Proxies (Virginia HOA)

Started by DonnaR5 • 6 replies • 2555 views

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DonnaR5
Posts: 162

Posted:

We had a new proxy drafted by the attorney, and it reads:

"The undersigned member of the XXX Homeowners Association hereby appoints Jane Doe, Secretary, with full power of substitution, as my proxy to cast a vote, which I am entitled to cast as a member of the Association..."

We had two questions on this: first, sometimes people want to assign someone specific who is attending the annual meeting as their proxy, in which case you'd think there should be a fill-in-the-blank space there instead of the secretary. Perhaps that's not necessary if the person's proxy is carried to the meeting by the friend/neighbor/whatever.

But one board member was adamant that there should be a blank and not a name. Which leads to my question: suppose people don't fill in a name and mail in the proxy with their votes marked. Our property manager says those proxies will still be legal and we can count those votes. Is this correct?

Technically at least, it doesn't seem to be a proxy at all if the substitute is not assigned the vote. Legally, it could be different. But if we're going to change what the attorney sent us, I'd like to be confident that those will count toward a vote.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Donna,

Only the named individual on the proxy form may cast the proxy. See VA § 13.1-847, part of the Virginia Nonstock Corporation Act, for more specifics about the use of proxies in Virgina Corporations.

You attorney provided a proxy that favors their client, the Association. That was their job. Per the statute linked above, a member is not required to utilize the Associations proxy form. However, many do and by doing so, many Boards will utilize forms similar to what your attorney drew-up as it gives voting power to those already on the Board.

When proxies are assigned to the Board, it is typical to name the Secretary. To prevent the Secretary from having too much voting power, the Board will typically adopt a resolution prior to the election specifying how any proxies assigned to the Secretary are to be cast.

I agree that there should be a blank space on the form. What we do is specify that if a name is not identified, then the Association will consider the member assigned the proxy to the Board. However, we do encourage them to actually write in a name or "the Board" on their proxy form

I also prefer directed proxies over general proxies. Directed proxies not only identify the individual who is to cast the vote, but also "directs" them to cast the vote a specific way.

I've attached a sanitized version of what we use.

Hope this helps,

Tim

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JohnC46 (South Carolina)
Posts: 14,265

Posted:

Donna

As usual, Tim is correct.

Do notice on his Proxy Example it says:

FIRST, LAST NAME (lack of name will assign proxy to Board of Directors)

I would go as far as to say with the proxy you mentioned one could cross out where it says assigned to the Secretary and write in the name of the person you would want to assign the proxy to. I also expect the BOD would object to this, especially if they are trying to control things.

DanaT (Tennessee)
Posts: 214

Posted:

Quote:

Posted By TimB4 on 07/16/2014 8:12 AM
Donna,

Only the named individual on the proxy form may cast the proxy. See VA § 13.1-847, part of the Virginia Nonstock Corporation Act, for more specifics about the use of proxies in Virgina Corporations. Hope this helps, Tim

Thanks for the example Tim. Since our HOA is no longer incorporated, I am wondering if the Virginia Condo Act, § 55-79.77. Meetings of unit owners' associations and executive organ; voting by unit owners; proxies, would over ride your form example. If I am reading it correctly, I think it is saying that the person you are giving your proxies to, must also sign the proxies as well. Is this correct?

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By TimB4 on 07/16/2014 8:12 AM
You attorney provided a proxy that favors their client, the Association.

Agree with Tim except for this one statement.

The attorney provided a proxy that favors the incumbent board members being able to do whatever they want, which IMO is not necessarily in the best interest of the association.

Also, if there isn't a pre-established rule like Tim's about what the board does with these proxies, then the Secretary would be given more power than any other director. A danger all by itself. Lawyer should have explained that risk and dealt with it.

If my HOA lawyer provided a proxy like that without anything more, then I would look for another lawyer. I might trust my fellow board members while I'm on the board now, but that doesn't apply when I'm off the board some time in the future.

Lazy lawyering IMO.

Sikubali jukumu. Read all posts at your own risk.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By DanaT on 07/23/2016 4:47 AM

Thanks for the example Tim.

Dana,

I'm glad the example provided helped.

Keep in mind that this is a two year old thread. It's best not to reactivate threads but start a new thread. Even if the subject matter is similar, reactivating an old thread can become confusing for some as laws change and what may have been good info in 2014 may be bad info in 2016.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By DanaT on 07/23/2016 4:47 AM

Thanks for the example Tim.

Cleaned up to make it easier to read.

Dana,

I'm glad the example provided helped.

Keep in mind that this is a two year old thread. It's best not to reactivate threads but start a new thread. Even if the subject matter is similar, reactivating an old thread can become confusing for some as laws change and what may have been good info in 2014 may be bad info in 2016.

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