Cultivating, nominating and electing board members is something that should always be on the minds of current board members
Politics in any arena can be tricky, but in associations it can also sometimes be difficult to find people willing to serve. Many people feel unqualified or even afraid to volunteer due to fears of being taunted by potential disgruntled residents. While these fears are not wholly unfounded, current board members should encourage volunteerism by running fair elections, showing that residents with different types of views and knowledge are needed and desired, and letting potential candidates know their service will be valued, even if all residents don’t agree with every decision they make. Most associations have safeguards in place indemnifying board members from potential liability, so if a resident has the time and desire to serve, they shouldn’t be afraid to run for the board.
There is no statutory requirement for associations to have written election procedures. Guerra pointed out that in Michigan, since these associations are mainly nonprofit corporations, if you don’t have election procedures in your documents (which is rare), you will find enough in the Nonprofit Corporation Act to have an election.
Is there a legal obligation to provide notice of an election? Guerra noted that every association meeting, such as one for elections, must have a notification . There are also time-frames specified for association meeting notices. “The Michigan Nonprofit Corporation Act specifies that the notice must be sent at least ten days and not more than sixty days prior to the meeting,” he said.
The frequency of these elections depends on the circumstances of each association. However, Guerra said that in Michigan, associations are required to have an annual meeting of the membership of an association. “How many board members must be elected, if any, depends on whether there are any open positions,” he said. It is typically stated in the governing documents when an association’s annual meeting should take place each year and whether the change in board members should be staggered. “These are all matters typically addressed by the governing documents, although there are provisions in Michigan’s Nonprofit Corporation Act that address annual meeting timing and that can be used if the governing documents fail to do so.”
Can an association install term limits for board members? “Yes,” said Guerra, “but I typically recommend against term limits.” Guerra pointed out the fact that term limits basically limit the talent pool stepping up to the board. These are volunteers who offer their time to the association, and not everyone is willing to serve. So if you term-limit those willing to serve, who will succeed these willing co-owners?
\In an election, those being voted into positions are directors of the board. Note the distinction between directors and officers:
Directors: When you’re talking about nonprofit corporations, which most associations are, directors are generally elected by members of the association. They are vested with the power and authority to direct the corporate affairs of the association.
Officers: Officers are generally appointed by the board of directors, and they have jobs to do, but they don’t have a vote at the board meetings. In most cases officers are directors as well, but legally they have different rights and responsibilities depending on whether they are acting as directors or officers.
When in pursuit of new board members, how is the nominating committee chosen? Many documents specifically indicate what the composition of the nominating committee will be, and in other documents there is no direction whatsoever. There is no requirement in Michigan to have a nominating committee. “Some documents contain provisions relating to a nominating committee, and in most cases a nominating committee is going to be appointed by the board, with the board having the discretion as to who they choose for the nominating committee,” said Guerra.
Are nominations from the floor allowed? In many cases you’ll have a nominating committee but you’ll still also allow nominations from the floor or nominations by self-submittal. “Unless specifically prohibited by the governing documents, nominations from the floor must be permitted, and it is fairly easy to be nominated from the floor, and individuals can simply nominate themselves or have one of their friends nominate them,” he said. However, some associations have provisions in their documents that call for a closed slate prior to the time of the meeting and no nominating at the meeting. “In those cases, if an individual hasn’t submitted their nomination to the nominating committee or they are not otherwise chosen by the nominating committee, the individual is simply not going to be allowed to run,” he said. Basically, this issue is document-specific.
Can an association board endorse a slate of candidates or a single candidate? “Yes, and it does happen,” says Guerra. He said that doing this carries some implications. “If the board is popular and endorses a candidate, the candidate will likely get elected. If the board is unpopular and they endorse a candidate, the candidate will likewise probably not get elected,” he pointed out.
Can an association adopt a rule that restricts people from becoming board members? “Yes,” Guerra said, “but again, it’s discussed throughout these chapters, the regulation must be reasonableFor instance, you can’t discriminate against or disenfranchise certain groups of people.” What you can do is have a rule that states that someone who has been convicted of a crime that involves dishonesty or lack of integrity in the handling of money can’t serve on the board. It becomes a little more questionable when you have an association that wants to adopt a rule, for example, stating that only resident owners and no investor owners can hold a position on the board. “This is unreasonable because you are prohibiting non-resident owners even though non-resident ownership is allowed,” he said.
Can an association request a background check on potential board members? Generally, I would avoid such investigations because it essentially entails existing board members running checks on other people who perhaps may be challengers,” he said. There is also the question of what is done with the information obtained in a background check. “The board is not a police forceand could end up having liability potentially for defamation or for handling the information incorrectly,” Guerra said.
During the campaigning phase of the election, do associations need to provide access to association media for candidates to campaign?
Guerra does not recommend allowing campaigning through these resources. “Arguably, once you let one person campaign thorough association resources, you have to allow everybody to do so,” he said. That can get quite expensive and burdensome.
Does an association need to require residents to register in a board election? Most associations do since it needs to be established who the owners of the property are. “Most of these organizations require ownership of property in order to be a member,” said Guerra.
The ballot process depends on the governing documents of a particular association. Directors are usually elected at the annual meeting of the association, and it is noticed ahead of time.
Generally, the ballot process involves the following:
• announcing candidates
• taking nominations from the floor
• closing nominations
• appointing inspectors
• hearing from the candidates
• collecting the votes
• having the votes tallied by the inspectors of the election
• announcing the results
Guerra explained that ballots are not recorded — meaning they’re not in the public record. They are on a tally sheet, and an association can either keep the ballots themselves, or they can destroy them in lieu of the tally sheet. “That’s up to the individual corporate practice,” he said.
Who has access to election results? “In nonprofit corporations, which include most homeowner and condominium associations, the association’s members have the right to inspect the association’s records under procedures outlined in the nonprofit corporation act and in the association’s policies for requesting the same,” said Guerra. “Upon appropriate request, that would be a record of the association that somebody would be entitled to view.”
For those unable to attend the election, what is the process of establishing a proxy vote? According to Guerra, proxies are permitted unless the governing documents provide otherwise. The documents may state a limitation on the use of proxies, which is valid. Otherwise proxies are generally available. A proxy needs to have certain legal requirements met. “It has to designate who the vote is being given to, for what it is being allowed to be used, and it has to be signed or transmitted by the member authorized to give away the vote ,” said Guerra.
He also said that proxies can be either general or specific. “Quite often, general proxies are utilized in elections where you have nominations from the floor at the time of the meeting,” he said. Specific proxies are instead typically utilized when the vote is for something that can be established ahead of time, such as a vote for an amendment of the documents. The specific proxy would specify how the proxy holder must vote.
To illustrate the definition of cumulative voting, Guerra gave an example. “You have 3 open positions on the board, and you have 3 candidates for those 3 positions. Everybody has the right to cast 3 votes, one each for the open position. That is non-cumulative voting. If the association permitted cumulative voting, each person would be allowed 3 votes and would be able to give all 3 of those votes to one candidate .
Once the voting is complete, it is the role of an election inspector to count and tally the ballots and certify the result. “These volunteers are often appointed at the meeting and consist of members who are neither running for the board nor related to someone that is running for the board,” said Guerra.
How should the association proceed if the election results in a tie? Guerra suggested, if this happens, you should first ask the parties who are tied if one is willing to withdraw. “If they do, that resolves the problem, if not, you can revote,” he said.
What is the process for an election challenge or recount? Guerra said the challenger would need to raise the challenge at the meeting to preserve the challenge. If the challenge is not raised at the meeting, it is arguably forever lost. If properly challenged, a recount typically requires a majority of the membership present at the meeting to approve a recount. .