Proxies used to swing election? Is it legal?

Most important is: What does the proxy say? It is a given that proxies can usually be used for quorum. Beyond that it must specify what else is allowed with the proxy. For the president to vote as he chooses, it should specifically give him the power to vote as he chooses. That would include any other votes taken at the meeting. Or it could specifically state who and/or what to vote for.
Does your state statutes govern proxies? Arizona does not allow proxy voting.

OP here. Thanks for the replies. So it sounds like I'm outta luck. If the President is the one holding the proxies than it seems he can use them to vote for whomever he'd like, and too bad for the rest of the board and homeowners. Is that basically the bottom line? Might there be anything in the covenant that forbids him from doing this? I do know that our covenant says "there shall be no collective voting". None of the original homeowners are still alive to explain what the original intent was. Thanks again.

Rene, read your By-laws to determine if proxies are allowed. If so, check your state statutes to make sure a later statue does not state proxies are not allowed. If the state statutes allow proxies and the By-laws are silent then check your state's nonprofit act if you are incorporated. It will usually allow the use of proxies.

Once this is determined and proxies are allowed then make sure the proxy is properly drafted. Following this when proxies are received the proper execution must be made or else they should not be counted. Proxies need to be qualified people, such as a member or any person over 18 years of age. A proxy made out to "the Board" or "to the President" is not a valid person IMO.
Execution of unrestricted proxy forms are often allowed. The person assigned as the proxy of such a form is counted in the quorum and may vote however they please.

ReneS,

Do you mean "collective voting"? or "cumulative voting"?

Cumulative voting is a different animal altogether. The best way to describe cumulative voting is with an example. Suppose you have an election for three board members. You are allowed three votes, but they must be for three separate candidates (one for each position). That's normal voting.

With cumulative voting, if you have an election for three board members, you are allowed three votes in this case too. However, with cumulative voting, you may cast all three votes for a single candidate, or two votes for a single candidate and one vote for a second candidate, or you may cast one vote for each of three different candidates (as you would in normal voting).

That's the difference. It has nothing to do with proxies.

RogerB,

Did you mean "can" or "cannot"? in your example.

OP again. OK, it looks like I need to dig out the covenant and by-laws. When I referenced "no collective voting" above, that's what I was told is in the covenant. I've not read it for myself yet. Thanks for all the info so far.

ReneS: As other posters have stated, you really need to refer to your own official documents (Bylaws); and also your state's regulations on use of proxies.

You state, "Can the president use the proxies as votes for anyone he wants?"
It really depends on how the proxy is worded, and whether there is a space for one to assign their "proxy" to a person who would be designated in a write-in space. For a proxy NOT to be worded appropriately and correctly is a real slick way of gaining votes to sway an election. Further, it is not ethical nor professional for one who is nominated (or is a 'friend' of a nominee) for election to send, or receive/hold the proxies which have been returned.

Do you have a Prop. Mgr. who could assist with this process?

OP here. No we don not have a property manager. It's such a small HOA (31 T-houses) that it would not be cost efficient for us. BUt I will be checking our paperwork today. I will post when I've found out some specifics.

Examples of illigal actions which can be corrected by members who are knowledgable and not apathetic. Unfortunately, many complain but want someone else correct it for them.

DonnaS,

I don’t recall, did I use the term “nonprofit” somewhere? I know I did refer to the SC statute (Chapter 31) that deals with “Nonprofit Corporations”, The SC statute that covers “Not-For-Profit” corporations is Chapter 36. Note how this chapter defines a not-for-profit” corporation – I quote:

"SECTION 33-36-10. "Corporation not-for-profit" defined.
As used in this chapter "corporation not-for- profit" means a corporation which, upon its original organization, is financed in whole or in part by a loan made under the provisions of the Consolidated Farmers Home Administration Act of 1961, as amended by the Food and Agriculture Act of 1962, and acts amending it, and by the State Revolving Fund for Water or Sewer."

This means that, to be a “not-for-profit” corporation in SC, the HOA must have been financed by a government loan.

On the other hand, a “nonprofit” corporation in SC as defined in Chapter 31 can be a “mutual benefit” corporation.

So, which do you think applies here? Is an HOA in SC a “nonprofit” or a “not-for-profit” corporation?

Laws vary from one state to the other, thanks to the tenth amendment of the Constitution. An HOA may be a “not-for-profit” corporation in one state and a “nonprofit” corporation in another, even if "not-for-profit" is more common. My state avoids the issue altogether by considering HOAs as “nonstock” corporations, just to muddy up the mix a little more.

Anyway, I don’t think this has anything to do with proxies because they are covered in both SC statutes, except that Chapter 36 leaves it up to the bylaws. However, in neither SC Chapter 31 nor SC Chapter 36 are proxies prohibited.

Roger - All wise words of wisdom, but when all the handwriting on the proxies are the same, and it's a burden of proof issue. When we involved our attorney, he basically asked us "How are you going to prove it". It was obvious that some of the ballots had been mailed in by someone else other than the resident who signed the ballot, since some of the residents rescinded their ballot at the election in order to revise their vote, only to find that the ballot didn't have 5 names listed, but just one. Other ballots had been tampered with. That's why I say, why bother with proxies. It's could be as much as 2 years when the next election takes place, but I'm going to do my best to get rid of the proxy system before the next election. I'm even writing the legislature in Richmond about this.

I believe the non-profit corporations are cover by SC law and sepecificly cover Home owners association. Reference in our By-laws is minimal and confusing.
******************************************************
Section 8. Proxy. Votes may be cast in person or by written proxy. Proxies must be filed with the Secretary before the designated time of each meeting.

***********************************************

The above says "time of each meeting." This could mean you can use a Proxy at a regular meeting. It so happens that all regular meeting are closed. Also there is no method that describes the chain of custody as there is for a Vote on the Ballot. Above says Proxy should be filed with secretary but mentions no form to be used.
But as usual, our board just will not address these kinds of issues.
I don't know what we do if the vote for quorum and proxy is on the same paper. The vote is secret and sealed, therefore not opened until after meeting starts. There is no provision to treat a proxy vote other than to file it with the Secretary, so the Proxy is never given to anyone until the count is made. I know we have never held a strictly legal meeting, because the Board refuses to enforce certain condition of our Covenamts. It is one thing not to know, or gorget or "whatever", it is a different animal to not enforce covenants for 28 years. I also suspect we are not alone and the owners seem to desire to not be bothered, even when they know. Also our instructions say there can be no marks on any ballot other than votes for candidate, there is usually a place for write-ins and you can be nominated from the floor. Any other material in the sealed envelope disqualifies the vote, I agree, there is no place for Proxies in an association of homeowners, they are NOT corporations that operate for profit. If memory serves, when the votes are counted the proxies are handled to the folks doing the counting already opened. There is no announcement of the tally of the proxy voting, and no one authenicates the proxy. It's another mess.

Robert, Welcome to my world.

I've seen this movie before - Many of the resident owners (who are not entrenced or involved in the issues and projects), judge from afar. A couple of things helped us last year when we passed a budget resolution that requires that all contracts over $5000 be reviewed by our budget committee. We have an annual audit every year and reserve study down ever 5 years. These checks and balances seem to work in our favor, so that the board really can't go off on a tangent and spend money just as they wish and the homeowners seem to be more compfortable about the budget. Regarding your comment about doing things at little or no cost - ... We previously had some great volunteers that would do the small things like remove dead (fallen) trees from the common area or trim trees when needed, or cleanup the overall grounds; but one fellow moved away and the other fellow has too much other stuff on his plate right now. The residents never really appreciateed all the work that these committee volunteers did, but now we're paying for it, since our grounds maintenance contractor keeps coming at us with additional contract work that isn't covered in our base contract with them. Since the real estate market is doing so poorly, we're seeing many more rental properties; so I have to empathize with you on off-site or absentee owners. They just don't seem to care or maybe they're just too cheap to care. It's sad that you can't get more volunteers around here and whenever someone makes a complaint, I always take that opportunity to try to get them to volunteer. In some cases, I like to tell them that they are "either part or the problem or part of the solution".

OP here. I had a family emergency and have been away a few weeks. Don't know if anyone will see this before tomorrow (4-5) when our annual mtg. will be held. I checked the proxy for specifics, it says "I, the undersigned member of the ___Community Association, Inc, do hereby constitute and appoint ________ as my proxy for the annual meeting to be held_____. There's a line for the homeowner to sign and date the form. However, I just noticed that the HOA pres. used a form from 2 years ago, and it states that the mtg will be held on 4-1-2006. I guess this makes the whole thing null and void. Some additional info from the by-laws:

"A quorum shall be required for any meeting where action by owners is required. Quorum shall be by presence of the owners in person or by proxy who are entitled to cast a majority of the votes of the owners."

"Each owner may vote in person or by proxy. All proxies shall be in writing and filed with the secretary."

No specific rights seem to be assigned to the president. There isn't any place on the proxy for a himeowner to write in their choices for voting. Thanks again, Rene

Rene,
You will find some answers in your by-laws. I take it you are an HOA. "Majority " in HOA, unless specified is over 50%.

The error in the date on notice would only be a problem is someone contested it and they would have to show cause.

Nothing you said specifies if the proxy is just used for Quorum or used for any and all business that comes before the Board or is there an exception to using the Proxy to vote for Board Members. Personally, the would be better getting rid of all proxies and just lowering % needed for Quorum.

I would bet iof their is no place on the proxy that list candidates names, the proxy can not ne used to vote on elections.

What you have described may be open to a critical look but the importance of holding the meeting should over=ride the mistakes, especially if correct dates are listed elsewhere on the package.

If the ballot for BOD is handled in such a way that the ballot can be verified without opening the envelope and there is designated spaces foe candidates and space for write-ins, if allowed,all should be well. Whoever holds an assigned proxie votes matters before the Board, in addition to their normal vote. If this is by chance a Condo, you are in trouble.

Oh to be a fly on the wall at your meeting.

Hope you will share the outcome with us.

I'm reporting back on our Annual Meeting over the weekend. All I can say is Holy you-know-what!!! I've come to the conclusion that the folks in our HOA just don't care, they are more concerned about the refreshments served than what the board is up to. We had a very small turnout, needed proxies to make the quorum. I did mention the incorrrect date on the form and everyone said it was just fine. And only 3 nominations, including the pres.' friend, who used to be both the pres and the treasurer. Everyone easily voted in. When I gave the treasurers report before the nominations, I indicated that we are being audited by the Feds from tax year 2005. I said the accountants told me it probably was because the tax info wasn't dropped off to them until 9 weeks after the taxes were due, and we were dinged with a late penalty. No response, no questions, it didn't seem to phase them. Ten minutes later they voted him back on the board. From what I hear, about 4-5years ago these 2 were on the board together and they were both voted off, and they somehow have managed to weasel their way back on. The 2 of them are also in the process of trying to kick one of the homeowners/board members out of the association. SHe put her son and DIL on the deed, some money changed hands, and she has a life estate. These 2 guys have a vendetta of some sort towards her, probably because she has challenged them in the past. SO they are giving her a hard time and consulting lawyers and trying to make something out of it. I left the meeting frustrated because I realized things will never change. I will continue my second year as treas. but beyond that I don't know. At this point the only reson to stay is to keep an eye on these 2 and make sure they don't spend us into the poorhouse.