« Holding Onto Election Materials in HOAs - Challenges to Elections - What's the Limit? | Main | Who Gets to Call the Attorney for the Association in an HOA? »
September 15, 2006
Are Proxies Overrated? More To Think About ...
SB 1560 is still as of today, to the best of my knowledge, sitting on the Governor of California's desk - waiting to be signed. Everyone worked on this clean up legislation diligently since it was discovered the new elections law was a disaster waiting to happen (last year sometime) and now we sit and wait for the Gov to come through.
Lots of people think this clean up legislation will be the saving grace for associations and end the proxy wars, because ...
The good news is that under SB 1560, if/when it is signed, the ballots returned to an association will count toward the quorum for any election and achieving quorum so as to hold the controlling votes has been the most widespread purpose of proxy wars in the past. Even without the interest needed to generate a "proxy war", many an association was saved by sending out yearly proxies, asking owners to sign in case they could not attend the annual meeting, and keeping them on file.
So now, can we rejoice that proxies will no longer be necessary to have an election, especially for the Board?
Don't jump up and down too fast.
If you eliminate proxies, what are you going to do if an owner wants to give the proxy to another to vote at a time when the ballot packages are not yet ready (such as leaving the country or state for a job or to take care of a sick relative). Some of us have been pushing retraining owners to hand over the ballot packages (after validating them, which includes signing the outer envelope) as a means of allowing owners to let someone else vote on their behalf if they do not want to lodge their own vote. That works, as long as their is a ballot package to hand over.
What if you are holding the election for directors without tying it to the annual meeting (because neither your documents nor the law says you have to have a meeting). Then, you may establish a quorum for the election (if you are lucky) but not for any separate annual meeting you still intended to have, and at which you intended to vote on the annual IRS election or approval of last year's meeting minutes.
What if you do combine the mail ballots with a meeting and there is a tie. In the past, the proxies generally enabled the Board to hold a runoff election right there and then. Not any more. Now, the Board will have to go back through the double envelope ballot system, I presume.
What if you are at a recall meeting and the entire board is recalled. In the past, the new board could be elected that same night because of attendance and proxies. What now - do you have to go back through sending out the double envelopes mail ballots for the new Board? Who will conduct that election - the old recently recalled Board?
What if you cannot get a quorum of returned ballots, can you send out followup packages and let the members know you need them to vote? If they send in a second package, can you count it? I am presuming the answer is no because ballots are not revocable once received by the Inspectors.
I have had dialogues with readers, other professionals, the aide to the author of the two elections bills, and many many people and like one of my readers said. "Every day its a new headache, isn't it?"
Lots of people are calling me because I write rules asking how to resolve these issues. All I can say is try to anticipate the issues BEFORE your first meeting under this new law, and get help from someone who knows. You can ask the author of this law or his aide, but remember the old adage, ... you get what you pay for. And also remember that this law was written because of what appears to be a presumption on the part of the author that HOAs needed major reform in elections - so don't expect any sympathy.
And I have news for you. New, complicated law is not going to solve elections abuses. I have already seen and heard of some in the making. And at the same time I have seen many, many service providers and boards trying to figure out how to have a [guaranteed] legal election under this new law, given many past experiences that do not fit into a neat little box of fixes under this new law. Folks, there ARE NO GUARANTEES.
Take an aspirin and call me in the morning! (Not really, if everyone who was baffled by this law called, my paying clients would never get through, and I - and they - might get testy).
You can check out my website. I am setting up affordable telephone conference and face to face learning seminars for this and other issues. 2 hours of brainstorming, $25 plus telephone service fees. Sound interesting? Go here:http://www.californiacondoguru.com and check out the learning opportunities. The more interest, the more classes.
Posted by Beth Grimm at September 15, 2006 5:10 PM