Participation in meetings and decision-making processes is vital for the smooth functioning of a community association. However, homeowners cannot always attend these meetings in person. This is where the concept of proxy voting becomes essential. Understanding how proxy voting works, its benefits and challenges, and the requirements for using proxies can help HOA boards ensure that all members' voices are heard, even when they can't be present.
What's a Proxy?
A proxy is a legal document that allows an owner to appoint another person to act on their behalf in a meeting. The proxy holder can vote on issues, make decisions, and represent the homeowner's interests as if they were present. The key advantage of using a proxy is that it allows homeowners to participate in important community decisions, even when they can't attend the meeting in person.
Community association board members should consult their governing documents and state statutes to understand who can be selected as a proxy. The documents typically outline specific criteria for who is eligible to serve as a proxy. For example, some communities may require the proxy holder to be another owner within the community, while others might allow for broader choices. Ensuring the proxy meets these requirements is crucial for the vote's validity.
In community associations, the Bylaws dictate how many votes are assigned to a member. Generally, each unit or lot has one vote. Therefore, one proxy per household is permitted. The last one received is valid if each spouse submits a separate proxy. Some associations vote by percentage ownership. Proxy management is critical because it directly impacts the outcome of elections or other impactful votes by the membership.
When are Proxies not allowed?
Robert’s Rules prescribes that proxy voting is ‘not permitted in ordinary deliberative assemblies.’ In other words, a board member cannot assign a proxy to another person for participation in a regular board meeting because the purpose of board meetings is for the elected members to hold discussions on topics and reach a consensus after all opinions have been heard.
What is Proxy Voting?
Proxies are useful tools for association annual meetings, where community members elect their board of directors and conduct business as dictated by the association bylaws. Proxy voting allows homeowners to vote in community association meetings without being physically present. When a homeowner appoints a proxy, they authorize that person to vote on their behalf. This can be particularly useful when a homeowner cannot attend a meeting due to other commitments, illness, or travel.
There are two types of proxy votes: directed and undirected. A directed proxy specifies exactly how the proxy holder should vote on a particular issue. This is useful when the homeowner has a strong opinion on a specific matter and wants to ensure their vote is cast accordingly. On the other hand, an undirected proxy gives the holder the freedom to vote on any issue that arises during the meeting based on their judgment. This type of proxy is more flexible and requires the homeowner to trust the proxy holder to make decisions in their best interest. Variations include a limited proxy (or limited directed proxy), which authorizes the proxy holder to vote on certain issues only, or a quorum proxy, which counts for obtaining a quorum and nothing else.
Benefits and Challenges of Having a Proxy
Benefits:
- Participation: The most significant benefit of having a proxy is that it allows homeowners to participate in meetings even when they can't attend in person. This ensures their voice is still heard and their vote is counted in the decision-making process.
- Feedback: Proxy voting also provides the HOA board with more comprehensive feedback from the community. When more members participate in the voting process, the board can make decisions that better reflect the community's overall preferences.
Challenges:
- Confusion: One of the challenges of proxy voting is that it can be confusing for homeowners. Proxies are sometimes mistaken for absentee ballots, but they serve different purposes. While an absentee ballot allows a homeowner to vote on specific issues without attending the meeting, a proxy assigns someone else to vote on their behalf.
- Trust: Homeowners must trust their proxy holder to vote in their best interest, especially in the case of undirected proxies. This requires careful consideration when selecting a proxy holder.
What's on a Proxy Form?
A well-constructed proxy form is essential for ensuring the proxy voting process is clear and legally valid. Typically, a proxy form will include the following information:
- Name and Address of the HOA: This identifies the association for which the proxy is being used.
- Date and Time of the Meeting: This ensures the proxy is only valid for a specific meeting. Add language allowing the proxy to remain valid in the event the meeting must be adjourned due to lack of quorum.
Deadline and instructions for returning the proxy: To be counted, proxies must be returned by a specific time and date. Proxies received after the cutoff are not valid.
- Appointment of Proxy Holder: The form should clearly state who is appointed to vote on the homeowner's behalf.
- Homeowner Rights: The form should outline the homeowner's rights when assigning a proxy, including any limitations on what the proxy holder can decide.
- Signatures: The homeowner (name as shown on the deed) should sign the form to validate it.
HOA board members must ensure that proxy forms are properly filled out and submitted according to the association's rules. Improperly completed forms could be invalidated, potentially excluding a homeowner's vote from the decision-making process.
Proxy for Quorum
One critical role of proxies in community association meetings is helping to achieve quorum. A quorum is the minimum number of members who must be present (either in person or by proxy) to conduct official business. Without a quorum, the meeting cannot proceed, and important decisions may be delayed.
Proxies are counted in the overall attendance, helping to reach the necessary quorum. Depending on the association's governing documents, a specific number of votes or a percentage of the membership might be required to achieve quorum. Therefore, encouraging homeowners to submit proxies when they can't attend meetings is crucial for the smooth operation of the association.
If a homeowner fails to designate a proxy by name, the association can stipulate that a specific board member will be assigned as a proxy for quorum purposes only.
Conclusion
Proxy voting is a valuable tool for ensuring broader participation in community association decisions. By understanding the role of proxies, the process of proxy voting, and the importance of clear and complete proxy forms, HOA board members can help facilitate a more inclusive and effective governance process. Ensuring that all homeowners, regardless of their ability to attend meetings, have a voice in the community will lead to better decision-making and a more engaged membership.
About Community Association Management Services
CAMS is a leading provider of community association management services dedicated to offering comprehensive and customized solutions for homeowner’s associations, condominiums, and other community associations. With a focus on transparency, integrity, innovation, and excellence, CAMS has been a trusted partner for communities across the Carolinas for over three decades. Visit www.camsmgt.com/choose-cams to learn more.
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