Elections are so essential to a representative democratic government that the Department of Homeland Security has defined election infrastructure as “critical infrastructure,” as fundamental as roads, bridges and other public infrastructure.
Every spring, many homeowners’ associations (HOAs) including condominiums, especially those whose fiscal year ends on Dec. 31, are required to hold their annual meetings and elections — about which the Department of Commerce and Consumer Affairs states, “the owners’ most important role is electing directors,” even more consequential than paying association fees or following association rules.
While some owners attend those annual association meetings and vote in person, many use proxy forms that assign another to vote in their stead, creating the false impression that these owners are represented. False because the proxy forms provided by the property management companies that facilitate most association elections are “general proxies” that allow the proxy holder to vote however the holder wants.
Experience has shown that these proxies can be assigned even further, by the proxy holder to another designee, without the knowledge of the owner, creating an even greater distance between the owner of the vote and the one who casts that owner’s vote.
Despite this knowledge, property management companies and association attorneys testify to legislators that the use of proxies offers owners “free choice.” Demonstrating their preference for disengaged and absent owners as this arrangement makes their relationship with directors less accountable and more “efficient,” property management companies and association attorneys champion the use of proxies for electing directors.
But states with much larger numbers of homeowners’ associations, such as Florida, California and Texas, prohibit the use of proxy voting because of the potential for election fraud, and mandate ballot voting for the election of directors.
Indeed, owners’ scrutiny of our associations’ election records revealed “irregular” electoral processes that occurred primarily at the election facilitator’s level, usually the property management company as they engineer most association elections despite their pecuniary interest in the election results. Whether intentional, caused by human error, or due to sheer coincidence, nearly every “irregularity” in every step of the election process was revealed to slant in favor of re-electing incumbent directors.
Once elected, directors have tremendous latitude and power to operate the business of the association, having the authority to enter into contracts, spend association funds, adopt and enforce rules, and discipline owners and residents. The legal and financial implications of these elections have formidable consequences; thus, everything hinges on the integrity of the electoral process.
Legislators who allow and encourage condominiums and HOA housing development should recognize that current association election laws nurture owner disenfranchisement and detachment and enable fraud.
In the current legislative session, Senate Bill 2852, SD1 and House Bill 2272, HD1 are small steps toward modernizing condominium and homeowners’ association election rules and deserve support, while the intent of now-deferred measure HB 1651 was to eliminate corruption enabled by proxy voting.
More is demanded.
In 2020, Hawaii’s Office of Elections reported that of the record- breaking voter turnout in the general election, 95% of voting was done by mail-in ballot. Using that model and that of Florida, California and Texas, legislators should reform condominium and HOA laws to require owners to vote for board members by mail-in ballot if they cannot vote in person, obviating the need for proxies.
Further, legislators should discourage the facilitation of association elections by biased parties with interest in the outcome and should encourage the use of neutral professional third parties to oversee the electoral process to assure owners of the integrity of the election and that the results are honest.
For one-third of Hawaii’s residents, their associations are significant, so the truly representative character of these associations should be a principal policy goal of all legislators.
Lila Mower leads a 300-plus member coalition of condo and HOA owners, Hui Oiaio (formerly, Condo Owners Coalition of Hawaii).