Homeowners associations must choose their leaders through a process known as the HOA board elections. Elections typically occur every year at the annual membership meeting. In Maryland, there are certain requirements and procedures that associations must follow.
What are HOA Board Elections?
Every HOA or condo association is governed by a set of volunteers known as the HOA or condo board. Homeowners nominate and vote for these board members through an HOA election of officers.
State laws and the association’s bylaws dictate the requirements for board elections. Communities must adhere to these requirements or risk invalidating the election altogether.
When Should HOA Elections Take Place?
The election of HOA board members typically takes place every year at the annual meeting. It depends on the bylaws of the association. That said, Maryland law sets forth specific requirements for the very first election following the end of declarant control.
Under Section 11B-106.1 of the Maryland HOA Act, an HOA must hold its first official election once the community reaches a particular stage of development. The general rule is that an election meeting must take place within 60 days after 75% of all possible lots are sold to the public for residential use.
Some governing documents may allow elections to happen earlier, using a lower percentage of sold units as a trigger. In that case, the HOA must still hold the election within 60 days once it reaches the threshold. This ensures that homeowners gain control of the HOA on time.
Guidelines for an HOA Board Election in Maryland
How are HOA board members elected? In Maryland, there are some provisions worth noting in accordance with Section 11B-106.1 of the HOA Act.
Notice to Homeowners
An HOA shouldn’t expect homeowners to participate if they don’t inform them ahead of time. Before the election meeting, the developer (often called the declarant) must send out notice to every owner. The notice must state that the threshold has been met and provide the date, time, and location of the election meeting.
This step ensures that every owner has a fair chance to attend, nominate candidates, and cast votes. Skipping or mishandling the notice requirement can create disputes and open the door to legal challenges.
For all other elections after the initial one, the association’s bylaws typically dictate notice periods and requirements. Boards should refer to this document for guidance.
HOA Election Process Requirements
Beyond timing and turnover, the law also addresses how the election itself must take place. Here are some HOA board election rules to remember:
- HOA Board Nominations. Owners must have a chance to nominate candidates for the board fairly and openly.
- Ballots. Election ballots must be clear, properly formatted, and accessible to all eligible voters.
- Proxies. If the HOA allows proxy voting, the rules for issuing, collecting, and counting proxies must match what the governing documents say.
- Quorum. The HOA must meet a quorum, or minimum level of owner participation, to render the results of HOA board elections valid.
End of Declarant-Appointed Board Members
Developers typically control the HOA in the early stages of a community. They appoint the initial board members and make decisions until enough homes are sold. Once the official election meeting takes place, those declarant-appointed board members lose their authority.
Under Maryland law, their terms end 10 days after the election meeting if new directors are elected. This marks the official transfer of power from the developer to the homeowners.
Declarant’s Turnover Obligations
The transition is more than just switching out the board members. Within 30 days after the election, the developer must hand over everything the HOA needs to function. This includes a long list of property, records, and financial accounts, such as:
- Deeds to all common areas;
- Governing documents, plats, restrictions, and bylaws;
- All minutes of board meetings;
- Complete financial records from the HOA’s creation, including budgets, actual expenditures, and reserve reports;
- Contracts, warranties, and insurance policies;
- Member rosters with addresses and lot information;
- Assessment records, violation notices, and correspondence; and,
- Architectural plans and repair documentation for common areas.
In addition to this, the funds transferred must include adequate reserves. By law, these reserves must match at least the level recommended in the HOA’s most recent reserve study. This requirement ensures that new boards have sufficient funds for future repairs.
Contracts Made by the Declarant’s Board
Developers often sign contracts on behalf of the HOA before owners take over. Some of these agreements may not serve the long-term interests of the community. Because of this, Maryland law gives the new, owner-controlled board the right to cancel specific contracts.
New boards may terminate contracts that deal with finances, maintenance, or services within 30 days of giving notice. The board does not have to pay penalties for ending them.
That said, there are some exceptions. Utility and communication service contracts don’t fall under this rule. This means they remain in effect even after turnover.
Remedies for Disputes Over HOA Board Elections
Not every election goes smoothly. If a board ignores the proper procedures or violates the HOA’s governing documents, homeowners have a few options for remedies.
Section 11B-115.1 of the Maryland HOA Act allows homeowners to file a complaint with the Division of Consumer Protection under the Office of the Attorney General.
Disputes may involve failures such as:
- Improper or missing notice of the election meeting
- Mishandling of nominations
- Use of flawed or misleading ballots
- Incorrect use of proxies
- Failure to establish a quorum
What to Know About Condo Board Elections
The Condominium Act governs condo associations in Maryland. Section 11-109 covers elections, but associations must also refer to their bylaws for guidance.
Nominations
Here are the key provisions for nominations under the Maryland Condominium Act:
- Unless the bylaws say otherwise, any unit owner can nominate themselves or another person to run for the board.
- Associations must send a “call for nominations” at least 45 days before the election notice goes out.
- Only nominations made at least 15 days before the election notice will appear on the official ballot.
- Associations must list candidate names on the ballot in alphabetical order, with no favoritism shown.
- Owners can still make nominations from the floor during the actual election meeting.
Election Materials
Any election materials prepared and paid for with condo funds must also list candidates alphabetically. Moreover, these materials can’t show a preference for one candidate over another.
Voting Rules
Unless the bylaws set a different standard, decisions are made by a majority vote of the owners who are present and voting at the meeting.
Timing of the First Owner-Controlled Election
Associations must hold a board election within 60 days after either:
- Units representing 50% of the total condo votes have been sold to the public for residential use; or
- A smaller percentage, if the declaration or bylaws specify one, has been sold.
Before this meeting, the developer must notify all unit owners that the threshold has been reached. This notice must include the date, time, and location of the election.
After electing new board members, any developer-appointed board members lose their positions 10 days after the election.
For the Benefit of Everyone
HOA board elections are more than just an annual event. They ensure good governance and continued operations for the community. Associations should follow proper procedures according to Maryland law and their bylaws. In doing so, they can avoid liability and secure the long-term success of their association.
Majerle Management, Inc. provides enforcement assistance to HOAs and condo associations in Maryland. Call us today at (301) 220-1850 or contact us online to get started!
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