If you live in a condominium, cooperative or HOA, you’re effectively acting as part of a participatory democracy run by an elected group of volunteers. And as with any democracy, those affected by the board’s decisions are encouraged to get involved in the process of governance in order to preserve the best interests of the community, and to prevent power from congregating in the hands of a small group and eventually going unchecked.
But like any democracy, condos, co-ops, and HOAs are imperfect. Some community residents split their time between multiple homes, or rent their units, or are simply too slammed between work and home life to truly get enmeshed in their association’s affairs. For this reason exists the proxy, a written statement by an individual owner or shareholder that authorizes a surrogate to vote on his or her behalf in an association election or referendum. But because a constituent is by definition abdicating authority to another in a proxy vote, the rules governing proxies need to be both well defined and thoroughly understood. They can vary by association, city or state, and be taken advantage of by unethical individuals.
What Are Proxies?
Before ironing out the dos and don’ts of proxy voting, it helps to fully understand what a proxy is, what purpose it intends to serve, and whether or not such a method is even permitted in an individual association.
“A proxy is essentially an assignment of an owner’s voting right to another person, in order to enable the proxy-holder to vote at a meeting in the absence of that owner,” explains Aaron Shmulewitz, a partner at the law firm of Belkin Burden Wenig & Goldman, LLP, in New York City. “There are only a few requirements for a proxy to be legally enforceable: it must be written, it must be signed by the owner, and it must be dated. A proxy does not have to be on a specific prescribed form, and many boards and attorneys will accept proxies that are faxed, emailed, or sent via other electronic means.”
According to Scott A. Rosenlund, a shareholder at Illinois-based law firm Fullett Rosenlund Anderson PC, it’s important to distinguish between a proxy and a ballot, as they are meant to serve two separate functions. “I occasionally encounter associations using a form called a ‘proxy/ballot,’ the concept of which is not supported by law in Illinois, where I practice, as proxies and ballots are distinct legal documents, each with a unique purpose,” he says. “Proxies are properly used when there is a two-step process: homeowners who wish to do so collect proxies and bring them to the annual meeting, at which point those proxies are exchanged for paper ballots.”