Proxy use at Board Election

AkshatS (Georgia)
Posts: 6

Posted:

Our annual HOA Board meeting was held yesterday. We had a quorum which included board members, residents and some proxies.
The existing president was not able to attend the meeting. At the time of election the vice president used the unassigned proxies to vote for their own candidate. My understanding is that unassigned proxies (these were sent to HOA office directly by residents), can only be used by president and no one else.
Our HOA representative said since president is not available, the vice president has full authority to use proxies for any one.

Please help on deciding what is the right protocol/law for signed but unassigned proxies.

Thanks
AksS

CarolR11 (Colorado)
Posts: 2,563

Posted:

Welcome to the forum, Aks. Many on this forum know a lot about proxies, but I'm not among them as our HOA uses no proxies. You'll hear from others though!

But, take a look at your bylaws, which should state how proxies are to be collected, by whom, etc., and so on. GA laws also may have statutes about proxies in HOAs.

RogerB (Colorado)
Posts: 5,067

Posted:

"When Proxies are allowed they should be assigned to a person, or a member if the Bylaws require it. They should not be assigned to "the President" or to "the Board".

CarolR11 (Colorado)
Posts: 2,563

Posted:

Out of curiosity, Aks, what is an "HOA representative"?

PeterD3 (Florida)
Posts: 708

Posted:

An unassigned proxy has no merit. It is invalid. End of story.

Proxies that may have been [properly] assigned to the President are not 'transferable' to the VP either.

Notwithstanding language in your Bylaws regarding officers and their duties or similar that MAY say something like that the VP acts in the stead of the President if (s)he is unable or unwilling to perform his/her duties does not extend to proxies.

While a proxy may be asigned to anyone I don't believe it can be assigned to the BOD. It must be a specific.

Seek legal advice and/or review your state corporate laws with regards to proxies to be sure as these typicaly have jurisdiction in these matters.

PeterD3 (Florida)
Posts: 708

Posted:

What do mean exactly by 'unassigned proxies'?

The entire meeting could be invalid (i.e. no quorum).

TimB4 (Tennessee)
Posts: 21,059

Posted:

If the Association is going to allow proxies to be assigned to the Board, which happens often, the Board, prior to the meeting, should vote on how the proxies are to be used.

Here are some other thoughts on the issue:

Proxies Assigned to Board from Davis-Stirling.com

PROXY VOTING by Robert McConnell Productions, a Parliamentary Procedure Resource

JohnC46 (South Carolina)
Posts: 14,265

Posted:

I am not nor do I play a lawyer. Also NY law might not be applicable:

Q “I live in a co-op in and had a question about proxy voting. In a recent vote, some proxies were left unassigned although everything else was filled out correctly. Does this make them automatically void because they were incomplete?”

A “The answer is very simple.” says Attorney Geoffrey R. Mazel, a principal of the Manhattan-based law offices of Hankin & Mazel, PLLC. “If the proxy was not assigned to an individual it is null and void and can not be counted for anything. A proxy is a written delegation from a shareholder to an individual named in the document. The express purpose of a proxy is so that the designated person in the proxy can act in the place of the shareholder at a meeting of shareholders. Also, the law requires that a proxy be signed and dated by the shareholder. Accordingly, if an individual is not named by the proxy holder to act in their place and stead, the proxy has not effect whatsoever. For this reason it is critical that the shareholder fill out a proxy carefully, as well as signing and dating same before submitting at a shareholders meeting.”

AkshatS (Georgia)
Posts: 6

Posted:

By HOA representative I meant the official from our HOA management company.

Thanks

AkshatS (Georgia)
Posts: 6

Posted:

Unassigned Proxies, as there was no entry/blank in the name field. The homeowners have just signed the bottom. There were 4 proxies like this sent to HOA Management company directly.

TimB4 (Tennessee)
Posts: 21,059

Posted:

On our proxy forms that the Association provides, we specify that any form that does not name an individual, is signed and returned to the association, is deemed to be assigning the proxy to the Board.

PeterD3 (Florida)
Posts: 708

Posted:

Quote:

Posted By TimB4 on 03/21/2014 7:29 PM
On our proxy forms that the Association provides, we specify that any form that does not name an individual, is signed and returned to the association, is deemed to be assigning the proxy to the Board.

Wow, as meticulous as you often seem on this board that sounds fishy so I assume you have doumentation to back that up.

This older document, while it does not explicitly contradict you, suggests this is not good practice.
http://www.vahoalaw.com/95540-print.html

CarolF (Florida)
Posts: 435

Posted:

This is the partial wording suggested for a proxy for a membership meeting by the Dunbars (FL Attorneys) in their book "The law of Florida Homeowners Associations". "KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned hereby appoints the Secretary of the Association, his or her designee, or ______________________, attorney, and agent with the power of substitution for and in the name, place and stead of the undersigned to vote as proxy at the membership meeting of the Association, to be held at"....etc. etc. Then it goes on to list General or Limited Power and describes each with a place to check either one.

This also provides for the power of substitution
They suggest the following wording for that -
"The undersigned, appointed as proxy above, does hereby designate___________to substitute for me in the proxy set forth above."

CarolF (Florida)
Posts: 435

Posted:

Also, Aks - the annual meeting (including the election) is a generally called a membership meeting, not a board meeting.

AkshatS (Georgia)
Posts: 6

Posted:

Thanks Carol

AkshatS (Georgia)
Posts: 6

Posted:

As per my understanding the main issue is that as per proxy only President can represent and vote in lieu of homeowner, when proxy is left unassigned. In our meeting since President was not present, Vice President used the proxy to get their candidate in Board, stating in the absence of the President, the VP has full power of substitution; he/she may do what he/she wants with the Proxy. (i.e. Use them all or divide them up, however he/she feels fit).

That sounds more like Proxy to a Proxy.
Proxy is issued to a Person, and if that person is not able attend the meeting, Proxy should not be used.
The letter says assign it to a Person or if left Blank, President get the full power.
Now since proxy was left blank and President not able to attend. Those proxies should have been null and void.

RichardP13 (California)
Posts: 1,767

Posted:

There has to be a better way to have elections in the communities in which we live. Can you imagine if this process was in place for the election of our city councilmen, mayor, governor, senator or even president.

CarolF (Florida)
Posts: 435

Posted:

But we are election directors for a corporation.

CarolF (Florida)
Posts: 435

Posted:

sorry that should say electing....not election

RichardP13 (California)
Posts: 1,767

Posted:

I realize what a corporation is, but elections in a community should be like municipal elections. They try and put HOA's into the same category as a corporation, but we aren't. In California, our Civil Code states that the process of elections should closely resemble county election procedures for secret ballots. In operating an HOA, we have similar authorities as a municipal government.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By PeterD3 on 03/22/2014 4:58 AM

Posted By TimB4 on 03/21/2014 7:29 PM
On our proxy forms that the Association provides, we specify that any form that does not name an individual, is signed and returned to the association, is deemed to be assigning the proxy to the Board.

Wow, as meticulous as you often seem on this board that sounds fishy so I assume you have doumentation to back that up.

This older document, while it does not explicitly contradict you, suggests this is not good practice.
http://www.vahoalaw.com/95540-print.html

Peter,

I have posted examples of our general and individual proxies many times on this site. Everyone of them included the line that I mentioned. There has never been a comment on it until this thread. The article you mention, and articles I've seen on proxies, mainly point out issue associated with general proxies.

As many, including myself, have posted, assigning general proxies to the Board is not recommended. The reason it's not recommended is because it can put too much voting power into the hands of one individual. Members are human and may fail to fully complete a form. However, by returning the proxy, the individual has demonstrated a desire to vote. When possible (sometimes there isn't enough time), we try to get in contact with the member to correct the deficiencies in the proxy. When it's not possible, we placed the language we did so the member, who has shown an intent to vote, will have their vote count. As I also pointed out, our Association tries to mitigate the voting power that can occur when assigning proxies to the Board. The way we mitigate this is:

1) We use directed proxies - using directed proxies allows the member to indicate how the ballot is to be filled out. Regardless of how an individual wants to vote, the ballot must be completed as the member directed. (I've attached an example of a directed proxy form)

2) We ensure that ballots are completed as directed in the proxy - At the meeting, when a proxy form is presented, the election official (to verify that the members direction is followed) will complete the ballot as outlined in the proxy statement. This is done in front of the proxy representative and another election official. The ballot is then handed to the proxy representative to be collected later in the meeting and the proxy form goes into Association files. Since the proxy itself is part of the association records and available to any who request to view the records, the member, by utilizing the directed proxy, has effectively waived keeping their vote secret. Based on this, the Board believes that taking this step does not violate any issue associated with secret voting. The name of the proxy is not part of the ballot, therefore, the actual ballots are secret.

3) The Board votes how to utilized proxies assigned to the Board - The Board, prior to the general meeting, votes how any non-directed proxies assigned to the Board are to be voted. Typically, the Board votes to cast votes for the candidates who are declared prior to the meeting (we allow nominations from the floor as well) and, if there are any amendments on the ballot, as the Board recommended to the membership about the amendment.

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TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By RichardP13 on 03/22/2014 11:48 AM

I realize what a corporation is, but elections in a community should be like municipal elections.

Although I don't disagree with you Richard, the reality is if our Association didn't use proxies, there would be occasions that we wouldn't achieve a quorum. Even when there are quorums in person, proxies have typically made up half the votes.

Personally, I believe that if proxies are going to be used, then only directed proxies should be used. Directed proxies are as close to voting by mail that you can get without actually voting by mail.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By TimB4 on 03/22/2014 12:41 PM

Posted By RichardP13 on 03/22/2014 11:48 AM

I realize what a corporation is, but elections in a community should be like municipal elections.

Although I don't disagree with you Richard, the reality is if our Association didn't use proxies, there would be occasions that we wouldn't achieve a quorum. Even when there are quorums in person, proxies have typically made up half the votes.

Personally, I believe that if proxies are going to be used, then only directed proxies should be used. Directed proxies are as close to voting by mail that you can get without actually voting by mail.

I agree. Without Proxies little would happen.

BruceF1 (Connecticut)
Posts: 2,535

Posted:

Quote:

Posted By TimB4 on 03/22/2014 12:41 PM
Personally, I believe that if proxies are going to be used, then only directed proxies should be used.

Connecticut's Common Ownership Interest Act permits a person to hold any number of directed proxies, but an individual cannot have more than 5 undirected proxies.

EllieD (Vermont)
Posts: 446

Posted:

Bruce,

In CT is it actually not more than 5, or perhaps is it: “A person may not cast undirected proxies representing more than 15 percent of the votes in the association”.

PeterD3 (Florida)
Posts: 708

Posted:

Quote:

Posted By TimB4 on 03/22/2014 12:36 PM

Posted By PeterD3 on 03/22/2014 4:58 AM

Posted By TimB4 on 03/21/2014 7:29 PM
On our proxy forms that the Association provides, we specify that any form that does not name an individual, is signed and returned to the association, is deemed to be assigning the proxy to the Board.

Wow, as meticulous as you often seem on this board that sounds fishy so I assume you have doumentation to back that up.

This older document, while it does not explicitly contradict you, suggests this is not good practice.
http://www.vahoalaw.com/95540-print.html

Peter,

I have posted examples of our general and individual proxies many times on this site. Everyone of them included the line that I mentioned. There has never been a comment on it until this thread. The article you mention, and articles I've seen on proxies, mainly point out issue associated with general proxies.

As many, including myself, have posted, assigning general proxies to the Board is not recommended. The reason it's not recommended is because it can put too much voting power into the hands of one individual. Members are human and may fail to fully complete a form. However, by returning the proxy, the individual has demonstrated a desire to vote. When possible (sometimes there isn't enough time), we try to get in contact with the member to correct the deficiencies in the proxy. When it's not possible, we placed the language we did so the member, who has shown an intent to vote, will have their vote count. As I also pointed out, our Association tries to mitigate the voting power that can occur when assigning proxies to the Board. The way we mitigate this is:

1) We use directed proxies - using directed proxies allows the member to indicate how the ballot is to be filled out. Regardless of how an individual wants to vote, the ballot must be completed as the member directed. (I've attached an example of a directed proxy form)

2) We ensure that ballots are completed as directed in the proxy - At the meeting, when a proxy form is presented, the election official (to verify that the members direction is followed) will complete the ballot as outlined in the proxy statement. This is done in front of the proxy representative and another election official. The ballot is then handed to the proxy representative to be collected later in the meeting and the proxy form goes into Association files. Since the proxy itself is part of the association records and available to any who request to view the records, the member, by utilizing the directed proxy, has effectively waived keeping their vote secret. Based on this, the Board believes that taking this step does not violate any issue associated with secret voting. The name of the proxy is not part of the ballot, therefore, the actual ballots are secret.

3) The Board votes how to utilized proxies assigned to the Board - The Board, prior to the general meeting, votes how any non-directed proxies assigned to the Board are to be voted. Typically, the Board votes to cast votes for the candidates who are declared prior to the meeting (we allow nominations from the floor as well) and, if there are any amendments on the ballot, as the Board recommended to the membership about the amendment.

Thanks Tim.

Unfortunately I do not have time to, research, follow, or maintain a database all of your past posts or attchments.

Unassigned proxies work for you, great. Not all may agree.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Peter

I am not, nor do I play a lawyer.

Proxies can be a "dangerous" tool if misused and they are easily misused. They are quite often misused to keep those in power in power at the expense of the less enlightened.

What I advocate, is beat the enemy at their own game. Proxies can be used to do such. This might help some:

1. Later (latest) dated Proxies rule. If I have one dated 12/01 from you saying white is white, then I have one from you dated 12/02 saying white is black. White is black wins. Your one of 12/01 is thrown out by your one of 12/02.

2. #1 above sounds good but, it is not always true. An irrevocable proxy might rule thus if the proxy of 12/01 says it is irrevocable then the one of 12/02 in meaningless.

3. #2 above sounds good but it is not always true. Some courts and state legislatures are often very hesitant to allow parties soliciting a proxy to make the proxy “irrevocable” under any circumstances. As a result, many states have laws indicating that a proxy, freely given and without consideration, may be revoked even if they provide language to the contrary.

4. One shows up at the meeting and revokes all their signed proxies and votes in person.

I love proxies but they can be very tricky. This "trickiness" can work for and/or against someone.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Akshat:

You have not stated whether you are a single family subdivision or a condominium. The following is stated for a single family HOA under the FL statutes.

720.306 Meetings of members; voting and election procedures; amendments.—

(8) PROXY VOTING.—The members have the right, unless otherwise provided in this subsection or in the governing documents, to vote in person or by proxy.
(a) To be valid, a proxy must be dated, must state the date, time, and place of the meeting for which it was given, and must be signed by the authorized person who executed the proxy. A proxy is effective only for the specific meeting for which it was originally given, as the meeting may lawfully be adjourned and reconvened from time to time, and automatically expires 90 days after the date of the meeting for which it was originally given. A proxy is revocable at any time at the pleasure of the person who executes it. If the proxy form expressly so provides, any proxy holder may appoint, in writing, a substitute to act in his or her place.

If you are in a condominium let us know and we can provide a link or information regarding where to look to find an answer to your question.

PeterD3 (Florida)
Posts: 708

Posted:

Quote:

Posted By JohnC46 on 03/22/2014 5:27 PM
Peter

I am not, nor do I play a lawyer.

Proxies can be a "dangerous" tool if misused and they are easily misused. They are quite often misused to keep those in power in power at the expense of the less enlightened.

What I advocate, is beat the enemy at their own game. Proxies can be used to do such. This might help some:

1. Later (latest) dated Proxies rule. If I have one dated 12/01 from you saying white is white, then I have one from you dated 12/02 saying white is black. White is black wins. Your one of 12/01 is thrown out by your one of 12/02.

2. #1 above sounds good but, it is not always true. An irrevocable proxy might rule thus if the proxy of 12/01 says it is irrevocable then the one of 12/02 in meaningless.

3. #2 above sounds good but it is not always true. Some courts and state legislatures are often very hesitant to allow parties soliciting a proxy to make the proxy “irrevocable” under any circumstances. As a result, many states have laws indicating that a proxy, freely given and without consideration, may be revoked even if they provide language to the contrary.

4. One shows up at the meeting and revokes all their signed proxies and votes in person.

I love proxies but they can be very tricky. This "trickiness" can work for and/or against someone.

Unassigned is the issue of contention in the OP's post.
Not sure what the nexus is between irrevocable and unassigned.

BruceF1 (Connecticut)
Posts: 2,535

Posted:

Quote:

Posted By EllieD on 03/22/2014 2:44 PM
Bruce,

In CT is it actually not more than 5, or perhaps is it: “A person may not cast undirected proxies representing more than 15 percent of the votes in the association”.

You are correct it is 15%. I don't know where I got 5 from. Well, at least I know I can always depend on you to keep me in line regarding the CIOA.

PeterD3 (Florida)
Posts: 708

Posted:

Quote:

Posted By JanetB2 on 03/22/2014 9:20 PM
Akshat:

You have not stated whether you are a single family subdivision or a condominium. The following is stated for a single family HOA under the FL statutes.

720.306 Meetings of members; voting and election procedures; amendments.—

(8) PROXY VOTING.—The members have the right, unless otherwise provided in this subsection or in the governing documents, to vote in person or by proxy.
(a) To be valid, a proxy must be dated, must state the date, time, and place of the meeting for which it was given, and must be signed by the authorized person who executed the proxy. A proxy is effective only for the specific meeting for which it was originally given, as the meeting may lawfully be adjourned and reconvened from time to time, and automatically expires 90 days after the date of the meeting for which it was originally given. A proxy is revocable at any time at the pleasure of the person who executes it. If the proxy form expressly so provides, any proxy holder may appoint, in writing, a substitute to act in his or her place.

If you are in a condominium let us know and we can provide a link or information regarding where to look to find an answer to your question.

Janet,

Are you posting Florida laws for reference?

The OP is in Georgia.

These references may be better AkshatS as they are specific to GA:

The Georgia Condominium Act, O.C.G.A. § 44-3-70 to § 44-3-117 and the Georgia Property Owners’ Association Act, O.C.G.A. § 44-3-220 to § 44-3-235 (2004) are the primary statutory authority. The two areas of law are similar and often merge (for a discussion of the similarities and differences, see 1 Ga. Jur. Property § 6:78).

The text of each may be accessed at http://www.lexis-nexis.com/hottopics/gacode/.

There is also this:

2010 Georgia Code
TITLE 14 - CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS
CHAPTER 3 - NONPROFIT CORPORATIONS
ARTICLE 7 - MEETINGS
PART 2 - VOTING
§ 14-3-724 - Proxies

AkshatS (Georgia)
Posts: 6

Posted:

Thanks every one for their insight on Proxies.
I forgot to add, we are a single family housing community.