I’ve been spending a good deal of time recently attending the annual membership meetings of a number of the ROCs we represent and helping many of our communities prepare for these meetings.

I thought I’d list a few reminders for board members and managers of condominium and cooperative associations preparing for annual meetings:

  • The annual meeting is a meeting of the members–it’s not a board meeting.   While it’s common for the board members at the annual meeting to sit and face the unit owners, the directors should remember that it’s the membership that will be voting on the issues on the agenda.
  • The agenda should concisely and clearly list what business will be considered by the membership.  Only items on the agenda can be considered by the members.
  • Ballots are NOT proxies and cannot be used to establish a quorum.   While only twenty per cent of the unit owners are needed to cast ballots in order to conduct an election of the association’s directors, other items that require the approval of the unit owners at the annual meeting must occur at a meeting where there is a quorum of the membership’s voting interests present.  That quorum requirement is usually a simple majority of the voting interests.
  • As we all know, the quorum requirement can be satisfied through the use of proxies that allow a unit owner who does not attend the meeting to appoint a proxy holder to cast that absent unit owner’s vote.   Florida statutes governing condominium associations and cooperative associations allow both limited and general proxies to be used to help establish a quorum.

Occasionally, a cooperative or condominium association will have an annual meeting where the unit owners will not be voting on any item that would have to be included on a limited proxy form.  Communities that are fully funding reserves and conducting annual audits would thus not be voting to waive those requirements and might have no other issues requiring a unit owner vote requiring limited proxies.  However, managers and board members in these communities should still deliver a general proxy form to the unit owners and take great care to stress to the membership the importance of properly completing and returning those general proxies.   Keep in mind that if the unit owners decide that there’s no reason ton attend the annual meeting (since "nothing important" is happening) and not enough of those unit owners return completed proxies to the association, the association may not be able to conduct any official business at the annual meeting because a quorum was not obtained.

Hopefully, problems of this nature will remain extremely rare in Florida’s resident owned communities.

We’ll be posting the dates and locations of this season’s last set of seminars as well as several speaking engagements within the next two weeks and hope you’ll be able to attend one of those events.

 

 

 

 

  • Jim

    Dear Mr. Gordon,

    An election of Directors is just as much a transaction of business as any other vote is. Since when does a transaction of business not require the presence (the ability to vote in a vote or election) of a quorum (the minimum required number) of voting Members (persons having the right to vote in the vote or election) in order to be legal?

    Also, why does the decision of electing Directors require the voting presence of only 20% of the Members while any other decision requires the voting presence of more than 50% of the Members? Since when is the decision of electing Directors less important than any other decision is?

    You seem to be saying that a general proxy (a power of attorney given by the Member to the proxy holder to vote in his or her stead in whatever manner the proxy holder chooses) is required for a vote or election that is NOT stated in the written notice of the Members meeting, whereas a limited proxy (a power of attorney given by the Member to the proxy holder to vote in his or her stead in the manner specifically stated by the Member on the limited proxy form) is required for a vote or election that that IS stated in the written notice of the Members meeting.

    Although I understand the logic behind the distinction between a general proxy for what is NOT stated in the written notice and a limited proxy for what IS stated in the written notice, what I don’t understand is why the Members don’t simply vote by mailed ballot in any vote or election that IS stated in the written notice of the Members meeting (I’m assuming that the Members are entitled in the Bylaws to vote by mailed ballot in a vote or election).

    If a quorum of voting Members actually votes by mailed ballot in a vote or election that IS stated in the written notice, then a quorum of voting Members is present (present from a voting perspective and therefore able to vote) by mailed ballot in the vote or election that IS stated in the written notice, and consequently the vote or election that IS stated in the written notice is legal. That accomplishes the same thing that a limited proxy does, except it does not involve a proxy holder.

    A proxy (a power of attorney given by the Member to the proxy holder to vote in his or her stead) is required ONLY for a vote or election that is NOT stated in the written notice of the Members meeting (that is, IF a quorum of voting Members is NOT actually present in person at the Members meeting).

    However, if the Members are NOT interested in having a vote or election that is NOT stated in the written notice of the Members meeting, then there is no reason for the Members ever to vote by proxy for anything at all.

    It is precisely because all necessary business of an Association requiring decisions to be made by the Members of the Association can be legally transacted by mailed ballot at the Members meeting without having to involve a proxy holder that Arizona began to prohibit proxy voting in Arizona Associations in 2005.

    Proxy voting is simply NOT necessary. However, proxy voting IS dangerous to the Members.

    Although there is nothing wrong with proxy voting when each absent Member sends his or her own proxy holder to the Members meeting (for example, ten absent Members sending ten different proxy holders to the meeting), what the Members must NEVER do (but what usually happens) is give a power of attorney to the SAME person to vote in their stead, because doing so DEFEATS the purpose of a quorum requirement, which is to PREVENT an unduly small number of persons (or a SINGLE person) from acting on behalf of the entire Membership.

    Making a SINGLE person the proxy holder for the Membership abdicates to that SINGLE person the right of the Members to make their own decisions. It turns the Members meeting into sham, because when a SINGLE person becomes the proxy holder for the Membership, what was supposed to be a decision by the Membership turns into nothing more than a decision by that SINGLE person, in which case there might as well not even be a Members meeting.

    Any proxy that says that the proxy is to be used ONLY for establishing the presence of a quorum is a lie.

    It is by enabling the proxy holder TO VOTE in a vote or election that a proxy enables the proxy holder to contribute to the presence (the VOTING presence / the ability TO VOTE) of a quorum (the minimum required number) of VOTING Members (persons having the right TO VOTE) in the vote or election.

    A proxy is a power of attorney given by the Member to the proxy holder TO VOTE in his or her stead in a vote or election. Any proxy that does not allow the proxy holder to vote in a vote or election, in which case a power of attorney is NOT given by the Member to the proxy holder TO VOTE in his or her stead, is NOT a proxy.

    Jim