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Q&A: Proxy Dilemma

 Proxy Dilemma

Q Two weeks prior to our annual condo election, the unit owners receive their  proxies in the mail. However, a board member who was up for re-election  obtained a proxy from the manager two weeks earlier than all the unit owners. I  addressed this issue at the annual meeting. His reply was that he was going on  vacation and that he only received one proxy from the manager. However, he was  back from vacation before the meeting. Also, he submitted several proxies at  the meeting. Should he have had access to a proxy before every other owner as  he could have duplicated the proxy and used it to gather other proxies? There  is no way to know.  

 Also, a unit owner attended the meeting and another unit owner (board member)  submitted that unit owner’s proxy. Should these proxies have been allowed in the vote?  

 —Improper Proxy  

A “Because a board has the power to determine assessments, manage common elements,  and take actions that will directly impact the finances and lives of the unit  owners,” says Alan Lipkind, a partner in the Business Litigation, Condominium Law,  Design & Construction and Real Estate Groups at the law offices of Burns & Levinson LLP in Boston, “it is critical that elections not only be conducted fairly, but that there be no  appearance of impropriety. Avoiding the appearance of any impropriety will aid  in a condominium avoiding the cost and stress attendant to a challenged vote.  

 “Before I address your specific questions, I would like to address the word “proxy.” A proxy form is not an absentee ballot. The appointment of a proxy is not the  appointment of someone to speak for a unit owner at a meeting. Technically  speaking, a proxy is a unit owner’s appointment of an agent to cast his vote in an election and nothing more.  Proxies can be either discretionary or directed. A discretionary proxy means  that the person holding the proxy can cast the unit owner’s vote however he sees fit. A directed proxy means that the unit owner has  identified how he wants his vote cast at the meeting, and at the meeting, that  unit owner’s vote must be cast as specified. Whether a proxy is limited or discretionary  should be explicitly stated on the proxy form. Before distributing proxy forms,  a condominium should review its documents as well as the laws of the  jurisdiction to be certain that the use of proxies is authorized, and that all  requirements are complied with.  

 “A deadline should be established for the delivery of proxies to the condominium  or its managing agent prior to the meeting. Proxies are reviewed prior to the  start of the meeting by whoever is running the meeting, (e.g. the management  company). To ease the determination of proxy validity, only the form of proxy  distributed by the condominium prior to the meeting should be accepted. Some  condominiums distribute proxies with the notice of meeting by mail, along with  a return envelope. Notarization can be required. Other steps can be taken to assist in the  determination of proxy validity, such as using colored proxy cards and  maintaining signature cards for unit owners. On the other hand, the more  complicated the proxy process is, t  he less likely it is that unit owners will submit proxies, rendering it less  likely that a quorum will be achieved. As technology has evolved, so has the  distribution and collection of proxies. Some condominiums distribute meeting  notices and proxy forms by email to save on mailing costs. This places a  greater burden on management to determine the authenticity of proxies. I have  seen faxed proxy forms accepted from unit owners in smaller condominiums. While  fax and email proxies make it easier for a unit owner to participate, they make  it more difficult to determine authenticity where that is a concern.  

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2 Comments

  • do signatures for a condo bylaws change need to be notarized if given at an annual meeting
  • Is the honesty of each unit owner being questioned? Is this the problem with the hostility among the members of the board and non-members of the board? The whole atmosphere of the community is unsettling.