As Americans gear up for what will certainly be one of the most anticipated and eventful election seasons in recent history, many condominium associations are also gearing up for their own election season. As emotions, opinions and accusations fly, it is important for each condominium association to ensure its Board and owners follow the governing documents, while being mindful of the following provisions of the Illinois Condominium Property Act (“Act”) in preparing for the annual meeting.
The Annual Meeting
The election of the members of the Board of Directors occurs each year at the Annual Meeting. The association is not permitted to “skip” the election, as Section 18(b)(3) of the Act requires the association to conduct an election each year. Depending on the terms of your association’s Declaration, the Annual Meeting may occur on a specific day each year, or may be scheduled at the discretion of the Board.
Who is Permitted to Vote in the Election?
With few exceptions, only unit owners, who are members of the association, may vote in the Association’s election. An issue may arise from time to time when a spouse of a unit owner seeks to vote in the Association’s election. However, unless the spouse possesses ownership in the unit, a spouse is not permitted to vote.
One permitted exception to the general rule is that individuals who are “installment contract purchasers” may vote in board elections. An installment contract purchaser is one who has a contract in which a seller agrees to sell a unit, and the consideration for the sale is payable in installments for a period of at least one year after the buyer takes possession of the unit. In this type of transaction, the seller continues to have an interest in the property. In such a case, the installment contract purchaser has the right to vote in the board election unless the seller expressly retains such right in writing.
An additional exception exists where a unit is held in a trust or corporation. The trustee or corporate entity may designate a person to cast a vote on behalf of a trust or corporation and a beneficiary of the trust is also entitled vote.
Who Can Run for and Be elected to the Board?
Section 18 (a)(1) of the Act provides that members of the Board shall be elected “at large.” As a result, when read in conjunction with other provisions of the Act, only unit owners may run for and be elected to the board of managers. As with voting rights, the right to run for the Board also extends to an installment contract purchaser (as long as the right was not retained by the seller of the unit), the agent or beneficiary of a trust, and the authorized agent of a corporation holding title to a unit.
It is important to note that in some associations, the governing documents contain restrictions on the rights of owners to run for the board or vote in the election. These may include a residency requirement, where an owner is required to reside at the property in order to run for the board; or good standing requirement, where an owner is required to be current on the payment of assessments in order to run for or be elected to the board. If there is a question as to whether these requirements are enforceable, the association should consult with its attorney.
We recommend that all associations properly vet or review the eligibility of candidates prior to the annual meeting, to rule out any concern that a candidate may be ineligible. This may be done through the association’s attorney.
The Voting Process
Generally, owners may vote by submitting a proxy form, or by submitting a ballot in person at the meeting (unless the Association has adopted rules allowing for mail in ballots). The manner in which the proxy or ballot is sent to and received by the association may vary; however, special attention should be paid to ensure the association follows its governing documents in the process.
Ballots & Proxies
Unless the Association has adopted a rule to the contrary, many condominium associations permit owners to vote by proxy. A proxy form may be used when an owner cannot attend the annual meeting to cast a ballot, or simply wishes to submit his or her vote prior to the meeting. The proxy form allows the owner to designate an individual (the “proxy holder”) to cast his/her ballot at the annual meeting, but is not, itself, a “ballot.”
Section 18 (a)(18) of the Act provides that if a proxy is distributed by the board, the form must provide the unit owner with the opportunity to designate any person as the proxy holder and must give the owner the opportunity to express a preference for any of the known candidates for the Board or to write in a name. This applies only to proxies distributed by the Board, but does not apply to a proxy distributed by a unit owner.
For those owners who wish to attend the annual meeting in person and vote, the owner may vote by ballot. The ballot form itself should list the names of all known candidates, and also provide spaces for write in candidates, who may be identified at the annual meeting.
In some associations, the process of “secret balloting” is also used, per Section 18(b)(10) of the Act. In such elections, the voting ballot is marked only with the percentage of ownership interest for the unit and the vote itself. Such a process permits the association to keep the identity of voting owners confidential.
Voting by Acceptable Technological Means
Many condominium associations are now taking advantage of recent amendments to the Act which allow an association to adopt rules that remove proxy voting and/or permit voting via acceptable technological means in a board election. In such cases, the association must have adopted such rules at least 120 days before the election. Generally, if such rules have been adopted, then the owners may vote as follows;
- owners may submit a ballot in person at the election meeting, or submit a ballot to by mail or other means of delivery specified in the declaration, bylaws, or rule; or
- owners may submit a ballot in person at the election meeting, or submit a ballot by “any acceptable technological means.”
Note that any unit owner who submits a ballot by mail or other means of delivery specified in the declaration, bylaws, or rule, or an owner who submits a ballot via electronic or acceptable technological means, may always opt to cast a ballot, in person, at the election meeting before the close of voting. In such a case, the owner thereby voids any vote that was previously submitted.
Declaration of Candidacy
In cases where the board has adopted rules which remove proxy voting under Section 18(a)(B)(9)(B), but allow voting by the submission of an association-issued ballot in person at the meeting or via mail or other means of delivery, the board must give unit owners not less than 21 days’ prior written notice of the deadline for inclusion of a candidate’s name on the Association-issued ballot. The deadline for inclusion of a candidate’s name on the ballots must be no more than 7 days before the ballots are mailed or otherwise distributed to unit owners. The Act further requires that every ballot issued by the Association must include the names of all candidates who have given the board or its authorized agent timely written notice of their candidacy. In addition, every ballot must give the person casting the ballot the opportunity to cast votes for write in candidates.
In cases where a Board has adopted rules allowing for voting by acceptable technological means, the board must give unit owners not less than 21 days’ prior written notice of the deadline for inclusion of a candidate’s name on the Association-issued ballot. Section 18(a)(B)(9)(B-5) states that the deadline for inclusion of a candidate’s name shall be no more than 7 days before the instructions for voting using electronic or acceptable technological means are distributed to unit owners. The Act further requires that every instruction notice must include the names of all candidates who have given the board or its authorized agent timely written notice of their candidacy. In addition, every instruction notice must give the person voting through electronic or acceptable technological means the opportunity to cast votes for written in candidates.
Distribution of Candidate Information
Section 18(a)(17) of the Act provides that the board may distribute to unit owners biographical and background information about candidates for election to the board if (i) reasonable efforts to identify all candidates are made and all candidates are given an opportunity to include biographical and background information in the information to be disseminated; and (ii) the board does not express a preference in favor of any candidate.
The Ballot Counting Process
Some associations hire an accountant or auditor to collect and oversee the counting of the ballots and proxies, or allow the managing agent to conduct this process. In smaller associations, the Board may administer the election process, and/or request that unit owners volunteer to assist in the process. Regardless of who oversees the ballot counting process, any candidate for election to the board or such candidate’s representative shall have the right to be present at the counting of ballots at such election.
While many associations experience few to no issues with the election process, some associations experience fiercely contested elections. Such issues may relate to the content in the information an owner seeks to distribute for the board election, as well as the manner in which owners attempt to distribute their own election propaganda. As issues arise, the Board should review the governing documents, including any rules governing elections and solicitation in the association, to determine whether the owner’s conduct is in compliance with the governing documents.
Other issues may arise when the Board itself fails to properly follow its own rules and governing documents during the election process. Examples of these mistakes include: failing to issue proper notice of an annual meeting; failing to solicit candidates within the proper time period; failing to issue the proxies and ballots within the proper time period; failing to issue proper instruction notices if permitting voting via electronica means; and failing to obtain quorum at the election meeting.
As your association prepares for election season, it is extremely important to ensure that you follow the proper procedures, as set forth in the Act and the governing documents, as the effect may be as small as the disqualification of a candidate, or invalidation of the entire election in extreme cases.