Director elections are one of the most important powers association members have, so it makes sense that owners take elections seriously. Whether voting in an election and/or running for the board, the process and its results are personal to association members. Therefore, any appearance of impropriety or error in the process is oftentimes met with objection, suspicion, and unfortunately, hostility.
To avoid the above consequences, associations should do everything they can to ensure the election process, and documents used, are correct and in compliance with their governing documents and Colorado law. This Article will discuss five common mistakes when it comes to elections and how to avoid them.
- Failure to Use Secret Ballots
A secret ballot is a ballot that contains no recognizable marks allowing someone to identify the voter. Regardless of anything contained in an association’s governing documents, Colorado law requires the use of secret ballots in two instances: 1) contested elections, and 2) if request by 20% of the owners in attendance at a meeting.
A contested election is simply an election where there are more candidates than open board positions. Sometimes, owners attend an annual meeting where there is no contested election to begin with, but because nominations are made from the floor, the election becomes contested and secret ballots must be used. This means an association must always be ready for this situation and have secret ballots on hand during a physical meeting.
If the election is being conducted using the mail ballot process, instead of holding a meeting, secret ballots must be used regardless of whether the election is contested. The reason for using a secret ballot is because the ballot must contain blanks to allow for write-in of candidates, and should a candidate be written in, the election will immediately become contested. As a result, all mail ballot elections must be sent out using the double-envelope system.
- Not Letting Eligible Persons Run for the Board
Sometimes an owner puts his/her/their name in the election hat to run for the Board, but is advised that such owner is not eligible to run because he/she/they are not an owner or is delinquent, or is in violation of the governing documents, etc. Although these may be legitimate board qualifications, it is imperative that the board review its governing documents (typically, the bylaws) to determine what qualifications are actually required before denying candidates an opportunity to run.
Colorado law merely requires directors to be “individuals” to serve on boards—there are no requirements for ownership, good standing, or the like. Therefore, any director qualifications beyond being an individual, must be contained in the governing documents. Therefore, it is imperative to review such documents to determine whether to allow a candidate to run for the board.
Furthermore, even if a candidate does not meet all the director qualifications set forth in the governing documents, it is important to let such individual know of the shortfalls and allow such person to correct them prior to the election so they may be included on the ballot.
- Improper Voting During Virtual Meetings
Many associations continue to utilize virtual formats for their annual meetings and this format works well for them. However, there are several differences between physical and virtual meetings when it comes to elections and associations must be aware of, and prepared to address, these issues. This is best accomplished by adopting a virtual meeting policy, which sets forth the steps to be taken when meetings are conducted virtually.
Unless an association has invested in a virtual meeting platform that allows for secret ballot voting, it will not be able to elect directors during the meeting if the election is contested. Simply put, there is no way to conduct a secret ballot election during a virtual meeting if the meeting platform is not capable of allowing owners to vote, tracking the vote without identifying the owner, ensuring each owner only votes once, and being able to print out unmarked ballots should this become required.
Associations that do not utilize these types of platforms, are typically forced to conduct their elections using the mail ballot process. Therefore, it is important to know ahead of time whether the platform your community utilizes is capable of secret balloting and if not, to let owners know ahead of time that contested elections will be conducted using the mail ballot process.
- Failure to Comply with Statutory Requirements when Using Mail Ballot Process
In the event your community utilizes the mail ballot process when it comes to elections, it is important to understand that such process is heavily regulated by Colorado law and has some very specific requirements that must be complied with. For this reason, we recommend associations work with their legal counsel to prepare the necessary documents for conducting a mail ballot election, or any other mail ballot vote.
- Using Absentee Ballots During Annual Meeting and/or Using Proxies During Mail Ballot Vote
One of the hardest concepts to accept is that absentee/mail ballots are mutually exclusive with meetings and proxies. In other words, if an association is holding a meeting (physical or virtual), it cannot use mail ballots or absentee ballots, but it can, and should, use proxies. By the same token, if the community is conducting its election by mail ballot, proxies may not be used.
Proxies are only utilized during meetings (physical or virtual) when members are unable to attend but want to participate nonetheless. A proxy designates another individual to step into the shoes of the proxy-issuing owner and attend the meeting in such person’s place. Pursuant to Colorado law, an owner is deemed present at a meeting if such owner issues a proxy to an individual who actually attends the meeting. Proxies may be issued to count towards quorum only, or proxies may allow the proxyholders to vote on agenda items, including elections. A proxy is not a ballot and the proxyholder must be provided with a physical ballot in exchange for the proxy at the meeting.
On the other side, an action by written ballot may only be performed outside of a meeting, and this process does not allow for the use of proxies because each owner has the ability to “participate” by casting his/her/their ballot during the allotted voting period. Therefore, proxies are neither necessary, nor permitted when votes occur using the mail ballot process.
Based on the above, make sure you do not confuse these documents during elections and only utilize proxies when meetings are held, and do not utilize proxies when mail ballot voting is being conducted.
If you have questions or would like additional information concerning director elections, please reach out to an Altitude attorney at 303.432.9999 or [email protected].