Understanding “Cumulative Voting” For Directors in Homeowners Associations
The process for electing directors within homeowners associations necessitates knowing whether your homeowners association’s governing documents require the use of “cumulative voting” by the members. If so, members need to understand how cumulative voting works and need to be informed about it before they cast their votes for directors to be elected.
What is “cumulative voting?”
When an association’s process for electing directors utilizes cumulative voting, the association members who are eligible to vote have the right to accumulate their votes and cast more than one vote for a candidate. The total number of votes that a member has is based on the number of directors that are up for election. For example, if an association has a five person board of directors and its bylaws provide for new directors to be elected each year, members of the association that are eligible to vote will have five possible votes. Since some homeowners associations have directors serve for two year terms, their annual election will not be for the election of all of the directors. Such associations will generally stagger the voting so that one year there are two directors to be elected (in which case the members will have two votes for that election), and in the next year three directors will be elected (each member will have three votes).
When an association utilizes cumulative voting, the members can place all of their votes for that particular election on one person, or divide them among the candidates in any manner the member desires so long as the total number of votes cast does not exceed the total number of directors to be elected in the election.
Why does an association utilize cumulative voting?
The reason for having cumulative voting is that it promotes minority representation on the association’s board of directors (people who disagree with the views of the majority of the board or other members). Through cumulative voting, members who hold minority views on issues can get together and put all of the votes that they are entitled to on the candidate of their choice (who presumably agrees with their views), thereby increasing the likelihood of electing at least one person to the board who shares their views. For this reason, the governing documents for many homeowners associations were drafted to provide for cumulative voting so that the developers of the project, who created the homeowners association, could keep their personnel on the association’s board as long as they retain an interest in the association. By doing this, the developer can retain more control over the operations of the association.
Is cumulative voting more desirable?
While having cumulative voting appears to be desirable, there has been a lot of controversy over the process and many homeowners associations that utilized it have amended their governing documents to eliminate the process. One perceived negative is that it also operates to allow those members holding the majority opinion to stack the association’s board with their desirable candidates that hold the same views. Thus, it makes it more difficult to get new people with differing views elected to the association’s board. This results in some people, who are set in their ways and not receptive to new ideas, being re-elected year after year. As a result, potential new association members who can bring fresh ideas and energy into the association don’t get elected and things never change. This ultimately creates dissention and causes members to lose interest and avoid being involved in their association. Additionally, experience has shown that the use of cumulative voting often complicates homeowners’ association elections because of a lack of understanding of how the process works, inadequate information provided to members as to the procedure, and confusion in the counting of ballots.
When does a homeowners association use cumulative voting?
The use of cumulative voting for directors in homeowners associations depends on the laws of the state in which the association is located and the content of the association’s governing documents (generally the bylaws, but there could be provisions in the articles or CC&Rs). Because of the problems that have been associated with cumulative voting, some states have banned the practice and others leave it up to the association to decide. Thus, it is important to review not only the association’s documents relative to the procedures for the election of directors, but also the state statutes that cover the subject. When an association’s governing documents provide for cumulative voting, if the elimination of cumulative voting is required by law, or desired by the association, the appropriate governing documents should be amended to eliminate the process.
Conclusion
Currently, the general consensus is that the problems that are associated with cumulative voting outweigh the potential benefits relating to minority representation on the association’s board of directors. The process makes it too easy to get undesirable candidates on an association’s board and makes it extremely difficult to remove a problem director because the same process used to elect them is used in voting to remove them.