Honest Board Elections How to Make Sure It's Not Rigged

Imagine that your building's sponsor has planted a friend or business partner in one of the units he owns in the building.

This shareholder then decides to run for a seat on the board and with the help of the sponsor, wins. In addition to any sponsor held seats already on the board, the sponsor now has an additional ally and is closer to gaining control of the board and possibly swaying key decisions for the building in his favor.

This may sound like an extreme way to rig an election but it is conceivable. So how does a board make sure that the annual election is honest and that no one is trying to tamper with the outcome? The first and easiest way is to understand the voting process that takes place in your building. The next step is to monitor each step of that process to make sure that everything is done correctly. There are even companies that specialize in handling board elections that can come in and guarantee an honest election



The Voting Process

Most co-op and condo buildings use one of two types of voting: straight and cumulative. Straight voting is the simplest and easiest type of voting. Say you own 100 shares of stock in the co-op corporation or common interest allocations in a condo association. If there are seven seats to be filled on the board, you can vote the full 100 shares for each of the available seats, casting a total of 700 votes. In cumulative voting, which only occurs in co-ops, you can distribute your 700 votes however you want. For example, if you really want one person to win, you can cast all 700 votes for that person, which would obviously stack the scales to his advantage.

Robert Kraus, an attorney at Rosen & Livingston, points out that, If cumulative voting is not mentioned in the Certificate of Incorporation, cumulative voting cannot exist. If cumulative voting is held when the Certificate does not mention that it exists, the vote can be challenged by any one group of shareholders, who will always win in court.

Read More...

Related Articles

A Look at Election Fraud

Staying on the Up and Up

Q&A: Are my board's nomination/voting practices legal?

Q&A: Are my board's nomination/voting practices legal?

Forensic Audits

Following the Money

Q&A: Voting When a Member Is Absent

Q&A: Voting When a Member Is Absent

Proxies & Procedures

Doing Board Elections Right

The Democratic Way

Electing New Board Members

 

6 Comments

  • in following elections at east mid town plaza for the last 8 years i have found that the management company collects the proxies never supervised my the shareholders (which was requested and honest ballot only supervised the voting and cerified management counted proxies. as a research social worker and a property manager i have found this to be an un-honest election to keep the present members in control i am a shareholder at east mid town plaza that ran for the board to follow their illegal practice and have complained to honest ballot
  • Is there a specific procedure which must be followed for the board elections?
  • Dishonest elections are the norm on freshly turned over properties. States will frequently demand that the association be turned over to owners before all units are sold. That gives the developer votes for the very board members who will be negotiating the legalities of the turnover. And the more units unsold (or that have been purchased by the developer and associates) the more weight those votes hold. Those votes can be used to elect those who are inept (They want to be involved, although they have no management skills.) friendly to the developer, non-confrontational (all the easier to roll in a developer dispute) silent investors in the seller, or in the most blatant examples, the developer's representative, whether an employee or the developer himself. (It happens.) If those friendly to the developer (or who ARE the developer) can jam through certain agreements early on, before the community can coalesce (for instance, at a board meeting the morning after the turnover [Yes, it has happened.]) future efforts of the association to deal with the developer and take advantage of legislative protections can be crippled. The first board is the most important board because they must negotiate the turnover from the developer, exercising the owners' rights and taking advantage of legal protections. If legislators really wanted to protect owners, they would ban employees and investors in the developer from being on the board until the statute of limitations is up on all potential claims against the developer.
  • The problem I see isn't with Honest Ballot but rather with the Board of Directors. Shareholders recently received a form to make nominations to the Board. The current Board knows who they are and will probably nominate themselves. I know some shareholders by sight but not by name. Therefore, shareholders are at a disadvantage in nominating and the current Baord has an advanttage in making nominations.
  • in event of a tie what is procedure any time limit for revote
  • Our cooperative allows the spouses of directors to volunteer in the association's business office with unrestricted access to all files and data bases. When shareholders submit their ballots, they sign a numeric list by unit. The president was up for re-election last year. The rumor is that the spouse copied the list then solicited ballots from those who had not yet voted. And, there was an incident were a shareholder returned home unexpectedly, submitted his ballot only to find a ballot had already been submitted and signature forged. How does one influence the board to make necessary changes?