Is Upgrading to Electronic Voting Worth the Hype?

By Holly Smith, CCAM

Beginning January 1, 2025, California Homeowner Associations (HOAs) may conduct electronic voting for director elections, recall votes and amendments to governing documents. However, voting on regular or special assessments remains excluded.

Implementation Requirements

HOAs must amend their election rules to include electronic voting provisions before adoption. Associations must also decide on a default voting method—either paper or electronic ballots—which determines whether members will opt in or out of electronic voting. For instance, if paper ballots are the default, members must opt in to vote electronically, and vice versa. This choice will streamline administrative processes for boards and management.

When deciding on a default, HOAs should consider the demographics of their community. Younger, tech-savvy families may prefer electronic voting, while 55 and up communities may be less receptive to new technology. Associations with frequent elections or uncontested races may find limited benefits from electronic voting.

COST-SAVING POTENTIAL AND CHALLENGES

Electronic voting is viewed as a cost-saving measure, but the Davis-Stirling Act introduces additional expenses. Associations must send a customized notice 120 days before elections, detailing electronic voting options and verifying member information. This requirement, combined with other notices, may increase mailing costs.

Dan Padou, in-house legal counsel for Pro Elections, LLC, suggests including a provision in election rules to ensure members opting for electronic voting receive all voting materials digitally, potentially reducing those costs.

Email Validation And Administrative Hurdles

A significant challenge is validating email addresses used for electronic voting. Abigail Padou, Chief Election Inspector at Pro Elections, LLC, highlights the need for accurate, up-to-date homeowner records. While some software offers basic email validation, associations may incur additional costs for large-scale validation services. If validation fails, members will default to paper ballots, which could cause frustration.

Participation Thresholds For Financial Viability

Research indicates electronic voting becomes cost-effective when 50 to 80% of members participate electronically, depending on the association. However, electronic voting is particularly beneficial for votes involving new governing documents, as distributing lengthy documents digitally can significantly reduce printing and postage costs.

ADDITIONAL PROVISIONS OF AB 1360 FROM DAVIS-STERLING

· Owners can choose between electronic or paper ballots and switch methods up to 90 days before an election.

· Annual statements must outline procedures for opting in or out of electronic voting.

· Voting lists must specify whether members vote electronically or by paper.

· Floor nominations are prohibited for electronic ballots; legal counsel should review governing documents accordingly.

· Election notices, including instructions for online voting, must be sent 30 days before the election.

· Electronic votes count toward quorum and are irrevocable once cast.

Pros And Cons Of Electronic Voting

Pros:

· Convenience: Voting from any device.

· Increased Participation: Easier access may boost turnout.

· Accessibility: Supports screen adjustments and audio ballots for disabled members.

· Accuracy: Reduces errors from poorly marked ballots.

· Second Homes: Voting is available globally.

· Potential Cost Savings: Decreases paper and mailing expenses.

Cons:

· Cybersecurity Risks: Vulnerability to hacking.

· Loss of Interaction: Reduces in-person engagement.

· Complexity: Hybrid voting methods can confuse members.

· Administrative Challenges: Managing the system is demanding.

Software And Security Considerations

California’s Davis-Stirling Act imposes strict requirements for electronic voting. When shopping for software for their company Dan Pardou noted that while many of the companies operating electronic voting in other states have been doing so for years, their software wasn’t going to comply with California’s requirements. Software needed to include maintaining audit trails, ensuring voter anonymity and separating voter identity from actual votes. Instead, Pro Elections, LLC developed proprietary software to meet these standards, prioritizing security and compliance.

Looking Ahead

Pro Elections, LLC plans to conduct its first electronic elections in April 2025. Many associations may wait to adopt electronic voting, observing cost impacts, participation rates and data management outcomes. Dan Padou said that potential clean-up legislative updates later in 2025 could further clarify the law.

Regardless of your HOA’s stance on electronic voting, now is the time to update election rules to prepare for future opportunities. Adopting new rules can be time-consuming, especially with restrictions on implementing changes within 90 days of the annual meeting. While updating rules doesn’t obligate the association to implement electronic voting, it ensures compliance with new election laws and keeps options open for the future. As the saying goes, “You don’t need it until you do,” but preparation keeps your association ready and adaptable.

Holly Smith, CCAM, is the Executive Director of Community Management at Desert Resort Management – an Associa Company and has over 20 years of experience in property management across Southern California.