Is the voter an owner? Typically, when a unit is owned by a Trust, the trustee has the right to vote, not the resident.
Upon signing in at the registration desk, each homeowner should be given a ballot – one per unit. At a homeowners’ association, owners get one ballot only, regardless of whether they own one or more than one unit. Marking off the proxies received before the meeting on the sign-in list will save time and ensure that only one vote per premises is being made. If two owners of a unit vote by separate proxies or a proxy and ballot, only one proxy or ballot can be counted (usually the most recent).
Each homeowner, upon arrival, should be given an agenda and copies of any reports that will be discussed at the meeting, if available. Ballots and proxies are typically counted by the managing agent and/or election inspectors, who should persons not running for the Board. Ideally, results should be announced at the end of the meeting.
Appointing inspectors legitimizes the election.
Inspectors can be appointed from among the owners at the meeting. Typically three inspectors are selected. Inspectors should not have an interest in the election results (candidate, candidate’s spouse, current officers/directors). Inspectors should verify the election results by signing the tally sheets.
Board members may be elected to either one year or multi-year terms, as set forth in the governing documents. If elected for multi-year terms, the terms are usually staggered, which typically means that approximately 1/3 of the board members are elected each year. Make sure to keep a record of the terms given to each newly elected board member.
The new board should meet immediately after the annual election or soon thereafter to choose officers for the year.
If a quorum was not obtained, the board can appoint a new board member(s) to fill any vacancies. Those board members will serve until the next election in an HOA and until the end of the term in a condominium or co-op.
To conclude, be sure to check your governing documents, including your certificate of incorporation before every annual meeting. Check with your community attorney with any questions to make sure you are following the rules and voting in the proper manner. This will help avoid the possibility of future litigation.
