HOAleader.com - Tip of the Week - July 13, 2012
Published: Fri, 07/13/12
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Clean Up HOA Elections: Prevent Proxy Problems
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With concerns about voter fraud in this presidential
election season, this week's tip reminds you to be
concerned with a similar problem in your HOA elections.
Here are two tips for preventing proxy fraud and abuse.
1. Owners should probably be allowed to see proxies.
In most states, proxies are considered association
records available for owners to review. "I do think most
Michigan associations allow their members to inspect
the records at a reasonable time, on reasonable notice,
and during normal business hours," says Nathaniel
Abbate Jr., a partner at Makower Abbate & Associates
PLLC in Farmington Hills, Mich., who represents
associations. "Proxies would be among the things
you could see."
However, there could be twists on a state's open
records rule, as there may be in California.
"A couple of years ago, there were changes to
California's Davis-Stirling Common Interest
Development Act, and section 1363.03 of
the civil code addresses voting within community
associations," says James R. McCormick Jr., a partner
at Peters & Freedman LLP in Encinitas, Calif., who
represents associations. "It sets forth procedures
for elections, ballots, and proxies. You now have
two-page proxy. The first page says, 'I designate
so and so,' and the designee has to be an owner, not
the board of directors. The second page is the
designation of how the owner wants to vote. There's
nothing secret about proxies. But the reasonable
interpretation of the statute is that the second page
is a ballot, so that's secret and not allowed to
be viewed by owners."
2. Remember that proxies aren't inherently bad.
"There's nothing preventing any of the owners from
soliciting proxies from anyone," says McCormick.
"And the reader asking these questions
can solicit his own proxies, too."
3. Also remember proxies can be faked and abused.
"If they know some people aren't going to attend
the meeting, owners can make several copies of a
proxy, signing the absent owners' names," says Jim
Comin, president of The Management Trust-CDC, an
association management firm in Kirkland, Wash.
"It's deceitful and forgery, but it can be done.
We had to watermark proxies so you couldn't
copy them."
Learn how Comin prevented that problem, another way
proxies get misused, and additional proxy-management
tips in our new article, How to Identify HOA Proxy
Fraud or Abuse:
http://www.hoaleader.com/members/737.cfm
Best regards,
Matt Humphrey
President
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