HOA Voting Representatives: the Undelegates
By Deborah Goonan
After the Developer-control phase, HOAs are supposed to have an annual meeting for the purposes of electing Board members with terms expiring that year.
Most governing documents specify a quorum requirement for the annual meeting, usually 20-30% of the entire membership. It is the Board’s job (with the assistance of the manager, if there is one), to issue announcements, distribute information in advance about candidates or important proposals requiring a membership vote, and generate sufficient interest in attending the meeting. Depending on state law where you live, for members who cannot attend the meeting, proxies or absentee ballots can be used to meet quorum requirements.
Smaller HOAs may find it easier to attain a quorum, compared to larger HOAs of several hundred to several thousand members. At least, that’s been the conventional wisdom. These days, with email, the Internet, social media, and automated text messaging, it is easier than ever before to reach out to members, no matter where they may be.
Nevertheless, HOA discussion forums are replete with HOA Managers and some Board members lamenting that there is so much apathy that they can’t seem to attain a quorum for the annual meeting, let alone meet the super majority threshold needed to affirmatively approve amendments to the Declarations. Now, of course, sometimes there are rather obvious reasons why the quorum is not attained: the date and time of the meeting is inconvenient, announcements are made at the last minute or not at all, notices are posted in ways that are not easily visible.
For example, my own HOA was fond of holding the annual meeting at 8 AM on a Mondaymorning. Friends and colleagues have told me their annual meetings are scheduled for the day before Thanksgiving or Christmas, or at times of the year when most members are out of town. Our meeting announcements were posted at the guard gates, on 8 ½ x 11 paper, in font so small it could barely be read at all without driving right up to the sign, and stopping the car to read it. Other HOAs might not announce the meeting until a day or two beforehand.
Even in HOAs that make a sincere effort to announce the meeting well in advance, and arrange for a relatively convenient meeting time and place, it might still be challenging to get enough members to attend, either in person or by proxy, or to submit the absentee ballot.
Challenging is not impossible, but many larger HOAs are intentionally set up to circumvent the challenge of achieving quorum by creating a Voting Member Council or a Representative Voting system. Quite often, members are not aware of this arrangement. Here’s how it works.
Let’s say your HOA has 750 homes, with one vote allocated to each parcel. If there is a 30% quorum for the annual election meeting, that means 225 members must either personally attend the annual meeting, or submit a proxy or absentee ballot (depending on your state law requirements) in advance of the meeting. If only 190 members participate, there can be no valid election.
Likewise, if your HOA wanted to amend the CC&Rs with regard to rental restrictions, and your governing documents require a two-thirds affirmative vote to approve the amendment, there would have to be 500 votes in favor to pass the amendment. The system is set up this way so that the only way changes can be made is if there is a substantial amount of support for it.
However, in larger HOAs, membership will usually be divided into several smaller neighborhoods – or even sub-Associations (HOAs within a Master HOA) – each represented by one Voting Member. The Voting Member is, in effect, a proxy holder for all members within the neighborhood or sub-Association.
So the HOA of 750 homes might have 5 neighborhoods broken down as follows:
1) N1 – 200
2) N2 – 150
3) N3 – 160
4) N4 – 190
5) N5 – 50
Notice that the number of homes in each neighborhood is unequal. Likewise, the voting interests of each Voting Member are unequal. Clearly, Neighborhood 1 has the highest number of votes, and Neighborhood 5 has the least number of votes.
Keep in mind that each Voting Member casts his or her voting interests (the total number of homes in each Neighborhood) without any requirement to obtain limited proxies or directed votes on any matter. You will hear some “experts” compare this system to our Electoral College system of Delegates. But state Delegates generally cast their votes based upon real votes cast by citizens at the polls! The Delegate doesn’t merely make the decision for all the registered voters of their state. That’s why I call these Voting Members UN-Delegates.
Generally, members within each neighborhood select their Voting Member and an Alternate. The selection process can range from a separate formal election (in the case of a true sub-Association with a separate HOA), or no formal process at all. There might only be one willing volunteer, and perhaps a second person willing to serve as the Alternate Voting Member. If three or more candidates exist, and the governing documents are silent on the process of selection, the Manager might simply mail a ballot and instruct the members of the neighborhood to return it to the Management Office. But if those ballots are not handled properly, or not counted at an open meeting, members may be left wondering how their Voting Member was actually chosen.
To muddle the process even further, the Voting Member Council is granted sole authority to vote on certain issues affecting the community. Those issues could include, for example: approving annual budget increases of more than the maximum threshold allowed (perhaps 10 0r 15% higher than the previous year), approving non-emergency repairs and renovations to common property such as a clubhouse or pool, or voting to initiate a construction defect lawsuit against the Developer. I once lived in an HOA that granted the Voting Member Council sole authority to elect the Board of Directors and amend the governing documents. Some HOAs prohibit Board Members from serving concurrently as Voting Members, but my HOA did NOT prohibit this practice, even though it could be considered a serious conflict of interest. Six of the nine Board members, at the time, were also serving as Voting Members of their Neighborhood Districts. Surprisingly, HOA Statutes are often silent on this issue, so there is plenty of opportunity for tyranny.
Buyers don’t often consider the political organization and voting structure of their HOAs before they purchase. As a homeowner, you should read your By Laws and Declaration of CC&Rs carefully to determine the extent of your voting rights.