Proxy and voting

I am in an HOA of 22 townhouses in Southern California.

I noticed that the new proxy form for our yearly meeting includes language that says "By not returning this proxy or not attending a meeting of the Association, your vote regarding Association business defers to the Board of Directors. " We have never had language like this and I don't like it much. Is this legal?

I'm not sure where the bylaws stand on this. The bylaws do say that "each unit, regardless of the number of owners thereof, shall be represented in the Association by only one vote which may be cast only as a unit by the owner or owners thereof." Concerning proxies the bylaws say that "each person entitled to vote shall have the right to do so either in person or by an agent or agents authorized by a written proxy executed by such person or his duly authorized agent and filed with the Secretary of the Association before the commencement of the meeting at which the proxy is to be exercised."

In reality, however, the people who don't participate or fill out a proxy pretty much turn over their leverage to those people who do act, anyway ...

Thomas, per Davis-Stirling Proxy web page and CA Civil Code §5130, proxies must be signed by the member to be valid.

Therefore, the Board threatening to use an unsigned proxy or the lack of any proxy as justification to vote on the members behalf is simply asking for a legal challenge.

My suggestion would be to contact the board, in writing (mail/e-mail), cite the language of CA Civil Code §5130 and ask under what basis does the board believe they have the authority to cast a vote on behalf of a member without the members signed permission. Explain that, based on your understanding of the statute, performing such an action would open the Association up to litigation and call the results of any vote held to possibly be invalid. Then urge the Board to seek a legal opinion on the language they used when sending out meeting notice and proxy forms.

While you are waiting for a reply, start gathering support from other members as you may need to ensure that the board who believes such action would be authorized may need to be recalled or not reelected.

Not legal or ethical, it seems to me. It looks like they worded it as an attempt to get a full attendance at the meeting, but the BOD doesn't have the right to vote for another member unless given permission thru the proxy form.

That's weird - entered twice ? !

The more I look at the laws and at our bylaws the more outrageous it seems -- unless the board did not mean for the word "defer" to mean "vote for." I think it is indeed a way to increase attendance. HOA participation is low and in the past we have had to run around knocking on doors, begging people to attend. This is an easier way to reach a quorum, but not a very ethical one.

It is not unusual for shareholder proxies to give the board the vote

Interesting. Never saw it that way.

Do a lot of people leave it to "the Board"?

I am curious.

If the proxies are received at a annual or member meeting, NOT a Board meeting how does a Board vote as a "group". If they are assigned to the Secretary, which is not uncommon, that individual could vote the proxy.

Tim since you are in Va., I'm interested in your view of how things went down in our HOA and if you think we could experience problems. Anyone else please chime in. Here I'll recap exactly what unfolded with a bit of history, purposely presented without my personal opinion.

April 2014 All members are sent a letter explaining a special homeowners meeting will be called on September 17, 2014 for the express purpose of voting on new architectural guidelines. Members are told the proposed changes and guidelines are clearly posted on our HOA web site and everyone is encouraged to carefully review them and come to the September meeting to "have their voice heard".

August 2014 During a board meeting the board enters executive session to discuss, they claim, common area encroachment. The minutes suggest the president's ASC application which included common area tree planting was approved after executive session with nothing more than comment from our grounds committee chairman, but nobody knows what those comments were. Subsequently, one of the guidelines is changed again roughly a month before the September meeting. During the August board meeting the president says he will go door to door to collect enough proxies to hold the meeting and hopefully gather enough proxies to get the guidelines passed. Following that August board meeting this is what he and other board members do.

September 17, 2014 Membership comes together to vote. Over 80 members voted by proxy and enough proxies exist to have a quorum, and hence, conduct a members meeting, but not nearly enough proxies exist to pass the guideline changes. President points out we don't have enough proxies to pass guideline changes and asks for permission to change the meeting from a meeting to a discussion, but no motion is made and absolutely no one says a word. He then asks me what he should do. I suggest that he should openly discuss with the members present the merits of voting for this guideline change or that one. I'm under the assumption that here is the meeting where members can actually discuss between themselves why or why not each change is worthy. My belief at the time is after we do this we can take a vote, count the votes, and then the board could continue to collect signatures for a reasonable amount of time to get enough votes to pass they guidelines or not.

During the discussion members argued that some additional changes should be made. The board, during the meeting, seemed receptive to most of the changes, but not all. No vote was ever taken, but it was obvious the president thought he could count the votes already taken toward a new vote for the new changes. Some members brought to the presidents attention that if changes were made, the proxies already cast we no longer valid. President did not believe this and intended to proceed anyway.

September 23, 2014 Board meets and agrees to formally make the new changes the members suggested at the September 17 meeting. President admits that he corresponded with association attorney without the board's knowledge and confirms he cannot use the previous proxies toward vote on the new changes. This cost us another $300 and some board members are unhappy. The board posts on the HOA web site the new version of the guidelines, but does not tell the neighborhood they are posted with additional changes. The board also posts a new proxy form on the HOA web site with a disclaimer at the top of the form that says the proxy will be used at the "next special meeting". It is not dated and does not indicate if it will be used at a board meeting or member's meeting.

Between September 23 and November 20 2014 The board president proceeds to walk the neighborhood to walk to collect proxies toward another vote at another special homeowners meeting. He visits just enough homes to collect barely enough proxies to pass the guidelines if the board also votes for them.

November 14 2014 our neighborhood communications contact emails the members she has email addresses for with this: "Hi all, please note we are having a Special meeting to adopt the new Architectural Guidelines, followed immediately by a regular Board meeting. The meeting starts at 0630 at Red Mill Elementary school on THURSDAY November 20th."

As a result of this ambiguous language only 2 members showed up to the "special meeting". The board subsequently voted in the new guidelines with the proxies the president collected.

January 9, 2015 Board provides printed copies of new guidelines at the attempt at an annual meeting and makes homeowners present sign a paper saying they've received them. The board claims they will mail the members not present the guideline changes.

Our governing documents specify notifying the membership of any special members meeting at least 7 days in advance. The Virginia Non Stock Corp Act requires notice at least 10 days in advance of any special member's meeting, and the Virginia Property Owners act requires notice of at least 14 days prior to a special member's meeting.

Now my thoughts: I don't think we'll ever have a problem unless the board attempts to fine someone for a violation of one of the changes. But it is my view that should a homeowner wish to fight any fine he he receives he or she could easily argue the proxies were not dated as required in our governing documents, and that the board did not comply with our governing docs and state law when noticing the meeting. Should a situation get nasty and the board wish to go to court to go after a homeowner for fines that can max out at $900 I don't see how the association can win, potentially costing us thousands of dollars in court costs.

What are your thoughts Tim, and anyone else interested in providing feedback? And thank you.

Getting back to the other proxy discussion on this thread, we use the following:

Thomas D2 posted a proxy example shown below:

"check only ONE of the following:
□ I assign _______________________ the authority to vote on my behalf
regarding Association matters.

□ I assign the Association Board of Directors the authority to vote
on my behalf regarding Association matters."

Our change is that it states the first choice exactly as Thomas posted it, the second statement reads: "I assign the President of the Association the authority to vote on my behalf regarding Association matters." We include a statement that if the President is not in attendance (he travels extensively on business and could have a flight delayed, etc.) the authority passes to the Vice President, then the Secretary.

We also include an option which states: "This proxy is submitted for the purpose of establishing a quorum for the Annual Meeting only and, unless indicated otherwise below, does not convey authority to vote on my behalf on matters which may come before the Association during the meeting." It also includes the standard "if I show up at the meeting, this proxy is null and void" language.

Also, since Voter ID is such a hot topic here in Texas, unless a member of the board or an employee of the MC personally recognizes a property owner, we request picture identification as part of the sign in process.

Thomas,

There are rules listed in the Corporation Code about voting on a topic that wasn't previously listed on the agenda for an annual meeting.

As I've learned the hard way, many rules, little enforcement. Condo law and our bylaws indicate that the board has to have meetings, not emails. My HOA board has not had a meeting in 14 months; but they have worked on some projects. A year ago I finally got meeting minutes after writing to the State Attorney General. It took 15 months of trying.

Since absentee/mail in ballots are permitted in CA HOAs, we never need proxies. We send out ballots and our inspectors of election count them at the annual meeting or special meeting of the members.

CA also requires Election Rules for HOAs.

See davis-stirling.com, Elections,

Kerry

I will disagree with you on not having to be present in person at an annual meeting. There are some in the legal profession that say if quorum is not met, those present in person, by proxy or by secret ballot need to be present to adjourn a meeting to a later date or it can be just cancelled.

I noticed that the link Tim included to Davis Stirling http://www.davis-stirling.com/tabid/2015/Default.aspx#axzz3PdQlGAXn basically says "please stop using proxies and have people cast ballots."

Thomas

I am not a big proponent of proxies, but if used correctly and wisely can be a valuable tool.

I hate the business practices at my HOA. Like I said above , the board has not had a meeting in 14 months, but nevertheless engaged in a 50,000.00 project. I only got meeting minutes after writing to the state attorney general, the office wrote a letter. I think many HOA's have perfectly dreadful business practices, I've heard the stories. The reason they get away with this nonsense is the spectacular level of apathy, which is certainly the case where I live.

And I have a feeling you replied because it gave you a convenient opportunity to lecture me. I was on the board, I am not now, and we have never had ballots. Votes have never been secret. I think it is a great idea, it has never been mentioned at my HOA. It would eliminate the need for proxies entirely. I cited one of the links Tim provided in an earlier thread, so yes, I read the links provided. I read a lot about HOAs and HOA law. The problems at my HOA are indeed serious and I am serious about participating.