Every executive board in an association must go through an election process on a regular basis, which is typically annually and spelled out in the association’s bylaws. In accordance with NRS 116 and the associations governing documents, every board must consist of no less than three board members and can be as large as seven to nine board members. Homeowners are added to the board at the following points in time during construction build out:
- 25% – one owner member elected, at which point 1 developer member is removed
- 50% – a second owner member elected, developer has the right to either have a second developer member step down or increase the number of board members to 5 in order to stay on the board and hold majority vote.
- 75% – final transition election, which means all developer members are removed and the association is transitioned to the owners.
Once transition has occurred, elections are held annually and owner members are elected for two year terms, which are staggered (i.e. one member for one year and two members for two years).
How It All Works:
First thing’s first … nomination forms must be mailed out to each owner. This form is usually accompanied by a letter that explains the nomination process, qualifications of a board member and provides the deadline in which to return the nomination form and where it should be returned to. Candidates are required to make certain disclosures like conflicts of interest and whether they are a member in good standing or not. If a candidate does not disclose this information, the association can inform the unit owners that the disclosure was not provided. Nominations forms and ballots are mailed to owners of record ONLY.
Now that the nomination form deadline has approached (30 days after mailing the forms), the association has to decide on one of two things … to send ballots, or to not send ballots. The law states that the board has the option to not send ballots if the number of nomination forms received are equal to or less than the number of seats open for election. If the board decides not to send ballots, they must send a second notification to the owners giving them notice that ballots will not be prepared or mailed and that the candidates that submitted their nominations will be deemed duly elected to the board unless one or more qualified owners nominate themselves to the board within 30 days after the second notice is sent and the number of nominations received after the second mailing is greater than the number of open seats. Remember, you should only send the ballots out if the number of nominees running is greater than the number of seats open for election, otherwise, you have just wasted association money sending out a ballot package to the owners when all nominees will be elected to the board by default anyway. As easy as it may seem, this tends to be the most difficult decision for a board to make.
The next step is to mail the ballots. Associations use what is called “The 3 envelope system” for elections. Here is how it works … First, all owners who submitted nomination forms are placed on a ballot, which is mailed to the owners, along with three envelopes, notice of the meeting, the candidate disclosures and hopefully instructions on how the election and ballot process works (this tends to be a bit tricky for some owners). Notice of the meeting is simple, all you need to inform the owners is the date, time and location of the meeting. This must be mailed out not less than 15 days and no more than 30 days before the date of the election meeting (the day of the meeting should not be counted as one of those days!).
“The 3 envelope system” is simple for the experienced and somewhat confusing for everyone else. The three envelopes are 1. Secret Ballot Envelope 2. Return Envelope 3. Mailing Envelope. Envelope one should be blank with no owner information printed on it … in most cases, associations print the words “SECRET BALLOT” on the envelope. This is the envelope that your vote is sealed in. DO NOT put your name or address on this envelope … otherwise your vote is no longer a “secret”! Envelope two is the envelope that you mail back to the association and should contain your sealed “secret ballot” envelope. This envelope MUST have your name and address on it in order for it to be considered a valid vote. The purpose of having the owner information on the return envelope is so that we can verify that you are in fact the owner of the property and that you are permitted to cast a vote in accordance with the governing documents of the association. Some associations don’t allow delinquent owners to cast a vote, so without this information, the association is unable to verify delinquency status. The third envelope is simply the mailing envelope, which is what the association uses to put everything in to mail it out to the owners.
The election … You have cast your vote and the association has received your return envelope and ballot and the election meeting has started. The association or community manager, will appoint election inspectors to open and count ballots. These volunteers should be owners and cannot be running for a position on the board at that election meeting (conflict of interest!). The volunteers will open each return envelope. The return envelope is put in one pile and the secret ballot envelopes are put into another pile – UNOPENED! The association usually keeps the return envelopes just in case they need them for future reference (recall elections or to verify the voters if contested). The secret ballot envelopes are now in a pile, with no identifiable information printed on them … SECRET! And now the secret ballot envelopes are opened one by one and the ballots are removed from the envelopes (secret ballot envelopes are usually thrown away after the meeting). The volunteers then tally each vote and the votes are verified by each volunteer. The volunteers sign the tally sheet stating that they participated and that they were acting in the best interest of the association (in most cases, this helps to prevent ballot fraud, which is a class D felony in the state of Nevada). The volunteers then provide the results of the election to the community manager or acting President and the results are provided to the owners present and written into the minutes of the association. If ballots will not be sent out, the board still has to send out the candidate disclosures and the results of the duly elected board so that the owners are aware of who is now on the board.
The final step is to organize the board or elect officers. This is where the members of the board discuss amongst themselves and determine who will hold each position of office … President, Secretary, Treasurer or Director. This is not required, but in some cases, association board members choose to hold two positions such as Secretary and Treasurer, especially if the newly elected member has no experience. Once the positions have been chosen, they are announced and formally adopted at an open meeting (this does not have to be done on the night of the election).
If you have any questions, please feel free to contact a member of the Shelter Management Group (SMG) team, we would be happy to help! Contact us at 702-818-4780 or info @ SMGHOA.com
Article Authored By: Jamie Collins, Supervising CAM, CMCA, AMS agent at Shelter Management Group (SMG)