Sunday, January 29, 2012

Association Elections in a Nutshell

As I write this, I am preparing to perform one of my legal functions in representing community associations, attendance at an annual meeting to act as chairperson.  This role often arises due to animosity between the owners who are running the Association and the owners who despise the owners running the Association.  My presence is usually calming and as I live and die by Roberts Rules of order, I am usually successful in keeping the meeting from degenerating and also keeping the meeting on point, which is the election of a new Board of Directors.

Traditionally, elections for Associations followed the corporate model.  Remember, at their core, Associations are a type of Florida corporation, operating pursuant to Chapter 617 Florida Statutes, the Corporations Not for Profit Act.  In fact, for many years, the extra rules governing homeowners associations were actually placed within Chapter 617 before getting their own separate Act.
Under the corporate model, members vote to elect directors at the annual meeting.  The vote can be made in person or by proxy, and nominations for seats on the board can be made from the floor at the meeting.  This method was utilized for years by all Associations, but issues frequently arose resulting in changes to how voting is conducted by both Homeowners and Condominium Associations.

For HOAs, the basic procedure remains unchanged but several specific requirements have been adopted to control the election process.  Proxy voting is still permitted, but the proxy must be in a specific minimum format and is only valid for 90 days.  Floor nominations are still allowed, and individuals can nominate themselves.  All owners are permitted to serve unless they are either (i) more than ninety days delinquent on their assessments; or (ii) if they have been convicted of a felony (unless their civil rights have been restored for at least five years).

Dispute resolution in HOA elections is controlled by the Condominium Act Mandatory Nonbinding Arbitration rules.  These same rules apply to Condominium Election disputes as well.  In theory, to help owners resolve disputes inexpensively, the owner (or Association) can file for arbitration with the Division of Florida Condominiums, pay a fee of $50.00 and have the election dispute arbitrated by a Division attorney.  If the matter is not resolved, then the aggrieved party may file suit to resolve the dispute.

Elections for Condominiums have evolved to require a much more specific procedure that substantially changes the original corporate model.  The new procedure eliminates proxy voting and floor nominations, moving to secret balloting in advance of or at the meeting.  Each Condominium is required to send multiple notices to comply with the new procedure.  The First Notice must be sent at least sixty days prior to the annual meeting, and advise all unit owners of the date and place of the annual meeting and further advise that any owner wanting to run must submit written notice of intent to run at least forty days prior to the annual meeting.  Furthermore, a candidate may also submit an information sheet on one letter sized page to the Association for submission with the second notice (this information sheet is due thirty-five days prior to the election).

The Association then must mail a second notice of election, no earlier than thirty four days and no later than fourteen days of the annual meeting.  A ballot listing all candidates in alphabetical surname order shall be included, along with a ballot envelope, and a return envelope larger than the ballot envelope.  The ballot should be placed in the ballot envelope, then sealed in the return envelope which should have the name, unit number and signature of the owner.  This envelope can be mailed or hand delivered to the Association.
At the annual meeting additional ballots shall be made available to eligible owners who have not voted.  The same dual envelope procedure shall be followed.   A quorum is not required for balloting, but at least twenty percent of the owners must submit ballots for the election to be valid. These should be collected and placed with the other ballots received and an impartial committee should proceed to count all votes.  Ballots that fail to follow the aforementioned requirements shall be deemed disregarded and not count.

As with HOA elections, owners are permitted to serve unless they are either (i) more than ninety days delinquent on their assessments; or (ii) if they have been convicted of a felony (unless their civil rights have been restored for at least five years).  Disputes are handled in the same manner as described above.  All elections are by plurality of the vote and ties shall be handled by a separate runoff election.  Despite these strict guidelines, disputes and fights frequently occur, making Condominium election meetings a sometimes trying experience.