How long is a proxy good for…………

Started by CharlesW1 • 19 replies • 3511 views

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CharlesW1 (Georgia)
Posts: 826

Posted:

I will try to keep this short. I value the opinions I have received in the past. You all have provided me, as well, as other BOD, that turn to the discussion forum for advice; many of us “newbies” are not familiar with HOA dos and don’ts.

I would like to know how long a proxy in “good for”? I have heard 12 month, 15 months, I am very uncertain. I would like to know the facts. I live in Georgia. I’m not sure if it will make a difference or not. (Proxies are valid in the state of Georgia)

At the election of the current board quorum wasn’t established. I turned to this discussion forum to vent my frustrations. I and the now president decided to go door to door and ask HO for their proxy. Explaining to them what they were doing and why. Assuring them that in the event they do make an appearance the proxy will be invalid.

It was a lot of hard work and extremely time consuming, but quorum was established with more than enough including the proxies we had gathered.

I’ve heard and have been warned that we (the current board) may have to solicit for even more proxies to establish quorum for the POA meeting at the end of the month. Our documents state 25% of eligible homeowners are required to establish quorum.

I’m confused. Our documents state that quorum is established with 25% of eligible voters, either by proxy, ballet or in person. Our POA meeting is being held on March 27th. The documents state that quorum (25%) is required. Maybe I’m just thick here.

We are a community of 275 homeowners and about 140 are current of their assessments, which would entitle them to vote, fore or against “opt-in” to a POA. Our documents state that 2/3 of (eligible votes) to approve or disapprove such proposal is required, once quorum has been established, to even purpose the POA to homeowners.

Hypothetically, let’s say 50 (probably not the case) people attend and the majority of those that attend are couples. Who are also eligible to vote (one vote per household, per our by-laws), which would be 25 votes toward establishing the 35 required to met quorum. Using this particular scenario would we need 10 more proxies or 10 more eligible members to make an appearance, before we could even have a meeting? This is where I need the clarification.

According to our governing documents we need 25% of eligible voters to establish quorum, which would be 35 (eligible) homeowners. I wanted to confirm with all of you that my thinking and my math “skills” are correct. If quorum isn’t established, would it matter if every vote turned in was fore the POA, all 25 say they would have voted fore it, but since quorum wasn’t establish “I couldn’t vote” Can this be done? What could we do to avoid this from happening, anything?

Sorry for such a long post. I hope I have been explained my particular predicament as clearly as possible.

Thanks as always
Chuck W.

Charles E. Wafer Jr.

RogerB (Colorado)
Posts: 5,067

Posted:

Charles, in Colorado I believe a corporation's proxy is good for 11 months. However, By-laws often restrict to less time and often the proxy is identified as good only for that specific meeting and any continuation of a meeting which must be adjourned (for lack of a quorum or must be extending beyond alloted time). So if your By-laws are silent on this then check GA corporation information and use this to guide your incorporated HOA.

CharlesW1 (Georgia)
Posts: 826

Posted:

Quote:

Posted By RogerB on 03/22/2007 6:58 AM
Charles, in Colorado I believe a corporation's proxy is good for 11 months. However, By-laws often restrict to less time and often the proxy is identified as good only for that specific meeting and any continuation of a meeting which must be adjourned (for lack of a quorum or must be extending beyond alloted time). So if your By-laws are silent on this then check GA corporation information and use this to guide your incorporated HOA.

RogerB

I’ll try looking for “GA corporation guide”, now. What you said makes sense, that if an eligible to vote HO, gives the board the opportunity to vote on their behalf it should only be valid for that particular voting, not for any votes they would be otherwise unaware of.

Thanks
Chuck W.

Charles E. Wafer Jr.

JoeW1 (New York)
Posts: 728

Posted:

CharlesW1 - I believe the duration of proxy is 11 months as well. However, don't worry about the duration of proxy, you went door to door and look at the good result!!

Below are my responses to your quotes:

Quote:

Posted By CharlesW1 on 03/22/2007 6:43 AM

"At the election of the current board quorum wasn’t established. I turned to this discussion forum to vent my frustrations. I and the now president decided to go door to door and ask HO for their proxy. Explaining to them what they were doing and why. Assuring them that in the event they do make an appearance the proxy will be invalid.

I’ve heard and have been warned that we (the current board) may have to solicit for even more proxies to establish quorum for the POA meeting at the end of the month. Our documents state 25% of eligible homeowners are required to establish quorum."

In answer to the above, the proxies you collected for the election can not be used for the POA.

Quote:

Posted By CharlesW1 on 03/22/2007 6:43 AM

"We are a community of 275 homeowners and about 140 are current of their assessments, which would entitle them to vote, fore or against “opt-in” to a POA. Our documents state that 2/3 of (eligible votes) to approve or disapprove such proposal is required, once quorum has been established, to even purpose the POA to homeowners."

In response to the above, "to even purpose the POA", it seems by what you wrote, that there are two components to your POA conversion. First establish quorum and get a 2/3rd's vote to PROPOSE the POA conversion. Second to hold a Special Mtg. to conduct the POA conversion vote. Is this the case?

If so, sounds like a lot of red tape, but that procedure has merit because it would prevent a minority from proposing something to the community.

Quote:

Posted By CharlesW1 on 03/22/2007 6:43 AM

"Hypothetically, let’s say 50 (probably not the case) people attend and the majority of those that attend are couples. Who are also eligible to vote (one vote per household, per our by-laws), which would be 25 votes toward establishing the 35 required to met quorum. Using this particular scenario would we need 10 more proxies or 10 more eligible members to make an appearance, before we could even have a meeting? This is where I need the clarification.

In response to the above, the HOA should establish if quorum is 25% of 275 or 25% of 140 (those in good standing). If quorum is a fixed number of 275 owners, than 69 owners must attend the meeting by person or proxy. If quorum is out of 140, than 35 owners must attend the meeting by person or proxy.

Though there are differences in opinion on quorum. I'm inclined to think quorum is only of those in good standing.

In your scenario of HOA to a POA, is a majority 2/3r'ds of 275, or 140? Majority is 2/3rd's of those in good standing or 105 owners by person or proxy. However, I believe it's always wise to use the higher threshold to pass something regardless as to good standing or not. God help the association if there is ever a dispute on a member's status (good standing, not good standing), especially on something as important as amending the HOA to POA. An owner may make claims they were denied an opportunity to vote.

So in order to hold the meeting you need quorum of 35 owners or more by person or proxy. You then need a 2/3rd's majority in person or proxy to vote in favor of the POA conversion.

Quote:

Posted By CharlesW1 on 03/22/2007 6:43 AM

If quorum isn’t established, would it matter if every vote turned in was fore the POA, all 25 say they would have voted fore it, but since quorum wasn’t establish “I couldn’t vote” Can this be done? What could we do to avoid this from happening, anything?"

In response to the above, the only thing that matters is the result of a vote tally. 25 may say they voted for the POA, however you need more than 25 owners to get it passed. You either need 105 owners or 206.

You can probably count the votes of the 25 until you establish quorum.

You've been at this whole POA conversion thing for some time with difficulty getting quorum and getting it passed. IMO, the majority has voted against the POA by not participating. It's never good to rule by apathy but at some point you may have to let the POA conversion go. Win the war, not the individual battle.

CharlesW1 (Georgia)
Posts: 826

Posted:

JoeW1

Joe, I always appreciate your insight (opinions) you have with the many different HOA issues that are posted to this discussion forum. I’m trying to avoid going door to door soliciting for proxies. I’m aware that it will produce the results I’m looking for, but I also know I will be the only one interested in doing it.

You said, “In response to the above, "to even purpose the POA", it seems by what you wrote, that there are two components to your POA conversion. First establish quorum and get a 2/3rd's vote to PROPOSE the POA conversion. Second to hold a Special Mtg. to conduct the POA conversion vote. Is this the case?”

I believe I know what you are asking. This meeting on the 27th is to educate and to inform homeowners why being a POA appose to an HOA will be beneficial all that live or sell in their community. If all does well, quorum is established, and homeowners feel comfortable signing fore or against the amendments that would be a great start, to a long road. I don’t expect homeowners to make an educated decision before being well-informed at this meeting. That is one of reason the board decided to mail the packet of POA information a week ago, allowing plenty of time for homeowners to formulate their thought into questions. We hope to clarify much of the hesitation that many of these homeowners will likely have.

“Though there are differences in opinion on quorum. I'm inclined to think quorum is only of those in good standing” I believe it to be the same, I’m glad to see we agree.

“In your scenario of HOA to a POA, is a majority 2/3r'ds of 275, or 140? Majority is 2/3rd's of those in good standing or 105 owners by person or proxy. However, I believe it's always wise to use the higher threshold to pass something regardless as to good standing or not. God help the association if there is ever a dispute on a member's status (good standing, not good standing), especially on something as important as amending the HOA to POA. An owner may make claims they were denied an opportunity to vote.”

From what I’ve been told by the (PM, and President of the HOA), the majority is 2/3r’ds of eligible voters (in good standings).Currently is 140.

Good point. I think that would be a wise decision on our part, to “shoot” for the higher threshold as well. Thanks, for idea!

You and I may not see eye to eye on all the different HOA issues. I would like to clarify a few things for you and any other readers.

This is our first effort in educating the community about the POA “conversion”. I feel it would be a disservice to the community, in which I volunteer, to be a part of “if” the POA didn’t even get voted yah or nay, because quorum wasn’t establish.

On the 27th, if quorum is met and after the meeting members still say NO! As much as it would be a “tuff pill to swallow” I would be willing to except that, but until then I will continue to press the issue to homeowners every opportunity I’m presented with.

Thank you once again
Chuck W.

Charles E. Wafer Jr.

JoeW1 (New York)
Posts: 728

Posted:

CharlesW1,

You wrote, "...I feel it would be a disservice to the community, in which I volunteer, to be a part of “if” the POA didn’t even get voted yah or nay, because quorum wasn’t establish.".

In response, you must attain an established quorum to vote. Without a quorum a vote cannot effect an outcome, amendment, resolution, etc. That's very important for you to understand.

That aside, does the notice of the meeting on March 27th call for a vote? It might not, which may not be problem. However if at the March 27 meeting you get whatever your HOA feels quorum to be, the President may be able to call for a vote then and there. I repeat, may be able. Read up on your by-laws about the President's discretion on taking a show of hands of those present as a vote. In my HOA, the Pres can do this.

PaulM (Pennsylvania)
Posts: 1,347

Posted:

Charles:
How was your meeting on 3/27 to promote moving to a POA?
Did you reach quorum and then have a valid vote?

After all your personal hard work and energy to promote a change to POA, what is the status? We would be interested to know how it went and if you now have the go ahead to change the docs and officially record as a POA.

CharlesW1 (Georgia)
Posts: 826

Posted:

Quote:

Posted By PaulM on 03/30/2007 1:49 PM
Charles:
How was your meeting on 3/27 to promote moving to a POA?
Did you reach quorum and then have a valid vote?

After all your personal hard work and energy to promote a change to POA, what is the status? We would be interested to know how it went and if you now have the go ahead to change the docs and officially record as a POA.

PaulM,

Great memory! I have been so busy lately I haven’t had much time to give you all any updates.

The meeting was very informative, to those who attended, IMO. I did learn a couple things. One was the proxy we included was basically going to be invalid once the meeting had ended.The meeting was certainly needed. It cleared up a lot of confusion and any misconceptions that homeowners may have had. We had a much better turn out than past meetings. I’m not sure if it was because of the importance,(doubtful) time, (evening) date, or even “just because”.

The ballot, enclosed in the POA packet, was the only way a homeowner could vote,(legally) for or against any of the provisions (changes)

Second thing, I was informed of, which I questioned well after the meeting had ended, was. The attorney and the property manager had made the statement that our governing documents require us to receive 2/3 vote from the LOT owners on the revised amendments, doesn’t say anything about being eligible to vote for or against such. Which I think was totally BS. I, the board and many of the previous board members and a handful of HO’s present question that statement, so the attorney then read exact statement, word for word, out of our governing documents.

We were all under the understanding that (as is has been for every other vote in the past), in order to be able to vote, you must be current on your assessments, which would indeed make you eligible to vote in our community, among others things listed in our governing documents. We assumed that as always voting was a privilege not a right. If a HO is delinquent on his/her assessments they will loose voting privileges and use of all amenities, within our community, until they become a HO in current standings.

The ballots aren’t required back to our property management until April 25th, which is not all that far away. We will see, I wouldn’t think it would be passed by then, but wishful thinking and plenty of praying!

I’ll try to keep you all up to date should any new information arise. Thank you all, once again.

This discussion forum and the members that reply to the many different posts are simply phenomenal and extremely helpful to me and I would assume to the many others that are looking for advice from these “experts”

Chuck W.

Charles E. Wafer Jr.

BradD2 (Florida)
Posts: 418

Posted:

Charles, I would be cautious about excluding those not current. You have less than 51% of your Members that are current. If this conversion is contested the 49% of the people not being allowed to vote is sure to come out. Why do you have such high delinquencies?

HaroldS1 (Arizona)
Posts: 314

Posted:

Brad asked the exact question I was thinking all along while reading this topic. Your attorney and PM are correct. ALL owners are entitled to vote on such a monumental change that affects their property. You might be able to exclude these people from using your amenities, but I don't think you can exclude them from voting for such a change.
You have a far greater need to lower that delinquency rate than spending all that time trying to force something new you want onto your members. How do you even meet budget expenses when 49% aren't paying? Such a high delinquency rate is appalling and has to point to something very out of whack in your HOA for that many people refusing to pay their assessment. How is a POA going to change that attitude? That seems to me to be where you should be spending your energy. Harold

PaulM (Pennsylvania)
Posts: 1,347

Posted:

Harold/Brad:
You have both expressed my view exactly. I have been concerned while reading that something is very out of order here to have such an inexcusable percentage of resident apathy and non-payment. There is no reason that can be adequate to allow this situation.
Very sad for those who care and want to do the right thing.

RogerB (Colorado)
Posts: 5,067

Posted:

Chuck, property owners and members of the association are two separate entities. It takes only a percentage of the members in good standing to create a quorum and vote at a members meeting. However, all property owners must be included when dealing with changes to the Declaration since it is part of their deed.

What happens if sufficient ballots are not returned by April 25? I suggest you start knocking on doors at least two weeks before the deadline to get unreturned ballots; or else extend the deadline and start knocking on doors

Based on my past experiences for this to be approved it will not be a simple task of sending out a ballot and holding one meeting.

CharlesW1 (Georgia)
Posts: 826

Posted:

Quote:

Posted By RogerB on 04/01/2007 5:06 PM
Chuck, property owners and members of the association are two separate entities. It takes only a percentage of the members in good standing to create a quorum and vote at a members meeting. However, all property owners must be included when dealing with changes to the Declaration since it is part of their deed.

What happens if sufficient ballots are not returned by April 25? I suggest you start knocking on doors at least two weeks before the deadline to get unreturned ballots; or else extend the deadline and start knocking on doors

Based on my past experiences for this to be approved it will not be a simple task of sending out a ballot and holding one meeting.

RogerB,

Apparently, I’m not receiving every response posted to this forum,(the box is checked) when they are being posted!

What you said certainly makes sense to me, now that it was explained to me.

I will share the information you have provided to the other board members.

We (the board) do plan to extend the dead line if quorum isn’t achieved by April 25th. We have already prepared ourselves upon the idea if quorum isn’t achieved we may have to go door to door asking for these ballots.

Thank you once again. I knew I could count on the advice known by the knowledgeable people that post to HOATalk.com.

Thanks as always.

I’ll try to keep you post as much as possible

Chuck W.

Charles E. Wafer Jr.

CharlesW1 (Georgia)
Posts: 826

Posted:

Quote:

Posted By BradD2 on 04/01/2007 9:39 AM
Charles, I would be cautious about excluding those not current. You have less than 51% of your Members that are current. If this conversion is contested the 49% of the people not being allowed to vote is sure to come out. Why do you have such high delinquencies?

BradD2,

I maybe wrong when saying this, but it is what it is. I feel that the previous boards as well as our property manager hadn’t been doing their “job”

Many of these delinquencies are from previous years. In 06’ we only had 2 homeowners that didn’t pay their assessments. It’s has been my main objective for years to reduce our delinquency rate to a minimum.

Before I became a board member, I was interested in why, we didn’t have this or why we did or couldn't have that! I was told that the information I was seeking was privileged board information, so I decided to “run” and a year later here I am, a board member.

Thanks as always.
Chuck W.

Charles E. Wafer Jr.

CharlesW1 (Georgia)
Posts: 826

Posted:

I agree with you all as usual. I have and will continue to “dig” a little deeper. The current board and I have met with our property management and our collections attorney to figure out why we have such a high delinquency rate.

It is inexcusable; I’m not denying that fact. This is why I am doing everything possible to collect on these delinquent accounts, by following though with the collections attorney. I had basically told the other board members “that in order to make money we must spend money” IMO!

I’ve learned for about collection this past year, than I ever had previous to being a board member.

As always thank you
Chuck W.

Charles E. Wafer Jr.

BradD2 (Florida)
Posts: 418

Posted:

You might want to audit the financials yourself or at least the invoices for the last several years. We had several management companies and when I finally got the details behind the massive amount of non-payments I found a lot of errors on the part of the management company. In the end we ended up clearing over half of the outstanding balances that were under $50 because they were mistakes from one of the management companies.

The management companies charged late fees and interest on account credits (the person paid the year and half way through were assessed a late fee and interest on the credit). They charged late fees and interest weeks after a payment when it was clear from their own records the Owner was paid up. They credited the same house several times for a single payment that was made by their neighbors; two payments in two weeks for the very same quarterly assessment were suspicious. The payments are received directly by the bank and sometimes the Owners don't send along the associated coupon or invoice and so the bank must do research; this adds a two or three week delay. The bank has cashed the check and so from the Owner's perspective everything is fine but the bank hasn't credited the Association's account.

If you have so many houses with balances I would see what you can do to clear it up. Our Annual Assessment is due quarterly and when we did the Quarter 1 invoicing, we received permission from the bank to send out a potentially different amount for each Owner in order to get everything back to whole units. If an Owner had a credit for $15, then the invoice was $15 less for them. So far we have been able to get the 40% of houses with outstanding balances down to 8%. Don't be afraid to ask for all the details back to when the Owner had a zero balance (or credit) last.

CharlesW1 (Georgia)
Posts: 826

Posted:

Quote:

Posted By BradD2 on 04/02/2007 5:07 AM
You might want to audit the financials yourself or at least the invoices for the last several years. We had several management companies and when I finally got the details behind the massive amount of non-payments I found a lot of errors on the part of the management company. In the end we ended up clearing over half of the outstanding balances that were under $50 because they were mistakes from one of the management companies.

The management companies charged late fees and interest on account credits (the person paid the year and half way through were assessed a late fee and interest on the credit). They charged late fees and interest weeks after a payment when it was clear from their own records the Owner was paid up. They credited the same house several times for a single payment that was made by their neighbors; two payments in two weeks for the very same quarterly assessment were suspicious. The payments are received directly by the bank and sometimes the Owners don't send along the associated coupon or invoice and so the bank must do research; this adds a two or three week delay. The bank has cashed the check and so from the Owner's perspective everything is fine but the bank hasn't credited the Association's account.

If you have so many houses with balances I would see what you can do to clear it up. Our Annual Assessment is due quarterly and when we did the Quarter 1 invoicing, we received permission from the bank to send out a potentially different amount for each Owner in order to get everything back to whole units. If an Owner had a credit for $15, then the invoice was $15 less for them. So far we have been able to get the 40% of houses with outstanding balances down to 8%. Don't be afraid to ask for all the details back to when the Owner had a zero balance (or credit) last.

BradD2,

I certainly will look into doing something like that. I’ll inform the other board members as well, I can use all the help I can get.

I see you have “been there and done that” LOL I’m glad to read that my situation isn’t a first for an HOA.

Thanks for tips, I’ll keep you up to date as the process continues.

Chuck W.

Charles E. Wafer Jr.

PaulM (Pennsylvania)
Posts: 1,347

Posted:

charles:
It is confusing for me to read that your delinquencies in 2006 were only 2 homeowners who didn't pay out of a full count of 270 members!! That is an incredible rate.
And now, in 2007--3 months later--your rate has skyrocketed to 50%????
What is going on?

BradD2 (Florida)
Posts: 418

Posted:

Paul, he is saying that the money owed is for prior years.

PaulM (Pennsylvania)
Posts: 1,347

Posted:

Brad, thanks. P.

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