Can Your HOA Save Money on Elections? Or Will Penny Pinching Backfire?
- Housz
- 13 hours ago
- 6 min read
December 2024
Beginning next month, California's Davis-Stirling act will permit electronic voting in elections. E-voting, rather than sending ballots by ever-costly snail mail, sounds like a great way to save money.
But is it?
Here, our experts discuss the challenges communities are having getting e-voting underway and whether they've seen clients reduce the costs of elections with e-voting or other smart moves. And are there communities being penny wise and pound foolish—in other words, cutting costs that risk their efforts to get a quorum or that impair transparency efforts?
Little Money Saving to Be Had
Jennifer Biletnikoff, a shareholder in the Naples, Fla., office of Becker & Poliakoff, who has represented condos and HOAs for more than 15 years, isn't seeing clients have much success in saving money on their elections.
“A couple of years ago, Florida added the ability for boards to adopt e-voting, much like California,” she explains. “But the issue is that you can't require everyone to vote electronically. Owners have to consent to receiving electronic notices and to e-voting.
“There may be some cost savings because if people are consenting to e-voting, you don't have the mailing costs, but there are still people who don't opt into e-voting,” adds Biletnikoff. “I also hear a lot of association managers complaining that the addition of e-voting makes elections a little more administratively burdensome because they have to keep an updated list of owners who consented to e-voting and those who haven't and therefore who gets a mail ballot and who doesn't.”
That's also true in Colorado, where Melissa Garcia, a shareholder at Altitude Community Law PC in Lakewood, Colo., who provides advice and counsel to Colorado associations in all areas of community association law, says boards may be saving money on the margins with e-voting.
“They do want to save money,” she says. “Thankfully, they're not doing that in elections in ways I'm uncomfortable with from a legal standpoint.
“But they want to save money while also using options available to them without sacrificing transparency and meeting quorum and all that,” adds Garcia. “E-voting has been a great thing in Colorado because boards realize that, to get more engagement, they actually have to provide options for e-voting and for virtual meetings. That's the preferred method of communication by a lot of people.
“So if they want more participation, Colorado boards are turning to e-voting,” says Garcia. “They typically have an informational meeting first, and that's typically done virtually. The candidates record their statements of candidacy so people can watch them.
“However, e-voting doesn't save too much money,” she states. “They might be saving money because they don't have to rent a room for an in-person meeting. But they still have to mail something out. And here in Colorado, they have to mail that to everyone even if they've consented to e-voting. But I think that's going away because we're a big, green state, and we're killing a lot of trees.”
Tips for a Wise E-voting System
That's also the case for clients of Holly Bunch, CMCA, AMS, PCAM, Raleigh, N.C.-based regional president of the Carolinas for RealManage, who oversees more than 200 condos and HOAs in North and South Carolina. For them, e-voting isn't so much about saving money. It's about boosting owner participation in meetings and elections.
“I wouldn't necessarily say boards are trying to cut costs on elections,” she says. “They're becoming more inventive in how to get people to attend meetings.
“One thing COVID taught us is that we had to go to a whole different format when being in person and voting wasn't an option anymore,” she recalls. “When we first started voting electronically, people were just fumbling through it. There were no guidelines on how to set that up and what was counted and not counted. As that has progressed, there are many new options for boards in both North and South Carolina to evolve their election process.
“The first thing I tell boards that ask if they can do e-voting is that you have to know your audience,” advises Bunch. “For a 55-plus community, it may not be the best option. But where I am, Raleigh, is very tech based, and everyone's looking for the next big thing.
“E-voting isn't really a cost-cutting tool, but it allows us to meet quorum more easily,” she states. “You may save a little money because you're holding a meeting virtually and you're not paying for a meeting room. Also, if you make quorum earlier, that may be a cost savings because you don't have to mail out another meeting notice. But for most, it's about making quorum, which is harder and harder to do.
“That said, I still do have communities that are sticklers, and e-voting isn't as widely used as it should be,” says Bunch. “They were the first boards who wanted to go back to in-person meetings, and it didn't matter that quorum was easier using technology.
“There could also be some hesitation that some managers might have,” she adds. “Managers might have a little trepidation because the technology is new to them. If you're a manager, the last thing you want to do is to mess up an election. It's a combination of reasons why e-voting hasn't grown as much as it could.”
The Risks of Trying to Save Money on Elections
The important thing about elections is that they're not much different than other budgeted items for condos and HOAs when it comes to being a target for savings. But they are different in one huge way.
“I think boards are always trying to save money,” says Matthew Zifrony, who advises homeowners and condo associations at Tripp Scott, a Ft. Lauderdale law firm, and who has also served as the president of a 3,000-home association. “Some clients are more aggressive in saving money than others. So I wouldn't necessarily limit it to elections. It's the same discussion with all the different types of money saving boards seek.
“But with elections, in many instances, it's very statutorily specific in how elections must be run,” adds Zifrony. “If you have annual flowers and change them every quarter, but the association wants to save money, maybe they'll change that to three instead of four times of year. That change they can make because there's no statute governing that.
“But when it comes to an election, there may be a statute that governs things like how many notices you must send out,” he notes. “If a board says, ‘Let's try to save on postage by emailing and posting notices,' but the statute requires that election notices be sent by U.S. mail, that board can have a problem.
“Some documents also say the election must be held in a room large enough to hold all owners,” says Zifrony. “Still, year after year, nobody comes.
“This happened to my community,” he explains. “We've always rented a very large ballroom in a very large hotel just in case hundreds of people show up to our election meeting. We said, ‘Enough is enough; let's do it in our clubhouse.' Of course, some owners said to us, ‘We've heard you're trying to minimize the number of people who come.' We, of course, weren't.
“There's no statute that says we must have our annual meeting in that hotel ballroom, and our documents don't say that either,” says Zifrony. “So that's where I throw caution to the wind. Cutting corners is fine, but statutes and document are so specific with elections, and you must hew to the letter of the law and your documents. If you're able to do that and save money at the same time on your elections, go for it.”
Reposted from HOALeader.com
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Housz, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Housz, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
Housz, Inc
2235 Sepulveda Blvd.
Torrance, CA 90501
310.808.8714
We Manage Properties in the South Bay
Comments