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Condo | HOA Lawyers

Directed Proxies vs. Absentee Ballots: What is the Difference and Can Our Association Use Them?

I have written before on the subject of associations’ continuing struggle to convince enough unit owners to attend owner meetings in order to meet quorum requirements, and otherwise to simply get business done. Recognizing that not every condominium association may be ready to take the step to convert to “E-voting,” another way to ease the burden of low-owner attendance at meetings is the proper use of directed proxies or absentee ballots. While similar in concept, the two are legally distinct and it is important for associations to understand the differences to determine which process they can use.

Directed Proxy

Most condominium owners are probably familiar with the proxy – it is that piece of paper delivered with your annual meeting packet that the association asks that you sign if you are unable to attend the meeting in person. A proxy allows an owner to assign his or her right to vote at the owners’ meeting to someone else – the “proxy” – who attends the meeting in the owner’s place and casts the owner’s vote. Proxy voting is generally allowed under both the Non-Stock Corporation Statutes (specifically, Wis. Stat. sec. 181.0724) and under the Wisconsin Condominium Act (Wis. Stat. sec. 703.15) – as long as the association’s Articles of Incorporation or Bylaws do not prohibit it.

A “directed proxy” adds the dimension of directing the proxy-holder how to cast your vote (unlike a regular proxy, which allows the proxy-holder to choose how to cast your vote). Therefore, the directed proxy will have the general proxy language (i.e., “I give my proxy to John Doe to cast my vote at the meeting.”), and it will also list each item up for vote and allow the owner giving the proxy to “direct” the proxy-holder how to vote on each item. In essence, it allows the owner to exercise control over how his/her vote is cast, without actually attending the meeting. There are no statutes within the Non-Stock Corporation act or the Condominium Act that address directed proxies. Therefore, unless your association’s Bylaws or Articles of Incorporation specifically prohibit their use, your association should be able to use directed proxies. The use of directed proxies may help boost attendance-by-proxy at owners’ meetings, if owners understand that the directed proxy allows them to truly control their vote even in their absence.

Absentee Ballot

Like a directed proxy, an absentee ballot will allow a unit owner to cast a vote without attending a meeting. The difference between the two boils down to one word: meeting. If absentee ballots are used by an association, the ballots are collected in lieu of a meeting actually being held. Owners cast their absentee ballot, and as long as (1) enough ballots are collected to meet the quorum requirements established in the association’s Bylaws, and (2) enough ballots approving the action are received that would be required to approve the matter at an owners’ meeting, the owners can act without a meeting. (See, Wis. Stat. sec. 181.0708). The catch is – and this is a big catch – unlike directed proxies, your association’s Bylaws must specifically state that actions by written ballot are allowed in order for your association to use them. If your association wants to amend its Bylaws to adopt the written ballot procedure, consult with your association’s attorney, as the language should mirror Wis. Stat. sec. 181.0708. Further, your attorney should make sure that there is no conflicting language in your condominium documents that could negate the enforceability of the action by written ballot procedure.

Absentee ballots, when properly used, could certainly help associations who have problems with attendance at owners’ meetings – we know everyone is busy, and filling out a ballot and sending it in takes much less time than going to a meeting.

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