Chapter 7 - § 7.5 • ELECTING THE BOARD OF DIRECTORS

• Jurisdiction: Colorado

§ 7.5 • ELECTING THE BOARD OF DIRECTORS

Under the CCIOA, no later than termination of any period of declarant control, the unit owners must elect a governing board whose members take office on election.⁴⁹ The Act also provides that, in addition to complying with the applicable provisions of either the Colorado Business Corporation Act or Colorado Revised Nonprofit Corporation Act, the bylaws must provide for the manner of electing board members and of filling vacancies.⁵⁰ Thus, under the CCIOA, it appears that while the initial board after the end of declarant control must be elected by the unit owners, the bylaws may provide some other means of election, perhaps selection by the sitting board members. However, the Act also prohibits the board itself from electing the members of the board.⁵¹ Therefore, the unit owners seem to be the only ones left who could elect the board, although the phrase "manner of electing" would appear to leave room for a selection by a nominating committee. In practice, the question is academic because almost all common interest community bylaws grant unit owners the sole authority to elect board members, almost always at the annual meeting. That is the "default" position of the Nonprofit Corporation Act, which provides that if no method of election, appointment, or designation of directors is stated in the bylaws, and the corporation has voting members — as a common interest community would⁵² — the directors, other than the initial ones, must be elected by the voting members at the annual members' meeting.⁵³

The CCIOA allows the declaration to provide for class voting on specified issues affecting the class (including the election of the governing board)⁵⁴ and for cumulative voting for electing members of the governing board.⁵⁵ The Nonprofit Corporation Act allows for three other specific means of voting for election of directors, or for any "reasonable" method provided in the bylaws.⁵⁶

The Nonprofit Corporation Act provides guidance not found in the CCIOA on the mechanics of vote counting. If an election is held for multiple directors, the number of candidates that equal the number of directors to be elected who have the highest number of votes cast in favor of their election are elected to the board; however, when an election is held to fill only one position, the affirmative vote of a majority of members constituting a quorum at the meeting is required for election.⁵⁷

A frequent problem in common interest communities is that when the owners vote on controversial issues or there is a divisive contest to choose members of the governing board, questions are raised about the validity of ballots or proxies. Both the Nonprofit Corporation Act and the CCIOA have statutes that address the issue. Under the CCIOA, a proxy is not valid if obtained through fraud or misrepresentation and, unless otherwise provided in the declaration, bylaws, or rules of the association, appointment of proxies may be made substantially as provided by the applicable Nonprofit Corporation Act statute.⁵⁸ A unit owner may not revoke a proxy given pursuant to the CCIOA except by actual notice of revocation to the person presiding over the association meeting. A proxy is void if it is not dated or purports to be revocable without notice.⁵⁹

Under the Nonprofit Corporation Act, if the name signed on a "voting document"⁶⁰ corresponds to that of a member, then the corporation, if acting in good faith, may accept the document and give it effect as the act of the member.⁶¹ Even if the name signed does not correspond to that of a member, the corporation, if acting in good faith, may accept the document and give it effect as the act of the member under...