PROXIES- COMPLIANCE WITH THE LAW
Homeowners may be given the option of attending the annual meeting in person to vote for the board members or returning the proxy.
HOAs MUST BE IN COMPLIANCE WITH THE LAWS GOVERNING PROXY DESIGNATION.
Proxies, a type of absentee voting, are a valuable part of the voting process, but the board of directors MUST be aware of the legal implications that can arise when proxies aren’t handled properly.
PROXY VOTING TO ELECT DIRECTORS TO THE BOARD. Homeowners should receive a proxy in the mail along with information (called a proxy statement) describing the issues to be voted on. The HOA is legally required to send details of all items to be discussed at their annual meeting, along with a copy of the annual report. Based on the information they have received in advance each homeowner has the opportunity to give their consent for someone to cast their vote at the meeting on their behalf.
INFORMATION THE PROXY SHOULD INCLUDE:
- name of the association
- the word proxy under the name of the association
- a statement that ____________ is the person’s proxy for the meeting
- all issues that are to be voted on at the meeting
- a place for the member to check “yes” or “no” or a place to vote for any candidates being considered for office*.
- a statement letting homeowners know the date the proxy is good for
- a place for the member to sign and date the proxy.
*HOAs should also include with the proxy ballot, background and qualifications of the candidates listed on the ballot.
Disclosure Requirement A valid proxy MUST include full disclosure of all important information regarding the upcoming homeowners vote. The Annual meeting Notice should explain any additional rules that apply to proxy voting. The Act forbids anyone from soliciting a proxy using material misstatements, omissions or fraud.
Is a “limited proxy” a ballot, when sent to the members to mark how the proxy holder should vote?
No, the proxy holder should receive a ballot at the meeting just like the members present and cast the ballot as the proxy form instructs him to do. A proxy ballot is the actual vote cast by the proxy. In some states a power of attorney (POA) may be required before requesting a proxy ballot. The Board of Directors should be clear on the state laws regarding this issue!
(Note: limited proxy may be also referred to as an instructed proxy form or “specific proxy forms)
Roberts Rules of Order and other sources of parliamentary procedure generally prohibit nonprofit directors and members from voting by proxy. The rationale is that “. . . proxy voting is incompatible with the essential characteristics of a deliberative assembly in which membership is individual, personal, and nontransferable.” See, Robert, Henry M. (2000). Robert’s Rules of Order Newly Revised, 10th ed., p. 414–415. Thus, nonprofit corporations that have incorporated parliamentary procedures such as Roberts Rules of Order or Sturgis into their bylaws may have indirectly prohibited proxy voting as a result.
A proxy confers authority to act only at the meeting then in contemplation, and in any adjourned-meetings of the same; hence, it may not be voted at another or different meeting held under a new call.