Proxies & Procedures Doing Board Elections Right

Proxies & Procedures

The candidates. The issues. The campaigns. Excitement and suspense are built into just about every election, including those of co-op and condo board members. In fact, those elections can stir even more emotion given the impact they may have on the daily lives of the residents casting the votes. Board member elections take place regularly and invite the participation of all who wish to help shape the future of the community in which they live. They present a chance each year for the voices of shareholders and unit owners to be heard.

“Under law, a building is required to hold an annual meeting to elect directors,” says Barry Mallin, principal of the law firm of Mallin & Cha, P.C., based in Manhattan. “Although not typical, it is permissible to elect directors with staggered terms of one to four years, as long as there is an annual meeting to elect directors of at least one class.”

This means, for example, that “instead of having all seven board members up for election at once, you would always have some sort of continuity on the board,” says Ronald A. Sher, founding partner of the law firm of Himmelfarb & Sher LLP, based in White Plains. One year, residents may elect four people for a two-year term and then the next year, elect three people for a two-year term, with the process alternating each year after that. This method ensures the presence of institutional memory as well as experience, potentially providing both continuity and more stability to the building or community.

Getting the Ducks in a Row

In order to make both residents and potential candidates aware that an election is on the horizon, the board is required to send out a notice of the annual meeting. “It must be sent no less than 10 days before and no more than 40 days in advance, pursuant to the specific provisions of the bylaws,” says Sher. “It must be a reasonable time period.”

The notice must be sent to all shareholders and unit owners and include information on the date, place and time of the meeting as well as the purpose, which in the case of an annual meeting will include the election of directors. The notice also must include a proxy form.

What is a proxy? “If a shareholder cannot attend the meeting, then a shareholder can appoint another person to vote for him or her at the meeting,” says Mallin. “The proxy authorization must be in writing and signed by the shareholder. It does not have to be notarized. The proxy must be submitted to the secretary or managing agent prior to the start of the meeting.”

There are several types of proxies, says Sher. The general proxy says “I appoint you as my proxy with the right to vote and voting decision-making power,” while a specific proxy says “this is how I want you to vote and please vote this way.” In addition, there are proxies just for quorum purposes only, which amounts to “don’t vote for me, just use this to reach a quorum.”

Early on in the process, the board also will encourage anyone interested in running for a seat on the board to make themselves known by submitting their name, resume and qualifications. They may also form a nominating committee to propose a slate of candidates or host a “meet the candidates” night to help unit owners and shareholders get to know the men and women in the running. It is recommended that candidates submit their names in advance so that it appears on a pre-printed ballot. Nominations may also be taken from the floor, unless prohibited by any amendment to the bylaws.

To not call an annual meeting and not elect directors would violate the bylaws and business corporation law. “It’s not proper governance,” says Sher. Although it is a rare occurrence, there can be times when a sponsor, for example, may attempt to bypass elections after his or her term on the board has concluded. It is not a good situation, one that brings inevitable trouble in the near- and long-term.

The process of holding an election can involve a lot of preparation by a lot of different people, including management, the board itself, attorneys, and accountants.

“Typically, the board delegates to the managing agent the responsibility of preparing the meeting notice, ballot and proxy forms, delivering them to the shareholders or unit owners and organizing the annual meeting,” says Mallin. “The board, however, as the representative of the shareholders or unit owners, bears the ultimate responsibility for assuring that the process is done correctly.”

Casting the Ballot

For an election to take place at the meeting, a quorum must be met. Before the meeting begins, the managing agent or accountant will conduct a roll call, usually by sign-in sheet. The attendees will receive their ballot at check-in or have their proxy checked. “In order to have the meeting, you have to have a quorum, usually consisting of 50.1 percent of unit owners or shareholders in person or by proxy,” says Sher.

Depending on the size of the building or what the specific situation is, the board may hire an outside firm to conduct the actual election itself. “In larger buildings and where there has been a history of contentious elections, it is not unusual for buildings to hire a professional election organization to conduct the process,” says Mallin.

That is what Brian Gittens and his Queens Village-based company The Voting Group, LLC, do on behalf of co-op and condo boards. And sometimes the hiring of an outside firm can even help motivate more residents to take part in the vote.

“It’s in the board’s interest to drum up the elections,” says Gittens, CEO and company founder. “If they pay an organization like ours to hold elections and no call is made to publicize the election, they might not meet their quorum and then have to do it all over again.” This adds extra cost and also extra time and effort on the part of all involved.

After being contracted by the board and meeting with directors and management, Gittens says his firm will conduct as much or as little of the election itself as requested. “There are times when they want us there from start to finish, which is best for certification because we know exactly what has happened,” he says.

The firm will also supply the physical means to vote. “Some boards want Internet voting or electronic machines or paper ballots,” Gittens says. “What they need, we’ll provide.” No matter the method, though, Gittens says “everyone still has to be mailed a paper ballot. It’s like an absentee ballot.”

On the night of the meeting, “we don’t run the meeting,” Gittens says. “We just make sure everyone has handed in a ballot, that everything is tallied correctly and the results are returned.” And those results are usually returned as quickly as possible, usually by the next day. Although extra time could be needed, should the board want an extra element of verification added to the process, such as the verification of all signatures.

Going Solo

Many buildings, though, manage and oversee their own elections rather than hire an outside firm. “The process varies from building to building, depending upon the size of the cooperative or condominium,” says Mallin. “Most buildings still use ballots filled in by hand and some provide for depositing of the completed ballots into a locked box.”

When it comes to tallying the votes, those are typically counted by the building’s attorney and managing agent. The board can designate an independent shareholder (or shareholders) and/or appoint the accountant and management agent, together with the attorney, to serve as an inspector of the election to determine the quorum, resolve any disputes and count the votes.

“As the attorney, we’ll monitor everything,” Sher says. “We’ll ask the candidates to step away and we’ll tabulate the ballots.” Inspectors of the election, whether it’s the building’s attorneys or other individuals selected to fill the role, all must sign an oath that guarantees, for example, that they will fairly and impartially perform their duties and keep confidential who voted for whom.

A Contentious Result

Although the majority of elections take place without a hitch, there can be occasions when candidates or voters are dissatisfied or skeptical over the results of the election. Sometimes that angst can be nipped in the bud very early. “I prefer to have election results available that night, because I don’t want anyone contesting their validity,” says Sher. And “if it’s a close election, we’ll do an internal recount, no matter what.”

“Shareholders aggrieved by an election may file a petition in the local State Supreme Court to contest the results. Although covered by a different governing statute, condominium unit owners possess similar rights to contest an election,” Mallin explains.

While the right to contest the election may exist, Gittens says it’s rare that disputes get that far. “You have 120 days to contest the election, but usually in that time, they talk to management and the attorney and the problem is handled before those three months have passed.” Although his firm will release results if ordered by a court, “we’ve never gotten that far.”

As with any election, once the results are in, most people embrace them. And, after all the ballot-counting, they then start preparing for next year’s election, ready to embrace the democratic process all over again.

Elizabeth Lent is a freelance writer and a frequent contributor to The Cooperator.

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  • Jack Leisenring, email: on Sunday, November 2, 2014 12:50 PM
    Our condo has an owners meeting in a week. We will vote to fill two board positions for a 3 year term. One owner who wants to be a board member, has done proxy hoarding. In addition he had the proxies sent to him and not to the association. Next he altered the proxy to reflect, "I vote for (person's name) fora board position". As board president I want to de-certify these proxies. Can I legally do that?
  • Is it illegal to have someone on the HOA board without having an election with the membership
  • Every year for our annual condo board election proxies go out 2-3 weeks before election with the same nominees/board members as the year before without inviting or encouraging other unit owners to nominate themselves. It almost seems like a fixed election with the same people elected every year. In a fair world proxies should not be issued until all nominees have been submitted and there should be a period in advance designated to allow any interested party to nominate themselves and accordingly be properly included in the proxies. Isn’t there any law / regulation that govern this process??
  • I've had a similar argument with my co-op board/management company for the longest time. We don't even get a slate of current board members, let alone the names of anyone who desires to run. We are told that we can put our names up for nomination either prior to or at the shareholder meeting itself. The attendance at the meetings is extremely poor which means that anyone who submitted a proxy would not know who any prospective new board members would be and, therefore, could not specify their choice of board members. In addition, the instructions that come with the proxy suggests the proxy be returned to the board president and/or the management agent. That means, these two are the ones who can actually vote control who is on the board. Our board has also asked brand new shareholders if they want to be on the board and, if they want to do that, they can be assured that the proxies will voted to elect them without anyone even knowing who they are because they've barely lived at the co-op. The last two meetings have not even had a quorum, so there have been no board elections at all. How's that for democracy?
  • NYC cooperative voting to pass budget. What is the percentage to pass a budget and financial report of shareholders needed. If cooperative have 650 units and 150 voted for and 59 against. Does the budget pass. Seems to me it is not the majority of units owned by shareholders and shouldn’t pass. Thanks