Well, our election went worse than I could have imagined

Our first "resident board" election was held, where our PM kept telling us for the first time we get to elect our own board. We've been waiting for this day for months.

When the votes came in, I was the top vote getter. We had a good board of people who have been doing the majority of the work over the last few years. Then, unfortunately, the PM pulled out a sheet of paper with a list of five names, with 150 votes for each name. These were our Declarant's votes for the unsold lots. Given the large number of candidates, whose votes were largely dispersed over all of them, the Declarant's candidates then became the new board, and I am out.

I had specifically asked the PM a year ago about this, and he had told me the Declarant's unsold lots did not vote in the board election. And they consistently sent messages suggesting that "we" would get to elect our own board. This sucks badly.

QUESTION
When the Declarant votes, does he still have to fill-out 150 ballots, or is handing them a list of names (he didn't show his face, of course) legal?

OP's Bylaw:

If the Declarant owns or holds title to one or more Lots, the Declarant shall have
the right at any meeting of the Corporation to cast the vote to which such Lot is entitled.

Delaware HOA statute:

Not later than 60 days after conveyance of 25 percent of the units that may be created to unit owners other than a declarant, at least one member and not less than 25 percent of the members of the executive board must be elected by unit owners other than the declarant. Not later than 60 days after conveyance of 50 percent of the units that may be created to unit owners other than a declarant, not less than 33 1/3 percent of the members of the executive board must be elected by unit owners other than the declarant.

Does the bolded part apply?

I see no value to arguing about the ballot the declarant completed.

Our bylaws:

The affairs of the Planned Community shall be governed by a Board of Directors known
as the Executive Board. Persons eligible to serve as members of the Executive Board are natural
persons who are designees of the Declarant, or Lot Owners. The Executive Board shall initially
consist of the three (3) persons named in the Declaration. The Declarant shall have the right, in
Declarant’s sole discretion, to replace all initial Executive Board members, and to select and
designate their successors and thereafter remove Executive Board members and designate their
successors from time to time, until not later than sixty (60) days after the conveyance of twenty
five percent (25%) of the Lots that may be created in the Planned Community to Lot Owners
other than Declarant(the “First Benchmark”). During the period from the First Benchmark until
no later than the earlier of (1) sixty (60) days after the conveyance of seventy five percent (75%)
of the Lots that may be created in the Planned Community to Lot Owners other than Declarant,
(ii) two (2) years after Declarant and any other declarants as defined in Section 81-103 (16) of
the Act have ceased to offer Lots for residential purposes for sale in the ordinary course of
business, (iii) two (2) years after any right to add new Lots for residential purposes was last
exercised, or (iv) the day the Declarant, after giving written notice to Lot Owners, records an
instrument voluntarily surrendering all rights to control activities in the Corporation (the
“Declarant Control Termination Date’), one (1) member of the Executive Board is to be elected
by the Lot Owners pursuant to Section 2 of Article II of these Bylaws and the remaining two (2)
members are to continue to be selected and designated by Declarant. Not later than Declarant
Control Termination Date, the Lot Owners must elect an Executive Board of five (5) members,
who must be Lot Owners, and at least one of whom must be a Legacy Owner. The Declarant
shall have no power to designate any Executive Board member after the Declarant Control
Termination Date.

Well, never mind that aspect. It does appear the law calls for "all Lot Owners other than the Declarant" in our first election, at the 25% benchmark. But in subsequent elections is says all "Unit Owners"; which is defined at including the Declarant for lots than have not yet been conveyed. So he has votes until the community is completely built out.

Still, it was crappy that the Property Manager deceived us this entire time. I had read the bylaws several times and always came away thinking the Developer did not vote in our elections.

It makes me wonder why we go through the charade of counting attendees at meetings for a "quorum." As soon as the developer joins the meeting we have a quorum.

There are two good results from tonight:

* The board is not bad. There are two bad apples, two very good ones, and one that could go either way.

* Dozens of people are already up in arms about this, and I believe it will give ammunition to those of us who would like to fire the property manager. People are appalled that they were lied to. Yes, we should read the bylaws. But given that we had been through two elections in the past, the PM had an ethical responsibility to explain the change for this election; as they were the administrator of the election.

The board can fire them tomorrow.

We actually parsed this out a long time ago in a different thread. It is horribly confusing. They key is that next week is Declarant Termination Date, so we are at this stage:

"Not later than Declarant Control Termination Date, the Lot Owners must elect an Executive Board of five (5) members, who must be Lot Owners, and at least one of whom must be a Legacy Owner. The Declarant shall have no power to designate any Executive Board member after the Declarant Control Termination Date."

As you mentioned, Delaware Statute says "unit owner" instead of "lot owner". It also says that the Declarant is a Unit Owner.

The 50% benchmark did not apply because we’ve only had three board members, so we gained no new members at that benchmark. At 25% we got our one and only board member until the 75%, which we hit now, and we got a brand new five member board. Elected by the Declarant…

Yeah, it’s confusing.

It's good to know you received so many votes, David, given all of the hard work you've put into your community. I'm thinking, though, that being off the Board for a while gives you a wonderful opportunity to observe how the new Board is progressing. You can join an informal positive alliance with the 2 good apples and try to bring around the 3rd unknown. Is one of the good apples a legacy owner?

Do your Bylaws call for staggered terms (or possibly DE statutes)? I'd hope so in which case there will be two openings in a year, I assume.

I guess, David, you feel confident that the election itself was carried out properly? Owners just sign a sheet of paper to cast their votes?

The board, as of tonight, is all homeowners. The developer has terminated control of the HOA. He will continue to have votes for each unsold lot. Transition is probably a couple years away.

I’m not on the board. However, three of the five new board members signed a petition to the developer last September begging him to fire the PM. And the board is about to get bombarded with homeowners screaming for the PM’s head. He told us for months that we would be electing our new board, and never mentioned the fact that the Developer might decide to step in and effectively overturn our choice. It can be logically argued that we should have known, but people feel deceived and angry.

We had all left the meeting tonight when one of the residents who counted the votes told us what happened, then thirty people went storming back in screaming that we had been lied to. It was ugly.

I don't understand why some of you say the board of directors cannot fire the property management company. The Declarant has terminated control of the HOA. Does he still somehow have veto power over the Board of Directors?

In fact, as I said earlier, three of the five board members already did conduct a search for new property managers, last summer. They did find one they felt would do a better job at a better price. And they did present a petition to the Developer to replace the PM. We already confirmed with out attorney that the new board is free to cancel any contracts immediately. Given all of this, and especially given the current outrage -- which I suspect will grown as the entire community learns what happened -- I do believe the new board might choose to act quickly. At the very least I believe they will begin a search so a new PM could start on January 1 of next year.

But my question is, why do you say we "cannot" fire the property manager? Contracts are signed by the board, not by vote of lot owners.

If the PM's current contract runs through January, you can still start the process in looking for another one. Well, actually, the board can, so you and your neighbors will have to keep up the pressure.

Then again, a starting project for this board would be to have a sit down with the PM and discuss concerns the community has about her job performance - don't make it personal, but review the contract and consider what he/she has done vs. what it requires. Keep in mind some people may be upset simply because she has the gall to actually do the job as written. If they don't like it (because she said something that WAS correct), their real beef would be with the developer who hired her, or the board if they decide to keep her. By the way, this also applies to you, so step back and look at this from a broader perspective if you have to.

From there, the board can develop a performance improvement plan and give the lady six months to prove herself. In the meantime, it wouldn't hurt to look around at other property management firms and see who has a decent reputation or not. If you find you want to make a change, you'll need to work with this property manager on a transition plan, send RFPs to other companies and review them, and then the board will make a decision. All of this may take longer than a year, so be patient.

And you think that the person who DOES have the 150 votes is going to put people in that aren't going to play ball. The PM was hired by the declarant who both have probably a long standing relationship, and they will see that no one messes with the powers to be until the declarant is out of the picture. That is just the order of things.

David, at this point I would advise you retreat and live to fight another day.

You cannot get what you want right now, and pushing for it, as you did in the past, only made matters worse. The developer will eventually leave. Perhaps bad decisions will be made in the interim, but most bad decisions can be fixed, or at least mitigated, by future board. Put things in perspective. No one is going to die over this.

I have had to deal with vendors that I could not fire for various reasons, and nearly gotten myself fired over it. I've learned my lesson. Deal with it as best you can, mitigate the results if you can, and wait until you have the ability to make a change.