PROXIES: WHAT ARE THEY AND WHEN CAN WE USE THEM? By Eric Glazer, Esq.
PROXIES: WHAT ARE THEY AND WHEN CAN WE USE THEM?
By Eric Glazer, Esq.
The term “proxy” is often thrown around incorrectly. In simple English, if you can’t make it to a meeting to actually cast your vote or appear in person, you sign a document called a “proxy” which allows someone else to appear on your behalf. They act in your place. The proxy form may give the proxy holder little power, or a lot of power, depending upon how the proxy itself is written.
As we should all know by now, a quorum of owners (in attendance by person or by proxy) is required in order to have the annual election. Let’s say you cannot make it to the annual meeting, but you know that your neighbor Joe is going. You can execute a limited proxy form, simply authorizing Joe to show up for you in order that your attendance be counted toward a quorum. Or, you can give Joe more power and sign a general proxy, allowing Joe the ability to do all things on your behalf as if you were present. This may include actually voting in the annual election for you, voting on waiving reserves, voting on adopting amendments to the governing documents and other different types of powers.
The BIG DIFFERENCE between condominiums and HOAs when it comes to proxies is that in an HOA, proxies are allowed when voting in the election, unless the documents say they are not allowed. That’s why, the campaigning is even different in an HOA as compared to a condominium. In an HOA, you don’t need your neighbor’s vote in order to win the election, you simply need their proxy. If you get their proxy, on the night of the election, you can show up holding a dozen different proxies from 12 different homes and you would get 12 ballots, one for each proxy that you have. Then, you would get another ballot for your own home. You get 13 votes, even though none of the people that gave you their proxy is at the meeting.
The condominium statutes do not allow for proxy voting in the election. Why the two statutes should differ makes no sense, but they always have. In a condominium, you can give your neighbor a proxy which allows them to appear on your behalf at the annual meeting, solely in order that your attendance be counted toward a quorum that is needed, but you can’t give them a proxy which turns over your right to vote to them.
Unit owners in a residential condominium may vote by limited proxies for votes taken to waive or reduce reserves, for votes taken to waive the year end financial reporting requirements; for votes taken to amend the declaration ; for votes taken to amend the articles of incorporation or bylaws pursuant and for any other matter for which the statute requires or permits a vote of the unit owners.
To be clear, if you are going to be in attendance at a meeting where a vote is being taken on these issues, you do not need to sign a proxy form. Unit owners may vote in person at unit owner meetings. This subparagraph does not limit the use of general proxies or require the use of limited proxies for any agenda item or election at any meeting of a timeshare condominium association or a nonresidential condominium association.
In a condo a proxy given is effective only for the specific meeting for which originally given and any lawfully adjourned meetings thereof. A proxy is not valid longer than 90 days after the date of the first meeting for which it was given. Each proxy is revocable at any time at the pleasure of the unit owner executing it. An example of a limited proxy to use can be found by clicking here.
While the condo statute does not say what information the proxy must contain, the HOA statute does, and says:
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.
While the condo and HOA statutes allow the owners to vote by proxy if they can’t make it to a meeting, both of these statutes forbid directors from voting by proxy. A board member cannot give another board member his or her proxy to vote on an issue the board must vote on, even if the board members is going to be out of town. That board member can however take advantage of today’s technology and cast their vote by speakerphone or zoom.
There’s a lot to know about proxies…and hopefully this cleared up some of the confusion surrounding them. Or…… did I just make it even more confusing than you thought?
