Proxy votes, Annual Meeting

James I don't think you're going to like the answers you get but unless proxy voting is not allowed in your CC&R's (Covenants, Conditions & Restrictions) then the gentleman is correct and he should have been allowed to vote his proxies. I understand that you might not want or like how he would vote but it was wrong to deny him the opportunity and in doing so you denied the votes of 40 members. As to whether or not you have to have a do over is a question for the attorney, if you do, you too can gather proxies to vote for the measures.

I don't understand why he was denied to present the proxies for VOTING. The bylaw you cited dealt with the numbers needed for quorum.

If this was a duly called meeting, with quorum met by MEMBERS PRESENT, then the proxies should have been allowed for voting purposes IF they were in correct form. Were there encough people present to hold the meeting?

In the meantime, work to make sure the bylaws say what you want them to.

James,

The bylaw you quoted this member has nothing to do with whether or not proxy votes are allowed. This bylaw only deals with quorum requirements. In looking for a reason to deny this member his right to vote, you used the wrong reason! Sorry, but it is apparant the BOD did not want this member to vote. Whether the BOD has a dispute with a particular member or not, they should not use their authority to deny any member the right to vote.

As other have stated, your bylaws should state whether or not proxy votes are allowed. I don't know that TX Corp law applies to HOAs. The BOD needs to find out exactly what TX statutes apply to HOAs. Some states have specific HOA statutes for planned communities (HOAs) and condos together with nonprofit corp statutes. Bottom line: if there are TX statutes that apply to HOAs the board should be aware of them as they must be followed the same as the HOAs gov docs must be followed. In most instances the state statutes will override the HOA gov docs.

It may be wise for the board to consult an attorney. If having a new meeting would be a burden to the HOA, so be it. The next time around the BOD should know and understand the gov docs and any state laws governing HOAs before exerting their authority illegally!

JamesE4,
As others have stated, you need to look carefully and thoroughly at your Articles of Incorporation, CC&R's and Bylaws. I am providing some State Laws, but the laws specifically say that "unless otherwise provided in the articles of incorporation or bylaws ......"
So what do your bylaws say about proxies? And, does your Association have specific instructions for carrying out proxies?
If the mention of proxies is absent from your bylaws, one could interpret State Law to mean that proxy voting be allowed.
(I am not a lawyer!!!!). If your board chooses not to allow proxy voting, then amend the bylaws to say so. (Our board has the authority to amend our bylaws.)
If you followed the bylaws for calling/notification of the meeting, I would say that the meeting itself was not illegal, however, as others have already said, not allowing the proxies could be if there are no specifics in any of your docs.
In our POA, most property owners are out of state, (absent). We have our elections via the US Mail, (as is allowed by State Law). This has eliminated, at least here, those with personal interests from seeking proxies from others. They either vote themselves by mail or they don't.
If you are a board member, you HAVE to know your State Laws and docs BETTER than the members. Once the board loses the confidence in their board, it is difficult to regain it. If you have to have a new meeting, and you probably will, it doesn't matter the burden. Be prepared with knowledge and if you don't want that guy to out vote you, go out and get 41 proxy votes!

Lynette

Vernon's Texas Civil Statutes
Art. 1396-2.12. QUORUM OF MEMBERS.A A. Unless otherwise
provided in the articles of incorporation or in the by-laws,
members holding one-tenth of the votes entitled to be cast,
represented in person or by proxy, shall constitute a quorum. The
vote of the majority of the votes entitled to be cast by the members
present, or represented by proxy at a meeting at which a quorum is
present, shall be the act of the members meeting, unless the vote of
a greater number is required by law, the articles of incorporation,
or the by-laws.

Art. 1396-2.13. VOTING OF MEMBERS.A A. Each member,
regardless of class, shall be entitled to one (1) vote on each
matter submitted to a vote of the members, except to the extent that
the voting rights of members of any class or classes are limited,
enlarged, or denied by the articles of incorporation or the
by-laws.
B. A member may vote in person or, unless the articles of
incorporation or the by-laws otherwise provide, may vote by proxy
executed in writing by the member or by his duly authorized
attorney-in-fact. No proxy shall be valid after eleven (11) months
from the date of its execution, unless otherwise provided in the
proxy. Each proxy shall be revocable unless expressly provided
therein to be irrevocable, and in no event shall it remain
irrevocable for more than eleven (11) months. Where directors or
officers are to be elected by members, the by-laws may provide that
such elections may be conducted by mail, by facsimile transmission,
or by any combination of the two.

Business Organization Code chapter 22 Non Profit
Sec.22.159.QUORUM OF MEMBERS. (a) Unless otherwise
provided by the certificate of formation or bylaws of a
corporation, members of the corporation holding one-tenth of the
votes entitled to be cast, in person or by proxy, constitute a
quorum.
(b)The vote of the majority of the votes entitled to be cast
by the members present or represented by proxy at a meeting at which
a quorum is present is the act of the members meeting, unless the
vote of a greater number is required by law or the certificate of
formation or bylaws.

Sec.22.160.VOTING OF MEMBERS. (a) Each member of a
corporation, regardless of class, is entitled to one vote on each
matter submitted to a vote of the corporation’s members, except to
the extent that the voting rights of members of a class are limited,
enlarged, or denied by the certificate of formation or bylaws of the
corporation.
(b)A member may vote in person or, unless otherwise
provided by the certificate of formation or bylaws, by proxy
executed in writing by the member or the member’s attorney-in-fact.
(c)Unless otherwise provided by the proxy, a proxy is
revocable and expires 11 months after the date of its execution. A
proxy may not be irrevocable for longer than 11 months.

John,
On the yellow highlighted area to the left of this panel, you will find a sponsor named CAN, if you click on this you will get to the different states requirement for HOA and condo governance.

I'm no expert, but it appears that just because you may be listed state licensed as an corporation, not all corporation laws apply to HOA and condos. Anyway that is the way I read it and if you want to cite the applicable laws you are referring to, that would be great and help the OP. Mary, knows what she talks about and it is wise to consider her posts in context and intent.

Susan,
I don't think the issue is; if Texas has a non-profit or as it was posted by the OP a not for profit corporation law. I am of the opinion in some states some of these non-profit laws are not applicable to HOAs and condos. If you look at the link I sugessted above you will see under Texas there seems to be some distinction between corporate non-profit and the laws covering HOA's and condos.

I could be wrong and would like someone to post a valid comment about it.

John,

The reason I said that is because at the time I didn't know if there was a TX non-profit corp act. I believe the Corp code applies to corps that are NOT nonprofits. Now I know there is a TX nonprofit corp act, so I feel certain in saying TX Corp. law does not apply to HOAs. Do you know otherwise?

As much as we may wish to be above or outside the mainstream laws, rules, and regulations by forming our little private HOAs --- we ARE STILL GOVERNED BY THE SAME LAWS THAT GOVERN EVERYONE ELSE.

When we try to eliminate personal liability by forming a corporation (even though we may call it an HOA) we then become subject to corporate law.

The same law that applies to ENRON applies to other corporations -- ergo the legal principal of FIDUCIARY RESPONSIBILITY.

Twist and squirm as we may to justify builing a community of private rabbit hutches WE ARE STILL GOVERNED BY THE LAW(S) OF THE LAND.

We might have waived many constitutional rights by voluntarily joining a HOA but we are still governed by the SAM LAWS AS EVERYONE ELSE.

The hierarchy of documents has been previously hashed out in detail but let me remind you that our CC&Rs are LAST on the list.

I am not practising law, merely stating facts.

Anyone wish to wager I'm wrong? I can always use a few more bucks.

John,

IMO, you ARE wrong about one thing. The CCRs are NOT last on the list; the board adopted rules, regs and resolutions (which carry as much weight as any other gov doc) are last on the list. When talking about what laws need to be followed all the gov docs must be included, CCRs, articles of inc, bylaws and board adopted rules,etc. Sorry to burst your bubble!

I'm not an attorney either, practicing or otherwise.

MaryA1,

To be precise:

This is the heirarchy of documents:

1) Federal laws, including but not limited to ADA, FCC, HUD, and any and all laws.

2) State Laws, including Statutes.

3) County/City codes and laws.

FOLLOWED BY,

4) The Association Restrictive Covenants (CC&Rs)

5) The Association Articles of Inc. sometimes called the Charter

6) The Association ByLaws

7) The Association Rules and Regulations

8) Rules and Regulations adopted by the association/Board of Directors

(4-8 are 'lumped together' and generally called 'the documents' by most members)

;)

The omission of state law(s) re: 'not for profit corporation' is the basis for the original topic of this post.

#7 refers to rules such as made by the arch. rev. comm.

#8 refers to rules made re: pool hours, club-house use, etc

CindyF2:

Here is the Colorado CCIOA for Proxy votes:

38-33.3-310. Voting - proxies.

(1) (a) If only one of the multiple owners of a unit is present at a meeting of the association, such owner is entitled to cast all the votes allocated to that unit. If more than one of the multiple owners are present, the votes allocated to that unit may be cast only in accordance with the agreement of a majority in interest of the owners, unless the declaration expressly provides otherwise. There is majority agreement if any one of the multiple owners casts the votes allocated to that unit without protest being made promptly to the person presiding over the meeting by any of the other owners of the unit.

(b) (I) (A) Votes for contested positions on the executive board shall be taken by secret ballot. This sub-subparagraph (A) shall not apply to an association whose governing documents provide for election of positions on the executive board by delegates on behalf of the unit owners.

(B) At the discretion of the board or upon the request of twenty percent of the unit owners who are present at the meeting or represented by proxy, if a quorum has been achieved, a vote on any matter affecting the common interest community on which all unit owners are entitled to vote shall be by secret ballot.

(C) Ballots shall be counted by a neutral third party or by a committee of volunteers. Such volunteers shall be unit owners who are selected or appointed at an open meeting, in a fair manner, by the chair of the board or another person presiding during that portion of the meeting. The volunteers shall not be board members and, in the case of a contested election for a board position, shall not be candidates.

(D) The results of a vote taken by secret ballot shall be reported without reference to the names, addresses, or other identifying information of unit owners participating in such vote.

(II) Notwithstanding section 38-33.3-117 (1.5) (j), this paragraph (b) shall not apply to an association that includes time-share units, as defined in section 38-33-110 (7).

(2) (a) Votes allocated to a unit may be cast pursuant to a proxy duly executed by a unit owner. A proxy shall not be valid if obtained through fraud or misrepresentation. Unless otherwise provided in the declaration, bylaws, or rules of the association, appointment of proxies may be made substantially as provided in section 7-127-203, C.R.S.

(b) If a unit is owned by more than one person, each owner of the unit may vote or register protest to the casting of votes by the other owners of the unit through a duly executed proxy. A unit owner may not revoke a proxy given pursuant to this section except by actual notice of revocation to the person presiding over a meeting of the association. A proxy is void if it is not dated or purports to be revocable without notice. A proxy terminates eleven months after its date, unless it provides otherwise.

(c) The association is entitled to reject a vote, consent, written ballot, waiver, proxy appointment, or proxy appointment revocation if the secretary or other officer or agent authorized to tabulate votes, acting in good faith, has reasonable basis for doubt about the validity of the signature on it or about the signatory's authority to sign for the unit owner.

(d) The association and its officer or agent who accepts or rejects a vote, consent, written ballot, waiver, proxy appointment, or proxy appointment revocation in good faith and in accordance with the standards of this section are not liable in damages for the consequences of the acceptance or rejection.

(e) Any action of the association based on the acceptance or rejection of a vote, consent, written ballot, waiver, proxy appointment, or proxy appointment revocation under this section is valid unless a court of competent jurisdiction determines otherwise.

(3) (a) If the declaration requires that votes on specified matters affecting the common interest community be cast by lessees rather than unit owners of leased units:

(I) The provisions of subsections (1) and (2) of this section apply to lessees as if they were unit owners;

(II) Unit owners who have leased their units to other persons may not cast votes on those specified matters; and

(III) Lessees are entitled to notice of meetings, access to records, and other rights respecting those matters as if they were unit owners.

(b) Unit owners must also be given notice, in the manner provided in section 38-33.3-308, of all meetings at which lessees are entitled to vote.

(4) No votes allocated to a unit owned by the association may be cast.

Source: L. 91: Entire article added, p. 1745, § 1, effective July 1, 1992. L. 2005: (1) and (2) amended, p. 1385, § 15, effective January 1, 2006. L. 2006: (1)(b)(I) amended, p. 1223, § 11, effective May 26.

Cindy,
Attached is an example of a general proxy form. We provide it with the notice of meeting, and agenda on a one page letter mailed to all owners. We have found that proxies are often needed to achieve a quorum. A general proxy holder may vote as they chose to represent the owner who assigned the proxy. Note to eliminate the abuse of proxies we suggest limiting the number of proxies which can be assigned to one unit owner(s) and make sure it is the form provided to the owner assigning the proxy by preprinting the owner's information on the form.

Roger,

IMO, unless state law or the gov. docs. limits the number of proxies any one member can obtain, I don't believe it's a good idea to suggest that the board do this. I'm not an attorney, but I wonder if it would even be legal.

Thx Roger!

We do not have this law in AZ, in fact as you may be aware, proxies are prohibited. The law was enacted to stop proxy abuse. Apparently this is a widespread problem.