A proxy is a person appointed to represent another. The instrument by which a person is appointed is also called a proxy. Proxies play a very important role in homeowner associations. Using proxies ensures the ability to meet quorum requirements (the minimum number of members needed to hold a legal meeting). Proxies permit one person to represent many members so while the actual body count at the meeting may be few, the quorum can still be met. Using proxies is particularly useful in HOAs comprised of second homes or rentals where many members may be far away.
Use of proxies can be contentious if there is a contested election or a disagreement on a proposed bylaw or special assessment. At those times, certain members may scurry around trying to convince others to appoint them as proxy so a unified voting block can be amassed. While the proxy giver can actually direct how the representative votes, it's more common to leave that decision up to the proxy holder.
There are several significant basics of the proxy system that should be understood by all that employ them:
- A vote by a proxy holder is just as effective as the owner of record.
- The proxy holder may not vote the way the owner would unless given specific written direction on the proxy form itself.
There are two types of proxies:
- General: The proxy agent may vote on behalf of the owner without restriction. The proxy will be valid for annual or special meetings within the ensuing 12 months, unless provided otherwise.
- Limited or Directed: Restricts how the proxy agent may vote, is limited to a specific event, a specific issue or directs how the agent must vote. If the proxy fails to follow the giver's directions, the giver can challenge the vote. The determination of whether to grant a general or limited proxy is totally within the discretion of the giver.
As far as the proxy form is concerned:
- It should be written.
- It should clearly describe the time period for which the proxy is valid.
- It should bear the giver's signature.
- It should be revocable by the giver prior to the event (but not after).
- It should be given freely.
- It is not transferable.
Some proxy pointers include:
- In the case of error or fraud, an owner may issue more than one proxy. All proxies should be inspected for accuracy and duplication.
- Misleading information contained within a proxy is grounds to challenge the meeting or vote.
- A director may not give a proxy to another director or person. Directors cannot delegate power to another.
Proxies appoint the people that will punctually perform the proxy's purpose. Picture my point?