Voting question

Our HOA has a standing rule in our by-laws that states that we can suspend the voting rights of anyone who is in arrears of their yearly assessment. If homeowner 1 is in arrears and attends a meeting and brings proxies with him are those proxies null? My concern is that homeowner 2 who may not be aware of the current situation of homeowner 1 may give a proxy and then it not be able to be voted. Therefore, homeowner 1 who IS in good standing and who should be able to cast a vote will not be counted because he erroneously trusted homeowner 2.

These are two separate things.

The proxies will have to be reviews to see if the member who sent the proxy has valid voting rights. If they do, then the proxies are valid and a ballot should be given to the proxy representative.

If the representative is a member who is not allowed to vote, as a member, they won't get a ballot. However, they are still allowed to be a proxy representative and cast ballots for those he/she represents and should be given ballots for any valid proxies that indicate them as the proxy representative.


Although your concern is a good one to have, it is not something to be concerned about.

I have a question.

If a homeowner is not allowed to vote because they are in arrears of their assessement, goes around collecting proxies from 19 homeowners and votes for a candidate, group of candidates or an issue the way they would have IF they were allowed to vote, does anyone see something wrong with that. If your voting rights are suspended, it should be across the board.

Richard,

In my opinion, the proxy issue is a can of worms. Are these limited proxies or general proxies or, both? This may not help to you now but I the By-laws scould/should limit a number of proxies one member can collect. You could also consider amending the By-laws and elect directors by absentee Ballots instead of proxies.

I think the Annual meeting Notice should explain any additional rules that apply to proxy voting and reinstate those in the By-laws. Most people, including the board members, are not always clear on correct voting procedures and who is not eligible to vote.

Should Notice to the membership state that certain delinquent owners will not be able to vote unless they pay-up by such and such date? (Oops)

Please if you could give me a web sight for HOA laws an/or corporate laws so I can find out more answers

Wendy...you may also want to check your state regs...being you are a neighbor of ours Kansas recently passed a law that does not allow HOA's to suspend certain voting rights even if they are in arrears. So even though our docs say we can the state law trumps us when it comes to certain voting issues

That's exactly why some people are against proxies.

First, proxies exist in corporate law in many states. The original idea is that a stockholder in a corporation is allowed one vote for each share of stock. If you own 100 shares of General Motors, for example, you are entitled to cast 100 votes when it comes time to vote for directors to be on the board, or to vote on any other issue that may come before the stockholders at the annual meeting. Since many stockholders are not able to attend the annual meeting, they may wish to send a proxy. Normally, a person completes the proxy form and mails it to the secretary, who casts the votes for the stockholders sending in their proxies; but you could send a representative. Why a proxy? Because, all the questions to come up (under new business) may not be known before the meeting takes place, so absentee ballots won't work. The proxy allows you to have someone represent you at the meeting to vote for you.

Since many HOAs are incorporated, they inherit proxies from corporate law. Some states may allow certain types of corporations to prohibit proxies in their articles of incorporation or bylaws; other states may not.

You can't deny a person who holds a valid proxy the right to vote the proxy, because you are not denying THAT person the right to vote, you are actually denying the person who issued the proxy, who IS entitled to vote, the right to vote, and you can't legally do that.

Yes, it is true that if the proxy is an "undirected" proxy, the holder of the proxy (the representative) may vote any way he chooses, even for his personal choices. However, the issuer of the proxy can direct how the proxy is to be voted, thus requiring the representative to vote the the way the issuer wants.

Bruce

God forbid we confuse corporations with (most) HOA's.

Got that backwards. With no quorum it means who ever shows up to a meeting can conduct business, be it a handful of people or even 1 or 2 people. It allows a couple of people to run roughshod over the whole community.

We're commenting at the same time. I corrected my comment.

WendyB2 wrote that “Our HOA has a standing rule in our by-laws that states that WE CAN suspend the voting rights of anyone who is in arrears of their yearly assessment.

Note the WE CAN - Suspension of voting rights is not mandatory or automatic.

Documents that I am familiar with often state:

“The Board shall have the right to impose the Sanction of limiting or prohibiting voting and” - “any Sanction shall be imposed by the Board only after a meeting of the Board at which a quorum is present, duly called and held for such purpose.

Also, as others have posted we could probably answer better if we knew how the Proxy in question is worded and whether it is a “general proxy” or a “directed proxy”?.

Wendy,

Would you post the wording of the Proxy that you are asking about - leaving out any identifying names or information. And also the wording of your By-Law rule that allows suspending voting rights.

Good luck. I hope there are no unforeseen and unintended consequences in the future.

Richard,

It's impossible to give you specifics because neither of us have the ability to predict the future. If we all had crystal balls there would be no such thing as "unforeseen and unintended consequences." That's why we put safeguards in place; to minimize the likelihood of something happening that we didn't count on and that we don't like. Because you can't imagine what it could be doesn't mean it is impossible for something to go wrong.

You don't plan on having an automobile accident and you're a very careful driver and are pretty good at watching for others on the road, yet you carry automobile insurance. You don't plan on having a fire, and again you're very careful, but you have homeowners insurance. Yet, by eliminating the quorum requirement you've eliminated an important safeguard. According to Roberts Rules, "The requirement of a quorum is a protection against totally unrepresentative action in the name of the body by an unduly small number of persons."

Perhaps nothing will go wrong as long as you live there, or perhaps even in your lifetime. Yet, it only takes one instance for something to happen that could have been prevented by having a quorum requirement that will make someone regret not having one. I tend to believe an ounce of prevention is worth a pound of cure. Remember Murphy's Law: If something can go wrong, it eventually will.

Does your D&O insurance carrier know you don't have a quorum requirement? Do your mortgagees know you don't have a quorum requirement? Doesn't Davis-Sterling 1355.5(d) require a quorum?

Bruce

BTW, when we renewed our insurance, we gave the agent our CCR's Rules and Bylaws, so yes, they knew our quorum was changed. Besides it would have no bearing, I have already asked.

The agent might not care but the D&O underwriter might because if their procedures increase the risk of a legal claim it could affect the policy in some way.