Director Elections in HOAs (i.e. Welcome to the Wild, Wild West)

An increasing number of homeowners’ associations are adopting a two-notice, advance-nomination process for electing directors, similar to the election procedures statutorily dictated for condominium associations. Yet with many HOAs still operating with governing documents drafted by the developer, it is not uncommon to hear about situations where an association is running its condo-like election based on past practice rather than the procedures set forth in its governing documents. As a result, we are often asked whether homeowners’ associations can continue with their “practice” of employing a two-notice, condominium-esque election, despite any lack of language in their governing documents permitting the same.

Chapter 720, Florida Statutes, the Homeowners Association Act (the “Act”) states in Section 720.306(9) that elections of directors must be conducted in accordance with the procedures set forth in the governing documents of the association. Therefore, if the association’s governing documents do not allow for candidates to be nominated in advance of the meeting but the association has routinely employed such a practice, must the association still accept nominations from the floor?

The Act provides that a member may nominate himself or herself as a candidate for the board at a meeting where the election is to be held; provided, however, that if the election process allows candidates to be nominated in advance of the meeting, the association is not required to allow nominations at the meeting.

According to the Act, a homeowners’ association is allowed to forego nominations from the floor at the election if its governing documents (declaration, articles of incorporation, and bylaws) require nominations in advance of the meeting and do not require nominations from the floor. That much is clear. What remains the topic of debate in the “wild, wild west” is whether an association can forego nominations from the floor pursuant to Section 720.206(9), Florida Statutes where the association’s governing documents are silent with respect to nominations but the board of directors has adopted election procedures allowing for nominations in advance or where the association has a “past practice” that allows for nominations in advance of the meeting.

There are several arbitration decisions from the Florida Department of Business and Professional Regulation (DBPR) that have addressed this issue. Some arbitrators construed Section 720.306(9)(a) as allowing a homeowners’ association to forgo nominations from the floor only if the governing documents establish a process for nominations to be made prior to the election. These cases generally state that board-adopted procedures, like allowing nominations prior to the meeting which are not incorporated into the governing documents, are insufficient to negate the general statutory requirement for nominations from the floor. In fact, there is at least one arbitrator who ruled that even if an association provided in a first notice of the annual meeting that candidates must submit their names by a date certain in advance of the meeting, nominations from the floor should be accepted because the advance-nomination requirements were not contained in the governing documents. The arbitrator reasoned that because the annual meeting notice prepared by a board could change from year-to-year, the nomination process should be contained in the governing documents so that there is a level of certainty.

While there is at least one arbitration case which conflicts with this line of reasoning, homeowners’ associations should exercise caution before requiring nominations in advance of an election unless the requirement is clearly set forth in the association’s governing documents. If your association is set on continuing its practice of requiring candidates to submit nominations in advance of an election, make your path through the wild, wild west less “wild” and talk to your association’s attorney about amending your governing documents to match your practice.