An Election Handbook Designed to Dispel Distrust

A few years ago, Cody Masino, vice president of David Associates Real Estate Management, started noticing two startling trends in the co-ops and condos he manages. First, the demographics in the buildings were changing, as younger, tech-savvy buyers moved in, bringing high expectations (and sometimes fat wallets) with them. And second, even some of the savviest of those buyers were clueless about how board elections work.

“Most shareholders and unit-owners don’t truly understand how the process works – the proxy, the annual meeting, cumulative voting, plurality voting,” Masino says. “Some boards don’t even understand the process. Most bylaws share the same details, but there are some quirks. We wanted to educate our clients to the particulars of their election process.”

And so Masino prepared a generic, five-page handbook on co-op and condo elections that can be tailored to the specifics of any building’s bylaws – whether, say, the voting is cumulative or plurality, or what constitutes a supermajority.  The handbook, which goes out to all residents several weeks before the annual meeting, tells them to expect at the meeting: a review by the accountant of the annual budget and all ongoing or upcoming capital projects; votes on items that require approval by a supermajority; a chance for board candidates to address the meeting; and the election of directors.

The handbook also explains that a proxy deputizes a particular person to cast an absent shareholder’s votes, and that a quorum has been achieved, and a valid election can be held, only if more than half of the residents are present either in person or by proxy. (There are two types of proxies: a “directed” proxy specifies how the absent shareholder wants his or her votes to be cast, while a “general” proxy leaves that decision up to the person named on the proxy.)

Two common feelings that Masino is trying to dispel are distrust and a sense that people are being excluded from the electoral process. To this end, he starts laying the groundwork early.

“We have discussions months before the annual meeting,” Masino says. “We tell the board to send out a notice to find out who’s interested in running for the board. Right off the bat I know who’s interested.”

About a week before the official notice of the annual meeting goes out, a letter is sent to all residents that’s designed to “open up the election process.” Anyone interested in running for the board is asked to submit his or her name, with a resume or short bio, and return it to the management office by fax, email, or snail mail.

“They’re usually willing to provide a resume,” Masino says. “That’s helpful in keeping shareholders calm.”

At the annual meeting, the names of all candidates are printed on the ballot. People can still nominate candidates from the floor. “That way,” says Masino, “nobody will walk out of that meeting doubting, or feeling that the system is unfair.”

This system – a tailored, printed handbook augmented by advance solicitation of candidates – might sound like an iron-clad way to dispel dissatisfaction with the electoral process. But remember, this is New York City.

“Shareholders love it, but the reception among boards has been mixed,” Masino says. “I’ve actually had situations where boards didn’t want to use it. Why? That’s a question only a psychologist could answer.”