The proper procedures for electing the directors of a homeowners association are frequently misunderstood and disregarded. Understandably, this can lead to disputes concerning the results of the election and costly litigation that could have been avoided. One area that is often overlooked (or completely disregarded) pertains to the use of an Inspector of Elections to oversee the election of the associations directors.
State laws and/or an associations governing documents (typically the bylaws) may contain provisions that require the selection of either one or three independent third parties to serve as the Inspector(s) of Elections in order to insure the secrecy and proper handling of ballots that are circulated, collected, and tabulated and the election is conducted in a fair and impartial manner that is in conformity with the applicable laws and the associations governing documents. Statutes and bylaws provisions pertaining to the Inspector(s) of Elections commonly provide that an independent third party includes: (i) volunteer poll workers for the county in which the association is located; (ii) licensed accountants; (iii) notary publics; (iv) members of the association who are not candidates for the election or relatives of candidates for the election; or (v) persons that are employed or provide compensable services to the association pursuant to a contract unless they are expressly authorized in accordance with the associations election rules.
The responsibilities of the Inspector(s) of Elections typically include:
a. Determining the number of memberships that are in good standing and entitled to vote and their voting power;
b. Determining the authenticity, validity, and effect of proxies;
c. Determining the existence of a quorum for conducting the election;
d. Serve as the designated recipient of ballots;
e. Retain custody of ballots until votes have been tabulated and the time for challenging the election expires;
f. Hear and determine challenges and questions arising out of or in connection with the right to vote;
g. Determine when the voting polls close;
h. Count and tabulate votes and determine the tabulated results of the election;
I. In the event of a recount or other challenge to the election, make the ballots available for review by members or their authorized representatives;
j. Perform such other acts as may be proper to conduct the election fairly in accordance with applicable laws and the associations governing documents.
The ramifications of an improperly conducted election can be extremely costly to associations. To minimize the risks of an election being challenged, before scheduling an annual meeting at which the associations directors for the next year will be elected, an associations board should review applicable state laws and all provisions contained in their governing documents that pertain to the procedures for conducting those elections. If there are provisions that mandate the use of an Inspector(s) of Elections, those provisions should be complied with. Even in the absence of a law or provisions in the associations governing documents that mandate the use of an Inspector of Elections, it is a good practice for associations to designate an independent third party to serve in that capacity for its annual meeting so long as doing so would not be in conflict with existing provisions in the associations governing documents. Uncertainties should be resolved by consultation with the associations legal counsel sufficiently in advance of the time required for providing notice of the annual meeting and ballots to the members.