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 potentially 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 that their service will be valued, even if all residents don’t agree with every decision they make. Most associations have safeguards in place to indemnify 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..
According to attorney David J. Byrne, while associations are not required to have written election procedures, in New Jersey elections are strictly regulated.
Is there any legal obligation to provide members notice of an election? Byrne stated that notice of an election is typically governed by state law and/or the community’s governing documents, even the community association’s articles of incorporation. Both would include details such as the date, timeliness of the notice, and to some extent, even the content of it. He added that state law and/or the governing documents also dictate the frequency of elections for an association. The same applies for requiring annual meetings. Byrne said that an annual meeting is typically required, but again, it ultimately depends upon the state law and the governing documents.
In New Jersey, a community’s elections are heavily regulated by New Jersey’s Planned Real Estate Development Full Disclosure Act (PREDFDA). PREDFDA makes it clear that every association in New Jersey must handle its elections (not necessarily non-election related members’ meetings) in accordance with its governing documents that “do not conflict with” PREDFDA’s election-related provisions. “Interestingly,” Byrne said, “PREDFDA, in regards to a community’s elections, makes a distinction between associations of fewer than 50 units and associations consisting of 50 or more units.” PREDFDA governs associations with fewer than 50 units in regards to elections. However, Byrne said, its mandates and guidelines are more general, and “appear to recognize the need of associations with fewer than 50 units to be flexible in how they plan, notice and carry out their elections.”
Associations with 50 or more units must provide written notice to members no later than 30 days prior to the date for the mailing of the notice of the meeting that tells members that they have certain rights to nominate members to be candidates for election to the board. For such associations, PREDFDA also includes express instructions with regard to the notice of the actual election. According to Byrne, that “notice must be provided by personal delivery, mail, or electronic means.” He added that this notice must be provided “no less than 14 nor more than 60 days prior to the meeting at which” the election is scheduled. Furthermore, Byrne advised this notice must include “a proxy ballot and an absentee ballot,” unless prohibited by that community’s bylaws. If being mailed, notice is considered effective when deposited in the mailbox.
Byrne said that PREDFDA recognizes the relevance of various election-related activities that might take place electronically. An association consisting of 50 or more units can only send notice, according to Byrne, “by electronic means if either the particular member had already agreed in writing to accept notice by electronic means, or that association’s governing documents permit electronic notice.” Even if an association’s governing documents do so provide, said Byrne, “it must also ensure that another form of voting by absentee balloting or proxy voting is available.”
Can associations install term limits for their board members? According to Byrne, associations can install term limits for their board members if the bylaws and/or the declaration are amended to include term limitation. “If you have a set of bylaws that does not provide for term limits, but the owners want it to, the owners can amend the bylaws to impose term limits, and it would be legal.” Bylaws do not usually contain term limit provisions, but that doesn’t mean the bylaws can’t be amended to include such limits. With respect to associations with 50 or more units in New Jersey, regardless of a community’s governing documents, the term of a board member cannot be more than four (4) years. This, however, merely regulates the length of a term, not the number of terms that a person may serve.
Byrne explained that typically, the bylaws only list the qualifications one must have in order to serve as a board member. For example, the bylaws might say that in order to become a board member, an individual must be an owner of a home within the community. Byrne noted, however, with respect to associations of 50 or more units in New Jersey, that notwithstanding the contents of one’s governing documents, “only members in good standing can be a candidate for service on the board and, generally speaking, all members in good standing have a right to vote in every board election.” In addition, Byrne advised that New Jersey law now defines “good standing” as eligibility to vote in a board election, eligibility to vote to amend the bylaws and eligibility to both nominate or run for position on the board. According to Byrne, a member is in good standing if he “has paid all common expenses, late fees, interest on unpaid common expenses, legal fees and any lawfully assessed charges.” However, a member that may be current at that moment may still not be in “good standing” if he has failed to satisfy an outstanding association judgment. Also, and an interesting nuance per Byrne, a member is in “good standing” even though he may be delinquent “if he is in compliance with a payment plan or has a pending ADR process concerning that delinquency.”
What is the distinction between directors and officers? According to Byrne, officers are typically a subset of the board of directors. He explained that there are usually only a few officers. For example, on a seven-member board, there may only be three officers, such as a President, Vice President and Treasurer. “All officers are board members but not all board members are officers,” noted Byrne.
How is the nominating committee chosen and what is its role? “My experience is that most communities don’t have a nominating committee and that most communities simply solicit candidates through notices,” Byrne said. “The precise method of identifying candidates and whether there’s a nominating committee may be set forth in the state law or the governing documents,” he added. In fact, Byrne said, in New Jersey, when it comes to “associations with 50 or more units, the rights and obligations of members and those associations are set by PREDFDA.”
More specifically, in such associations, Byrne advised that the nomination and candidacy process is “pretty much set by law.” Regardless of what an association’s governing documents provide, Byrne said any member is empowered to nominate any member in “good standing,” whether it be the owner himself or another. Are nominations from the floor or ‘write-ins’ allowed? In New Jersey, the ballot connected with associations of 50 or more units must include space for “write-in candidates for as many seats as are up for election.” More recent PREDFDA regulations do not mention “floor nominations”. In fact, very strong arguments exist by which “any election procedure that allows for floor nominations may be improper.”
In other states, or with respect to New Jersey’s associations that are fewer than 50 units, associations may have flexibility as to nominations from the floor and/or ‘write-in candidates.’ In that regard, Byrne has generally counseled his clients to approach each situation carefully, and decide it on a case-by-case basis within its reasonable authority.
Can an association ban self-nomination? “Not in New Jersey,” Byrne said. Otherwise, according to Byrne, “a self-nominaton ban would depend on state law and the governing documents,” though he believes that a court, even aside from any law, would be very skeptical of associations banning self-nomination.
What is the procedure for a member who is not nominated by the nominating committee to be listed on the ballot? Byrne said that it depends on the situation of that particular association and whether such a thing is even permitted by that state’s law. “I don’t find nominating committees all that prevalent, but there may be specific things that flow from a law or governing documents that relate to that community. If you’re going to have a nominating committee, presumably there are provisions in the bylaws that talk more about that. If there aren’t, the board might have to do more analysis with regard to that,” Byrne said.
Can an association board endorse a single candidate or a slate of candidates? According to Byrne, an association and/or board disseminating material endorsing someone may be a bit sketchy, but he can’t say that it’s necessarily illegal. However, he added that in some states, such as New Jersey, an official association endorsement or ‘audit’ of the various candidacies has been ruled to be outside the bounds of the board’s authority. “Certainly, an individual board member on his or her behalf can do whatever he or she wants,” Byrne said.
Can associations adopt a rule that restricts certain people from becoming board members? Byrne said that, generally speaking, in order to enforce something like that, it would have to be made part of the bylaws or declaration. “I don’t think the board necessarily can vote to limit the type of person that can run for the board,” he said. New Jersey law expressly provides that an association’s bylaws may provide that “not more than one owner” or an “entity-owner representative” from “a single unit may serve on the [board]” simultaneously. However, Byrne added that situations could be taken on a case-by-case basis. For example, if a community had evidence that someone was stealing money, a court could validate a board’s decision, prohibiting that person from running. For New Jersey, PREDFDA regulations include a provision by which a board, without owner vote, can remove an existing member of the board “for good cause directly impacting the member’s ability to serve.” An association may be able to successfully argue that the provision can also be used to prospectively prohibit one form starting a board term.
Can an association request a background check on potential board members? “If the governing bylaws and declaration set forth qualifications to be on the board, without mentioning such a thing, the board likely does not have that power. Since a board may not be able to bar someone from running (whether following a background check or otherwise) unless the governing documents limit a person’s right to run background checks might be unreasonable,” Byrne explained. “However, if someone wants to perform a background check and use that in the world of democracy to influence people’s votes, that might be okay, on a case-by-case basis, especially if it didn’t come from the association itself,” he added.
How far can an association go in vetting applicants? “A board can go only as far as it’s allowed per the bylaws and the qualifications set forth therein” or “as far as the state’s law allows,” said Byrne. He noted that, if the bylaws specify that the only qualification to be on the board is that one must be an owner of a home within the community, then the association does not have the authority to vet anything other than a person’s status as a homeowner. Byrne added that in order to make it legal to vet candidates for other reasons, it may be acceptable to amend one’s bylaws to provide for that if state law doesn’t prohibit it.
During the actual campaigning phase of an election, do associations need to provide equal access to association media for candidates to campaign? According to Byrne, this is governed by the laws of each state. In New Jersey, he said, associations are required to do so.
If someone believes that a candidate is making false claims, can the association notify members of this? “The association doesn’t really have any powers to influence voters beyond what are set forth in the governing documents; however, people running for the board or their neighbors are almost free to say whatever they want to say,” said Byrne.
Can associations require members to register in order to vote in a board election? Byrne noted that most governing documents probably state that everyone who owns a unit and is in good standing can vote. He said that a board could require owners to register in order to vote if this stipulation is put into the bylaws. However, there is a lot of skepticism from courts, and appropriately so, Byrne said, regarding the ability of boards to regulate elections and to limit the democratic process. Byrne could not envision a scenario whereby an association could lawfully utilize voter registration fees as a way to generate additional revenue.
How does the ballot process work and what does it involve? According to Byrne, the ballot process differs from state to state and community to community. “There’s no set rule about it,” he said. “Presumably, a ballot has enough information on it so that the association can identify it and attach it to a particular home for proof that person had the right to vote.” In New Jersey, Byrne said associations with 50 or more units appear to be explicitly authorized to use “absentee ballots” unless prohibited by one’s bylaws. Furthermore, with respect to those associations in New Jersey, every ballot, said Byrne, “has to list the nominated candidates in alphabetical order by their last names.” Also in regard to those types of associations, ballots (whether paper or electronic) must contain every name of each person properly nominated to be a candidate. Lastly in this regard, Byrne advised that an association cannot “prevent a member from voting by electronic means once the board has decided to allow it and that particular member consents to it.”
Who has access to election results? Byrne said that there may be governing document provisions or statutes that address access to election results. “My view is that if a board wants ballots to be reviewed by owners, they can view them. If they don’t, they can’t. It’s at the board’s discretion,” he said. In New Jersey, an association should look to the state’s Non-Profit Corporations Act in this regard. In fact, according to Byrne, associations of 50 or more units are absolutely obligated to strictly adhere to that law’s requirements concerning the counting of ballots.
What’s the process for validating a proxy vote? According to Byrne, some states have no provision at all. “If it looks reliable, it’s good enough,” he said. However, there are some states that limit proxy voting and make it more difficult to establish a valid proxy. He said that, in his view, New Jersey is one of the states that empowers people to use proxies for voting. Byrne also said that any proxy used by any association in New Jersey “has to have a prominent notice stating that proxy use is voluntary, that a proxy can be revoked at any time before the holder of the proxy votes and that the absentee ballots are available to the member.” Furthermore, according to Byrne, no New Jersey community can use proxies for a board election without also having absentee ballots available.
To illustrate cumulative voting, Byrne gave an example: “Let’s say you have three seats open and every home has one vote per home. Instead of casting three separate votes, with cumulative voting, you’re able to cast your three votes for one person. You’re able to put your votes together,” he explained. State law may regulate or otherwise prohibit such voting.
When an election results in a tie, how should the association proceed? According to Byrne, it depends. The board would have to come up with some reasonable way to determine a winner. “You’re not typically going to find something that governs that ahead of time. It’s going to be more of trying to figure out what’s best once you find yourself in that situation,” said Byrne.
What’s the process for an election challenge or recount? There really isn’t any set process, Byrne explained. He did say, though, that New Jersey law specifically addresses the ability of members of an association to have elections reviewed and challenged.
What is the role of an election inspector, and who typically would qualify for this role? According to Byrne, in New Jersey, inspectors are empowered to decide all questions pertaining to the election (i.e. eligibility to vote, results, the election process, etc.). With regard to who qualifies for the position, Byrne said there really are no requirements, but presumably the person should not be a candidate or related to any of the candidates.