It must be that time again. The familiar buzz is in the air about the upcoming election. We’re not talking about Republicans and Democrats, but your association’s own exercise in the democratic process: The election of the members of the Board of Directors of condominium and homeowners associations throughout Georgia. While your community’s elections hopefully are not as contentious as its governmental counterparts, the process can probably be as involved and confusing, especially because it is up to the members of the community to administer the whole election process. For this reason, it is best to acquaint, or reacquaint yourself with the proper procedures to be followed in your community before the fact and learn the who, what, where, when and how of your community’s elective process: Who can serve on behalf of the Association? What is the significance of each vote? Where can I cast my vote? When is a position open for election? How can a vacancy be filled?
Commonly, mandatory membership community associations are organized under Georgia law as corporations. Indeed, condominium association and homeowners associations subject to the Georgia Property Owners’ Association Act are required by statute to incorporate. Although the applicable statutes allow for an association to form either as a for profit or a nonprofit corporation, most incorporated community associations will form as nonprofit entities to be governed by the provisions of the Georgia Nonprofit Corporation Code, O.C.G.A. § 14-3-101, et seq. (the “Code”), and this discussion will presume that your Association has been so established. Although the Code contains provisions addressing the election and terms of members of the Board, it often defers to applicable provisions included in an association’s governing documents—the Articles of Incorporation, Bylaws, Declaration of Restrictive Covenants or Declaration of Condominium, and other pertinent documents. Similarly, the Code contains various provisions concerning the appointment of officers of an Association; however, the Code allows that many of the specifics concerning such officers are as described in the governing documents. While the Code mandates each Association which is a nonprofit corporation to have a board of directors to conduct the business and affairs of an Association, it also says that each Association “has the officers described in its articles or bylaws or appointed by the board of directors in accordance with the articles or bylaws.” In general, the Board of Directors of an Association is the decisions makers, and the officers of an Association – such as a president, secretary and treasurer – put the Board’s decisions into action. Commonly, an Association’s annual elections involve the selection of members to the Board of Directors, which, in turn, selects the officers. However, some Bylaws provide for election of each officer in the same manner as the directors. Thus, while the Code can be instrumental in your understanding of the workings of your community, the governing documents of your Association are invaluable with regard to shedding light on issues concerning the elections of directors to the Board and the appointment of officers of your Association.
“Who can serve on behalf of the Association?”
The Code contains very few impediments to eligibility of a corporation’s directors: essentially a director must be a living, cognizant human who is at least 18 years old. Despite the loose qualifications set out in the Code, your community’s governing documents may set stricter qualifications on its Board members. For instance, many but not all communities’ documents provide that that in order to serve as a director of the Association, an individual must be a member of the Association. In such case, because the directors live in the community that they are charged with administering, they have a vested interest in their work on the Board and achieving the best interests of the community. Thus, if a director moves from the neighborhood, she becomes ineligible for service on the Board.
Similarly, the Code does not have much to say concerning the eligibility of an Association’s officers. An Association “has the officers described in its articles or bylaws or appointed by the board of directors in accordance with the articles or bylaws.” Also according to the Code, the same individual may hold more than one office at a time, unless the Articles or Bylaws provide otherwise. Variations to the Code’s “anything goes” stance are fleshed out in the provisions of an Association’s governing documents. For instance, such documents may provide that certain offices, such as that of the president or the treasurer, must be filled from among the members of the Board. But keep in mind that in some communities officers do not have to be Board Members. In addition, some documents provide that Association members who are delinquent on the Association accounts or otherwise in violation of the governing community documents cannot serve in certain Association offices.
When preparing for elections in your community, check the governing documents of your Association to be sure that the individuals who intend to serve on behalf of the Association are eligible to do so.
“What does each vote count to?”
Unless otherwise provided by the governing documents, directors are elected by a majority of the votes cast by the members entitled to vote in the election. How does a majority block come together though? While this may seem like an easily answerable question, a majority of the voting power is not necessarily the same as a majority of the owners in your community. For example, some condominium documents, because of the variation in size among the units, provide that owners are entitled to weighted votes based on the square footage of their unit. Thus, a majority of the voting power may be more (or less) than a majority of the owners.
In addition, the election of directors may be through straight voting or cumulative voting scheme. While most Associations operate on a straight voting scheme, where members are allowed a single vote to be cast for a director and the director with the most votes wins, the governing documents may provide for election of directors by cumulative voting, whereby a member may cast votes in an amount equal to the product of the number of votes to which that member is entitled multiplied by the number of directors for whom the member is entitled to vote. The member voting in a cumulative system may cast all her votes for a single candidate or may distribute the votes among all eligible candidates.
Furthermore, some members may be ineligible to cast their votes. Many community documents provide that membership privileges, including the right to vote, may be temporarily suspended if an owner is delinquent on the Association accounts or for infractions of the community’s covenants or rules and regulations.
When tallying votes after an election, check the governing documents of your Association to be sure that each vote was cast by a member who is eligible to cast the vote and that weight of each vote cast is properly considered.
“Where can I cast my vote?”
While when most people think of Association elections they think of filing into the clubhouse or other meeting hall at the annual meeting, hearing out the candidates and marking an “X” on a ballot, the casting of votes is not necessarily tied to a specific place or specific time. For instance, members may designate a proxy to attend the Association meeting in their stead and cast a vote on their behalf. In addition, under the Code and many communities’ governing documents, members of an Association may take any action by written ballot or consent outside of an Association meeting as they could in an Association meeting. Furthermore, recent amendments to the Code provide for certain actions to be taken by electronic transmission such as facsimile or electronic mail. Thus, voting in your community may no longer necessitate attending Association meetings. These various manners in which votes may be cast may make Association elections more accessible to members of your community by providing readily available approach to participation and, thereby, increasing interest in the governance of your community.
When preparing for your community’s elections, check the governing documents of your Association to determine the various methods available to your community by which members may cast votes.
“When is a position open for election”?
In homeowner-controlled community Associations, unless otherwise provided in the governing documents, directors are elected by the membership at each annual meeting; each director serves one year and can be elected for successive terms. Thus, under the Code, if everything goes as planned, all directors on the Board are up for election each year at the Association’s annual meeting. In reality, however, Board members may serve staggered terms which are more than a year long. Similarly, the term of officers in your Association is defined in your community’s governing documents: some documents set out a one year term and some are silent on the issue. Regardless of the term set out, the Code and most governing documents provide that the officers of the Association serve at the pleasure of the Board and can be removed by the Board at any time.
When preparing for your community’s elections, check the governing documents of your Association to determine which positions are open for election.
“How can a vacancy be filled?”
Vacancies occur on Boards for many reasons: of course, a director may have served a full term and now that position is up for election. Further, a director may move out of the community and become ineligible to serve on the Board, may lose interest and resign, or may be removed by the other directors or the membership pursuant to the governing documents of the community. Under the Code, members of an Association may fill some vacancies on the Board of Directors unless the Articles or the Bylaws say otherwise. Thus, a vote on the open position could occur at a meeting of the members. However, many documents provide that vacancies may be filled by the remaining directors on the Board. In fact, many governing documents provide that only the Board may fill a mid-term vacancy. With regard to vacancies of the offices of the Association, many governing documents provide that officers of an Association are to be chosen by the Board of Directors and the Board has the sole authority to fill any vacancies. Thus, the members may not have a direct choice with regard to who serves as an officer of the Association.
When an office or a seat on your community’s Board comes open, check the governing documents of your Association to determine how that vacancy may be filled.
While election time for a community association is often a time of change it does not need to be unmanageable or mystifying to the members or to those individuals in charge of coordinating the voting process. Many communities are governed by documents which set clear parameters regarding the election process; and where a framework is not clearly laid out, many Associations can look to the Code as a guide. You may want to ask you legal advisor how your community can stage its elections and whether the proposed course is allowable under your community’s governing documents. As your Association winds up for this election season, take time to renew your acquaintance with the governing documents of your community and the who, what, why and how of the election process before the members start filling out their ballots, and you won’t be caught flipping through your Bylaws on election night!