HOA Elections: What's Cumulative Voting, and Should You Use It?
Most people don't even know what cumulative voting is and probably couldn't tell you if it's allowed in their state or their association. Here, we explain the procedure, discuss its pros and cons, and offer insight as to whether to change your bylaws to include or exclude it.
Cumulative Voting Defined
"Under cumulative voting, the number of votes each unit owner gets is based on the number of candidates available," explains Bob Tankel, principal at Robert L. Tankel PA in Dunedin, Fla., a law firm that advises associations. "If you have five candidates for your board and you vote for only one person, that person gets five votes. If you vote for two candidates, each gets 2.5 votes. That allows minority shareholders—which has nothing to do with race, gender, or religion but means people who disagree with the majority of the board—are assured access at the table. They can put all their votes toward candidates that agree with them, making it more likely they'll have representation on the board, even if it's not a majority.
In short, under cumulative voting, you can give your vote more weight than if your association didn't have cumulative voting. "If five people are running for my board and I get five votes," explains Duane McPherson, division president at RealManage, a San Rafael, Calif., association management firm that oversees properties in Arizona, California, Colorado, Florida, Louisiana, Nevada, and Texas, "I can throw them all to one person."
That's both the benefit and the curse of cumulative voting. The minority can use it to get a seat at the table, but the majority can also use it to stack the board with their candidates. "I've seen a community torn apart by cumulative voting," says McPherson. "One person went out and got as many votes as he could. Maybe 10 people voted for him, but he had the largest vote count, and it tore the community apart. It can really create dissention. I don't agree with it. I think it should be one person, one vote."
Brian Lincks, vice president of City Property Management Co. in Phoenix, which oversees 260 associations, agrees. "In my opinion, it's just a bad way to vote," he says. "It doesn't allow new people to be elected to be sure the direction of the community changes. In my experience, many times there's a correlation between cumulative voting and the association being broke because the same board has been sitting year after year. Here in Arizona, cumulative voting is abused, and it tends to lead to the same old people being elected who aren't opening their minds to fresh ideas to keep property values up."
Not Banned, But Not Favored
Some states, like California, expressly allow cumulative voting. Others, like Arizona, have banned it in some cases. "It was banned by the Arizona legislature in 2005," says Lincks. "But it still can be used where an association's governing documents were written prior to the change in the law and if the homeowners declare at a meeting that they're going to use it. If one person makes that declaration, other people at the meeting are also allowed to use it. However, property managers are teaching residents that it's out. Where I see it happen is in very old condos with documents written in the early 1970s, and some of the older folks are still hanging onto cumulative to keep their cronies on the board."
Still other states haven't banned the practice, but it's disfavored. Michigan falls into that camp. "There's no reason cumulative voting couldn't be used in Michigan," explains Mark Makower, a partner at Dickinson Wright PLLC, who specializes in association law in Bloomfield Hills, Mich. "Since the advent of condos and condo documents in Michigan in 1963, the first condo document in the state said cumulative voting wouldn't be allowed. For a period in excess of 25 years, people copied that document for real estate covenants. So it's become universal that association governing documents have contained a provision that says cumulative voting isn't allowed. That continues today, but most people who look at and understand cumulative voting recognize that it's probably best not to allow it because it could be used to do things like manipulate, keep control, and prevent new ides."
Florida law is slightly different but reaches nearly the same outcome as Arizona. "It's not allowed unless it's allowed," explains Tankel. "In Florida, you have to amend your bylaws to provide for cumulative voting."
Few associations in Florida have taken that affirmative step to adopt cumulative voting. "We manage 200 associations, and none have cumulative voting," says James Donnelly, president and CEO of Castle Group, a property management company in Plantation, Fla., that manages 55,000 association units. "It's not a best practice. Where it might come in handy is when you have a developer-controlled community, and you want to give rights to the minority. But not many developers would include cumulative voting for exactly that reason."
Minnesota follows Florida's lead. "It's addressed in Minnesota's Nonprofit Corporation Act, and it's presumptively excluded," says Matthew A. Drewes, a partner at Thomsen & Nybeck PA in Edina, Minn., who represents associations. "It's something that could be elected, and it would have to be specified in the articles of incorporation."
Like Donnelly in Florida, Drewes is unaware of any Minnesota associations that have adopted cumulative voting. "Because it's something that would have to be elected by the association," says Drewes, "it's likely to be quite rare, if it exists."
Should You Dump It?
What if your association has cumulative voting? Because it can be used to prevent new blood from being injected into your association's operations, the consensus is that you should strongly consider amending your governing documents to remove it. "It's a great ivory tower idea," says Tankel. "But in street law, the vast majority of associations I've dealt with are more concerned about getting enough people to run for the board instead of protecting minority shareholders."
"In mature associations," says Donnelly, "I think you'd want to remove cumulative voting."