 This is State Tech Hawaii, Community Matters here. It's Thursday again, three o'clock. Welcome to Kondo Insider, Hawaii's show about association living. We've been doing this show for about two years now. We get lots of questions and community response to what we do. In fact, on January 4th I had our guest here, Steve Glanstein, talking about annual meetings. And we had so many questions after that show about voting, and because we are in the annual meeting time of year, I decided to ask Steve to come back and talk to us just about the issue of voting. So welcome to the show and remind everybody who you are. Thank you very much, Richard. My name is Steve Glanstein. I'm a professional registered parliamentarian, nationally certified, which means I'm basically an expert in Robert's Rules of Water, newly revised, which is mandated for condominiums and community associations in the state of Hawaii. How many PRPs are there in Hawaii? There's about a half a dozen PRPs, just a few of us who work with condominiums and community associations. Now do other organizations like conventions use parliamentarians? Conventions, I do a couple of churches. I've even done a couple of dog clubs. And there's a lot of groups that will use parliamentarians. It's not unusual. Wow, that's exciting. Anyway, we were talking last time about the annual meetings about voting. And a lot of questions came out about voting, recording votes, what happens if this happens or that happens. Let's kind of break it down into board meetings and annual meetings or homeowner meetings, member meetings. So how do boards vote? I mean, they're a small board, typically. Well, board voting is different than association of owners at annual meetings. So board voting is different because in Hawaii, boards of condominiums and community associations have to record the votes of how their directors vote in the minutes for all sessions except for executive sessions. So those recorded are there. And usually, if you're on a board, there's no proxy voting. You're elected to the board. You're the individual on the board. So you're speaking as a single board member. So there's nobody who technically represents you if you're not there. So you have a different environment in boards than with board voting. The largest board I know for condo is usually nine people. That's pretty much the average for a large association. Do they actually have to have a written ballot that someone says, I move, we paint the building blue? That they actually have to have a ballot and write it and fill it and record it? Or is it a rising hands vote or some other type of vote? Yeah, they have problems if they use a ballot unless they record how their directors vote. There are a couple of boards actually in Hawaii that are larger than nine. There's one board out in the east end of our island that's got 13 people. And another one on Maui that actually has 10 people. But they're still considered small boards. 12 members are less at the meeting. Generally, that's considered a small board. And the rules are relaxed, but when it comes to the voting, there's an override in the statute, in the legislative statutes that overrides Roberts that does require that the voting indicate how each director voted, as I said before. Now, however they vote, whether they vote by hand or voice, it's important that they record how the individual directors voted. But there is no mandate they have to have a written ballot? No, not for board meetings. I do a lot of association meetings, a lot of board meetings. And I haven't seen a mandate for a written ballot in any board meetings. How about, you know, the big thing I always see come up is when you have the organizational meeting, which is a board meeting, and they're voting for the next officers, like the president and vice president. Can they do secret ballots? Because you have the statute that says, I'm supposed to record how everybody voted. Okay, well just to make sure your viewers know, Richard, that it's usually an annual meeting. And then there's another meeting following the annual. It's usually a board meeting called an organizational meeting. At that meeting, the board members, the newly elected ones, usually will elect officers. So the officers are elected directly by the board there. At that particular meeting, it's usually limited to just electing officers. It's not one of the permitted uses of executive session. So it's open to the owners. Owners can participate. And when the board does vote for their officers, unless it's unanimous, they've got to record how the directors voted for each of their officer candidates. Is it prohibitive? Because, you know, a lot of people, everybody knows everybody. It's not really controversial. Could someone make a motion at that organizational meeting saying, I nominate Steve for president, Richard for vice president, Sue for secretary, and Sally for treasurer. Is it a total ballot? And it gets passed, let's say, unanimously because everybody knows everybody. Can they do that? That's actually commonly done. And then the minutes will show that they agreed by unanimous consent to elect this particular slate. When there's no controversy and nobody insists on a separate election, that makes it much simpler and gets done in a matter of seconds. So from a protocol procedure point of view, there's nothing wrong with that? No. And then, just briefly going back to voting and recording the votes, that doesn't apply to executive session, though, right? No, that does not. So should boards keep minutes of executive sessions? Well, if they did any official action there, they should. There's no excuse for not having minutes. You need to have minutes for executive session. Whether you keep them with your attorney, whether you just make one written copy and don't distribute it, or you need to have minutes that substantiate whatever activities were done in executive session. Yeah, I think it's important to note that an executive session that, or minutes in general, you don't have discussion. They all have discussion about maybe setting a lawsuit to pros and cons. None of that appears in the minutes. It's going to be the action taken by the board versus all the dialogue that went beforehand. Yeah, and that's a very critical point. Because what if you adopt a motion in the executive session to settle a case for no more than a certain amount? The last thing you need is to have that in the minutes of the regular session. That would damage the association. So putting it in the executive session means also it needs to be kept confidential. But what people said wouldn't go in those minutes, because that's what somebody hears, what they thought they said, and that's not what the purpose of minutes. You think of minutes as official action, then you're really not going to go too wrong on it. I know this is probably not desirable, but sometimes there's an emergency and the boards do a vote by email for lack of a better word. How do you address that? Well, the way I address that is I tell them, you may have approved it by email, but it's not an official action unless you approve it at a specific board meeting, which is a quorum present. So whatever action you take, especially emergency at your next regular or call a special meeting, have a motion to ratify that action that was taken, get it adopted. It's my understanding too, let's say you wanted to hold a special meeting for a particular purpose because you needed to spend money for this plumbing repair. They can do it by telephone. They can call a special meeting. And the important thing is a notice to all the board members to attend. And even though the statute requires some notice to the owners, it's when practicable in the words, they're actually in the statute. I think they could call a special meeting on an emergency basis to approve the repair of the gas line, for example. It has actually gotten easier with Chapter 514B because they've provided for having telephonic communication or simultaneous communication. So if I'm here at a board meeting, you're on the telephone, I've got to be able to hear you. You have to hear me. Other people on the phone have to be able to hear you as well as me simultaneously. And you can have a meeting that way. I think we have made a lot of progress in that area. I would remind all of our viewers that it's important to take minutes. And it's important to record all the votes of the directors and be aware that these have legal consequences and risks for the association and it's important you maintain accurate records. But I'd like to go on to what I'm going to call a member meeting, annual meeting, special meeting of the homeowners and how voting kind of works there and how it's different. But you might begin by just reminding everybody that there's been cumulative and straight voting. Okay, cumulative voting is a system of voting which allows a minority to ascend and to have an increased opportunity to get a person elected to a board. It actually was used in Chicago in the 19th century with the election of Alderman and it was stopped several years ago. And essentially what it means is if you have a certain number of positions open for election. For example, if I have three positions open for election, an individual can vote three times for one person, twice for one and once for another or once for each of three different people. And as you can imagine, that can get kind of complicated if we have eight or nine positions open all the combinations. But it does mean that if somebody has a small number of votes and they can accumulate them, that's the word cumulative voting, to have a better opportunity to elect someone to the board. And we had the law changed a few years ago to clarify that whenever there is cumulative voting, it implies that those with the most votes will automatically be elected beginning with the longest terms. Well, let's just assume you have five people running. And three people are elected and two are tied. You have to start all over again with all five or do you just do the two? Well, you're saying there's five people running for three positions, right? No, there's five positions. Five positions. And maybe 20 people running. But at the end of the day, three clearly had the votes. Two, the next person, those two are tied. Do you elect the five again all over again so they can redo their cumulative voting or do you just go back to the two? Well, the ones who got elected, they're elected already. The ones who tied, we don't know which one got elected, so we would have to re-ballot. And it's really important to make sure you have balance in order to do that should you get a tie. And this situation does occur. Sometimes it happens when they tie for the different terms where they have a three-year term and a two-year term and then they have a tie with two people with the different terms and then they have to re-ballot on it. So it has happened. Can they avoid re-balloting if the parties themselves said I'll take the two-year and I'll take the one-year term? Could they just by consent avoid having to have the second ballot or would they have to have the second ballot? Well, some by-laws allow for written consent for waiving the ballot if there's no contest. But most of the by-laws we work with will say something like secret ballot may don't give you that exception. If you don't have the exception, you end up having to re-ballot and sometimes that can be problematic because you can have a tie or people don't reach the necessary requirement in order to get elected. So that's a function of their by-laws. If the by-laws require a ballot and you don't want that election to be challengeable then you have to go do the ballot. I've actually saw an association on Kauai one year. We had that exact example and the two parties said I'll take the two-year and I'll take the one-year and the owners objected because in the end the guy was thinking the two-year they didn't like that much and when we did the vote it actually ended up reverse. So the owners have a certain amount of authority and it's protecting that authority when it comes to the secret ballot requirement. In our practice we try to get our association clients to get the by-laws to permit a waiver. That way if they really don't have a challenge on it and nobody wants to challenge it, why not let it in? Most known is they don't want to re-ballot on it. If you have a dispute and someone says well I want the one-year, I want the two-year clearly there's a dispute they can ballot. So we tend to push our associations if they're going to amend the by-laws to look towards waiving the ballot when it's not necessary. Now realize an owner can always force a ballot just by nominating somebody else. There are associations out there. You know one of those common problems I see because we're a relatively friendly industry. We'll have three people running for three seats and nobody wants it, nobody's unhappy, there's no controversy and you have to go through this secret ballot because the by-laws say secret ballot which kind of takes a lot of time when you know kind of in advance what the results are going to be. Are there associations out there where the by-laws waive the secret ballot requirement? Yes, and we've been successful in getting associations to amend their by-laws. We're working with a couple of developers now to make sure that new projects they will provide for a waiver if there's no election contest. So we're trying to make a difference for associations. It might be helpful if the legislature could help on that and provide some sort of waiver in the event of a ballot if there's no contest then you could waive it. Otherwise we're hopeful that the Robert's Rules people will look towards amending that bringing it up to date in the next edition. One of the interesting things you may not remember this goes back a long time ago but I do a lot of work with developers and when we help them provide the initial governing documents for review you actually helped me write language in those projects. We had the waiver of the secret ballot when there was a consensus to who was going to take what term. Because it simplifies things to be honest with you. Yeah, and all an existing association has to do is to get deadlocked for four or five ballots in one evening and they become real believers in being able to waive it when there's no challenge in having it when you need it as well as making sure that those with the most votes get in. So associations usually become believers on this after they've had to go through the process. Oh yeah, because I remember many times people in the audience, the owners, the assembly would be upset because they want to get home to watch Y5O and they want another results and we have to wait for all of this when it's kind of a, everybody knows what the results are going to be. So it was like I want to go home, what do you mean? We have to do all of this. We've seen that where the need to go home is far more important in their mind than the need to have an election concluded. So you don't want to lose your quorum because you're in the middle of this and you're missing Y5O or NCIS or one of those Tuesday night meetings and shows that come on. It is important. I was being very local by using Y5O because I wanted to give credit to our film industry here because it helps our state in my opinion. So when we get into voting, just briefly again remind everybody what a proxy is. A proxy is a power of attorney given by one person to another. In this case it would be given by an owner to either an individual, board of directors in two different ways or to be used only for quorum and it allows that owner to get some form of representation at a specifically designated association meeting. We're going to take a short break for one minute and I have a lot more questions about this and coming up to be my magical question is can you have writer and ballot? So we'll be right back to tell you the answers to that question. Welcome to Sister Power. I'm your host Sharon Thomas Yarbrough where we motivate, educate and power and inspire all women. We are live here every other Thursday at 4 p.m. and we welcome you to join us here at Sister Power. Aloha and thank you. Aloha. My name is Mark Shklav. I'm the host of Think Tech Hawaii's Law Across the Sea. Law Across the Sea comes on every other Monday at 11 a.m. Please join us. I like to bring in guests that talk about all types of things that come across the sea to Hawaii. Not just law. Love, people, ideas, history. Please join us for Law Across the Sea. Aloha. Welcome back to Kind of Insider. We're talking about voting in association meetings and we've talked about board meetings and how they differ from an association. We were just in the throw of what we call annual meeting or special meeting of all the owners and I hope all of you out there was pondering my question. I asked the true or false for electing people for director in an association meeting. So the question now to our expert, true or false, you can have write-ins on association ballots at an annual meeting. Yes. It's true. Have you ever seen it? Yes. Sometimes people write in some very interesting names who are non-owners. People have written in Mickey Mouse. They've written in Bill Clinton. Bill Clinton was the most humorous because there was a William Clinton who was a whole unit owner in that association. So it was a valid vote. Those things have happened. In other cases, a write-in has actually gotten elected. We've had a deadlocked election up in the country a few years back and what they did is continue the meeting at the continued meeting. They had nominations and they wrote in the name after the nominations were closed. They wrote in the name of somebody and in that case they had nominations of John and Fred for example and meanwhile people had agreed they're going to vote for Sally and so they did the voting and everybody wrote Sally in and she got elected. It was valid. John and Fred were not happy but Sally was elected to that high-paying part of director's job. Yes. Certainly in your example if you wrote in a non-owner or a non-human that would be just kind of a void I mean you can't elect Mickey Mouse so I mean how would you record it? We don't have a humanity exception of the statute I don't believe however they have to be on title or somehow an owner or a representative according to the state law so they could do that but what we would record is one ballot voted invalid for a non-owner. You wouldn't write Mickey Mouse. No, you would not write Mickey Mouse, Donald Duck because people just get who-who and they don't like anybody and they don't like the world and it's not like even they don't like the people they just don't like anything and they write in crazy stuff all the time but I was more interested in your comments about legitimate right in ballots whether people can legitimately let the nominations are closed or is it a valid position to say I'm sorry the nominations are closed so Sally is ineligible. No, the eligibility is determined as well as their by-laws and the whole purpose of a ballot is to allow secrecy and one of those elements of secrecy is that an individual owner could write in the name of somebody that they want and sometimes like I said a very few times someone will get elected usually the right-ins if they're valid don't get a lot of votes sometimes someone will write in about a name even if a person is withdrawn because they really want to indicate their support for that person in my experience of 1,700 1,800 meetings is very rare for a write-in to get elected I don't think I see it I know the answer but I want people to understand this when I go to annual meetings we know we have secret ballots for the election of directors we also see we pass an IRS roll-over resolution sometimes we're approving the auditor the management company and those are done kind of by voice kind of a resolution if there's no objection this resolution right so what you're saying is they're not required to have a secret ballot usually when you look at bylaws they'll say the election of directors shall be conducted by secret ballot in accordance with some section of the bylaws they'll put the requirement in there they'll say at such annual meetings directors shall be elected by secret ballot and sometimes they don't even have a secret ballot requirement in special meetings so we've had cases where special meetings did not have the requirement annual meetings did waive the ballot in a special meeting but those things that you mentioned like a tax resolution approving the management contract usually those get approved by unanimous consent if there's no objection an IRS tax resolution will be adopted and then you pause since there's no objection the IRS tax resolution is adopted what if one person objects the chair notes there's an objection that has been made is there a motion to approve the IRS tax resolution is there a second it's moved in seconded to approve the IRS tax resolution is there any debate take the debate and then you would go to a vote more than likely it would be a ballot and as a matter of practice we generally try to find out what the person's objection is it could be and usually as they don't understand what it means and then further explanation we've usually seen them withdraw their objection then it goes through in a matter of seconds I would remind you at this moment about one of your and my historic moments actually you were the parliamentarian but I was the president of an association and if I remember correctly I had 1700 proxies and about 50 people showed up where we did this actually by the interest of time by a rising hands vote we raised your hands because we had about 25 against the motion 25 and favor the motion but I was the people in favor and I had 1700 proxies and so I declared in favor of winning and then explained that the one hand raise had 1700 proxies because nobody wants to sit there for two or three hours while you count all these ballots 1700 ballots is going to take some time we did have one case at a time share and removal the lady had 2800 ballots the board had 700 so they didn't buy the counting it was really a very simple process given that she had 2800 ballots or 2800 proxies they're not even going to give her a ballot as she said yes it was approved so that has happened with us as well as others. Well kind of leads into my major question and a bill that was introduced HB 2630 I think the number is because the one thing I would tell you after doing this for 25 years is the number one complaint I get when I go to meetings is how long it takes to count the ballots and when you start looking at an association with a lot of members cumulative voting multiple vacancies you can I don't know I can see these sometimes take over an hour sometimes two hours to count the ballots why don't we have any technology what's HB 2630 say? Well HB 2630 is designed to get us into the 21st century obviously in extreme cases it's taking a couple hours just to count for an election and the owner happiness level goes down very quickly when it starts taking over an hour hour and a half to count it's long overdue in my view that we have electronic voting methods that will work at the meeting I've seen it with clients before that were not in the condominium area where they get the results in seconds not an hour but in seconds so 2630 is proposing to say look if you have an electronic if you have a secret ballot requirement you will also be able to do an electronic use an electronic voting device and then it provides for an audit trail and a couple other things to make sure that we have some sort of protection but the electronic voting device today the technology is there to be able to use it and I believe that if we at least get the enabling legislation hopefully within the next few years property management companies homeowners associations will be able to take advantage of this technology in order to do elections and other voting quickly and more efficiently from my perspective I think you're right it's long overdue and so long as you build in the safeguards you know the device you got accurately flex your voting power so if you've gotten proxies or whatever it's accurate and if there's changes that's being updated automatically if you have enough safeguards built into it it seems to make sense to find an easy way with an audit trail we can count ballots quickly and make these meetings more pleasant yes definitely and I think as I said it's long overdue and I found that nobody walks out of four hour annual meetings happy but they sure do walk out happy when it's been 30 to 40 minutes people do like short meetings and doing the election doing it quickly, efficiently, accurately like that is something and having that audit trail is something that's going to help make these meetings much more productive is important because a lot of time people who weren't elected want to go see that was treated fairly and counted accurately and frankly I would bet that the technology is probably going to be more accurate than the human error that I see all the time because it gets complicated and some of these percentage of the common interest are five did five decimal places long you know and so it gets complicated yes the meeting last night was seven decimal or two nights it was seven decimal places that's a very difficult percentage if you haven't in the computer then you don't have somebody sitting there with an adding machine trying to add it up or making sure that they don't mess it up on a spreadsheet because you'll have it checked in advance and having that audit trail I believe prints out you know basically you got to protect the secrecy of that owner voting what can say this percentage voted for this this percentage voted for that and I think they can do it well in a way we do it now with our state elections you go in your sign in privately and they give you a ballot it may have a serial number for a lot of purposes you can actually translate who voted for who and you have to do an awful lot of work to do that but we're down to two minutes so give me a one-minute horror stir when you do this wrong okay the real horror stories that come out of annual meeting elections are when you find I call it the morning after you either get a call in the morning after or you were there and then you get the call in the morning after we're so sorry but the results that we announced last night are not the results of who got elected they got the terms messed up or it turned out someone should have been elected and wasn't elected those are the horror stories that come out generally speaking they blame the managing agent for it sometimes it's one person's fault sometimes it's a computer fault we don't know but what happens is in this case if they want to do a recount they actually have to do a special meeting for the purpose of authorizing that recount and then recounting so it's not a simple process but it does take some time and definitely cost association or a managing agent a lot of money to fix so that's the real horror story if you have any election there's any question about those numbers make sure they're checked and double checked before the meeting adjourns we don't want any hanging chads do no hanging chads thank you for being here you are one of my most fascinating and most enjoyable people I talk with because this is quite an interesting field and we're going to be doing in the future I've told you this before stories of horror stories of meetings or associations and what happens when you do things wrong and frankly how much are costs and so we're looking forward to having you back again I want to thank everybody for watching Kondo Insider we hope you find our show enjoyable we're trying to educate and help all of you understanding association business next week we have Jane Sugimura back legislature just went into session we have about 60 new bills affecting associations we're going to start talking about a few of those so again aloha and thank you for watching Kondo Insider