HOW CO-OP/CONDO BOARDS OPERATE — Simple Steps to Avoid Co-op/Condo Board Election Mistakes
Andrew P. Brucker in Board Operations for HABITAT magazine
When mistakes are made in co-op and condo board elections, the whole process can be tainted and litigation can result. That’s what happened in the case of Roberts v. WVH Housing Corp.
WVH, a New York City cooperative, has a seven-member board, and at the 2021 election four positions were open. Shareholders were able to vote in person, by proxy, by directed proxy or by online ballot. The entire process was administered by MK Elections, and a few hours after the meeting, this contractor emailed the official results to the candidates and all shareholders.
The board president, Julia Rosner, reviewed the results and recognized something was wrong. Although she had tendered 65 undirected proxies from shareholders to MK Elections and had received ballots for voting, she realized she had inadvertently neglected to cast the ballots.
The day after the election, Rosner handed MK the ballots she still had in her possession. When MK recalculated the results, three of the four announced winners had lost, and other candidates were elected. Initially, the board was inclined to accept the new results from MK, but there was resistance from a number of the directors. Looking to quell any controversy, the board decided that a new election should take place, and it sent out notices to that effect. However, two shareholders opposed this and took the matter to court, asking that the candidates originally announced as winners be allowed to take their seats, and a new election be prohibited.
The court found that the “the election should only be set aside where it is so clouded with doubt or tainted with questionable circumstances that the standards of fair dealing” require it to take action. The court held that no such doubt or taint had been established at the WVH election. A mistake in voting is not considered an impropriety.
This is consistent with the position of numerous New York courts, which have held that there can be no change once the polls are closed and the winners are announced. If a mistake is noted the next day, the announced results cannot be changed, and the court will not intercede.
The reason these disputes happen is the rush to announce the results the evening of the annual meeting. This is asking for trouble. In many cases, if there was a simple comparison of the number of shareholders who signed in (either by proxy or in person) and the number of ballots, discrepancies might be discovered before it’s too late. Perhaps an adage should be created just for elections at cooperatives and condominiums: Check twice, announce once.
Andrew P. Brucker is a partner at the law firm Armstrong Teasdale. The statements and views in this article are his own and not necessarily those of the firm.