Proxies: the Good, the Bad, and the Indifferent

Elina B. Gilbert | Wednesday, December 4, 2013 | Community Associations Miscellaneous

In Colorado, use of proxies by owners must be permitted by associations.  Therefore, associations in Colorado must allow owners to attend meetings and submit their vote via proxy.  But is the use of proxies a good or bad thing?

The Chicago Tribune recently posed this question in an article and received more than 120 responses from its readers that span the country.   As one might suspect, the responses came down on both sides of the issue.

Individuals favoring the use of proxies brought up such positives as: 1) proxies afford owners who do not live near the community the opportunity to still have a say in association issues; 2) proxies save money; and 3) proxies allow communities to have elections where most owners attend by proxy—otherwise there would not be quorum or the opportunity to elect directors.

Opponents of proxies, however, were more concerned with the possible abuses that come with proxy use, such as forgery and alteration.  Additionally, opponents felt that proxies allow some owners to push their personal agendas by collecting large numbers of proxies.

So what’s the solution?  Is there a way to use proxies and still address both sides of the issue?  Some readers recommended use of absentee ballots, quorum-only proxies, or limiting the number of proxies that may be held by a single owner.  What do you think about all of this?  Are proxies really evil, or need to be further controlled?  Do you have a horror or happy ending story that involves proxies?  If so, please share!

Comments

I have read all over the internet both sides of the issue. One very vociferous website purports the elimination of proxies altogether to foster community. I don't see how one fosters the other but I digress. I think the best use of a proxy would be two fold, for those things that are provided prior to the meeting and cannot be changed at the meeting and are voting options, a directed proxy could be used. the selfsame proxy would be used for quorum purposes for all other business and the proxyholder would vote that proxy as they see fit for such business as can be properly brought before the membership for a vote. for example elections where in the floor is open to nominations and there is a nomination from the floor that could not possibly be pre-announced. but a budget which cannot be changed at the meeting could be voted on by the proxy giver on the proxy itself. the only concern would be that the proxy must be given to a neutral honest third party to avoid the changing of votes or proxyholders. Maybe I am naïve, but I have never been involved with an association where there was proxy tampering in 18+ years. I have however, been involved with many, many associations that can't even pull a quorum with proxies after 4 attempts to have a meeting and the quorum count being cut by half. this is likely more closely related to poor documents and to high a quorum requirement but personally I believe that most of the time the apathy of owners is the cause. Without proxies we would have 40 annuals without quorums, with proxies we at least only have about 30 without quorums.

I think proxies are of great value and I have not seen abuses in the 13 years I have been working in this industry. BTW- I believe the statement near the end of your first paragraph is misleading. Owners don't submit their vote via proxy, rather they are signing over their right for someone else to vote for them.

My community has less than 15% owner occupancy, so we have used proxies heavily for 30 years. There was a lot of abuse. Proxies were directly solicited by board members and the property manager in the annual meeting notice and because most out of town owners had no clue who to appoint, they automatically gave their proxies to board members. Nominations for the board were accepted on the floor of the annual meeting, further eliminating any meaningful voice by absentee owners. This perpetuated certain individuals remaining on the board for years, and when someone did challenge a board seat, there was not much hope of defeating them. In recent years we tried directed proxies, but that just amounted to certain other people amassing large numbers of proxies and controlling the vote, rife with the same opportunity for abuse as before. We now do a mail in ballot, with nominations closed prior to the annual meeting notice and ballots going out. We have had great response to the mail-in elections, last year had 60% return ballots. Out of town owners are very pleased to have an actual voice and people campaign for board seats. More informed choices are being made, which is nothing but positive. In my community at least I can say that we believe we found a successful alternative to proxies.

In my HOA I have seen abuse of the proxy process. For three straight elections an individual has solicited proxies via flyers that have been placed on or under doors of condos in 400+ unit community. One year, the flyers actually had copies of a filled in proxy that a homeowner would just have to sign and date and them mail in to the manager or directly to this person. I suspected forgery because each year a number of proxies from this individual would be rejected (example: the owner had sold the unit). This year, water-marks were put on the proxies that were mailed to owners and copies were not allowed. This individual was up for re-election and did NOT get elected. Hmmmm.

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