Electing a board of directors is one of the most important functions the membership plays in a community association ("HOA").
The board of directors is tasked with making important decisions on behalf of the HOA, including managing the HOA's finances, adopting and enforcing rules and regulations, and overseeing the upkeep of common areas. The following guidelines are designed to help HOAs conduct board elections that are legally compliant.
Follow Governing Documents and State Law
In general, the HOA's bylaws set forth the specific procedures for board elections, including the number of board members, their qualifications, terms of office, and the manner of election. State laws, such as the North Carolina Planned Community Act (Chapter 47F), North Carolina Condominium Act (Chapter 47C), and the North Carolina Nonprofit Corporation Act (Chapter 55A), also provide important requirements. The first step is to always review the HOA's governing documents.
Provide Proper Notice
All HOA members must receive advance notice of the annual meeting where board elections will take place. Notice should include the time, place, and agenda, and must be sent not less than 10 nor more than 60 days before the meeting, unless stated otherwise in the governing documents. Notices can be delivered by hand, mail, or electronic means, as specified in the bylaws. In addition, it is also possible to elect directors with a written ballot instead of at a meeting. To have a better understanding of the differences between voting at a meeting and voting by written ballot, please check out our article linked here.
Ensure a Quorum
A quorum is the minimum number of members who must be present for the election to be valid. Unless the bylaws specify otherwise, a quorum is present if persons entitled to cast at least 10% of the votes are present in person or by proxy at the start of the meeting. It is possible for the HOA's governing documents to require a higher quorum, but North Carolina law does not allow the quorum to drop below 10% for an HOA.
Nominate Candidates Transparently
The members should understand the process for nominating candidates to the HOA Board of Directors. Absent a specific process in the governing documents, members should be allowed to nominate themselves or others and provide information about each candidate to all members before the election. This transparency helps ensure that all interested and qualified individuals have an opportunity to seek election.
Conduct Voting Fairly
Each member may vote as specified in the governing documents. Votes may be cast in person or by proxy. If a lot has multiple owners, the owner who is present is entitled to cast all votes allocated to that lot. If more than one of the multiple owners is present, the majority in interest decides how to cast the vote unless otherwise specified.
Publish Election Results
Within 30 days of the election, the association must publish the names and addresses of all officers and board members. This ensures transparency and allows members who were not in attendance at the meeting to know who is representing the HOA.
Document the Process
Keep detailed records of all nominations, notices, ballots, and meeting minutes. This documentation protects the association and its members in the event of disputes. As a general rule, these records should be kept for 3 years following the election.
Conclusion
A legal board election process is essential for the proper governance of any HOA. By following these guidelines and adhering to your HOA's governing documents and state law, you can help ensure that your HOA is well-represented and that the election process is trustworthy. Having qualified legal representation can go a long way to ensure the health of your HOA. Our Community Associations Team, backed by our full-service, state-wide Community Associations Practice, is ready to assist with your community association needs.
