One vote can be the difference between an increase in HOA fees, a replacement of a board member, or a capital improvement to increase individual home values. While voting is an important privilege and responsibility, by which homeowners can influence the future of their neighborhoods, voting is not always convenient. A proxy vote can bridge the gap for a member who cannot physically attend a meeting to cast a vote in the absent member’s stead. Since both good and evil can be yielded with the proxy instrument, HOA and COA managers should become familiar with proxy voting. Here are five things HOA and COA managers need to know.
- A proxy is most often used to establish a quorum. Boards often rely upon the collection of proxies to fulfill the quorum requirement at the annual shareholders meeting or any special meetings, but may not use them at board meetings. The Cooperator explains statutory law and most association by-laws stipulate that no official business (including board elections) may be conducted without the presence of a quorum, which usually consists of a majority of outstanding shares or common interests, in person or represented by proxy.
- A proxy must be granted in the HOA or COA bylaws. States may differ on how the proxy can be used, but the bylaws must include proxy requirements and identify which type of proxies are permitted—general or limited. A proxy holder (the person voting in place or on behalf of the member) operating outside of the type of proxy granted in the HOA or COA bylaws can nullify the vote.
- A proxy is implemented through a legal document. As such, essential elements of a proxy are key to incorporate. Robert Galvin, a partner at Davis, Malm & D’Agostine PC in Boston, recommends a proxy note the time and date of meeting, the names of candidates and lines for write-in votes, and The form should also state, ‘I hereby appoint [the name of the manager or a board member] as my proxy to vote on my behalf.’ In addition, Galvin permits “the unit owner can cross out the name of the proxies—or the people who are going to appear at the meeting and vote—and appoint anyone. But the proxy has to come to the meeting.”
- A proxy can be confusing, even misused. Sometimes homeowners return a completed proxy, thinking they have cast their vote properly. However, proxies are not ballots. Elizabeth White, shareholder and head of community associations practice at LeClairRyan law firm in Williamsburg, Va., explains this confusion or misuse of proxy voting can result in the unintentional loss of a vote, especially in states where mail-in ballots are not permitted.
- A proxy can be hijacked for political agenda. Parli.com identifies a potential problem with proxies is that one person can collect many proxies, and if they are general proxies, can influence the outcome of the vote.
Editor: Shalon Clevenger, HOA Management Consultant