What is a proxy vote?
Voting at any General Meeting of a condominium corporation is usually done in person. An owner does so by casting a ballot or raising their hand. But sometimes an owner may not be able to attend a meeting, yet they still want to participate in the voting process. A proxy vote allows an owner to vote in absentia. The owner signs a proxy form and delegates another person to vote on their behalf.
Why use a proxy?
Proxies are often used when members (in this case, owners of a condo) have a financial interest in the organization. Condo owners do have an interest in protecting their investment and in the substantial reserves that are held by the condominium corporation.
Are proxy votes permitted and what are the rules for proxy use?
First, make sure your By-Laws provide for proxy voting, as proxy voting might otherwise be challenged by some owners. Check your By-Laws under — “Meetings of Members of the Corporation”. Here you will find guidelines for the use of proxies; for example, how proxies are counted, whether or not a proxy form must be presented at each meeting, whether or not a proxy form must be signed by the owner, and whether or not a proxy may be revoked.
Types of Proxies
- A proxy can be “general”, whereby the proxy-holder is granted the power to vote as they see fit on any issue. This means the owner who is unable to attend, gives the authority to vote to another person. The proxy-holder will vote according to their own wishes, and not necessarily according to the wishes of the owner who delegated the proxy.
- Another type of proxy is a “limited” proxy. Limited proxies allow the owner to make specific instructions to vote according to their wishes. For example, the proxy form can stipulate that the vote is to be cast in favour of the purchase and installation of new fencing around the property. It can also limit the “power” of the proxy-holder, by stating that the fence installation is the only item on which the proxy-holder can vote on behalf of the absent owner. In fact, proxies can include a number of limitations and/or restrictions to ensure the condo owner’s wishes are represented appropriately in the vote.
You would be wise to consider several proxy formats. But remember fairness should make you realize that “limited” proxies do a better job of representing the owner’s wishes. Limited proxies also limit the “power of a few”.
Who prepares the proxy?
Proxies are usually prepared by the Board and sent out by the Secretary with the agenda and other documents related to the meeting. Proxies are used whenever the Corporation has an item of business to vote on which includes, but is not limited to, elections, removing directors, changing By-Laws and spending any amount deemed significant.
What information should be included?
At a minimum, the proxy should include the proper (legal) name of the Condominium Corporation (ie. YCCC No. 97), the word PROXY under it, and a statement that ____________ is the person’s proxy for the meeting, and then a place for the member to sign and date the proxy. If the proxy is a limited proxy it would also include any issues that are to be voted on at the meeting and a place for the member to check “yes” or “no” or a place to vote for any candidates being considered for the Board of Directors. A proxy should also include an expiry date.
What are the pros and cons of proxy voting?
Remember, condominium corporations have meetings so they can discuss and debate important issues and arrive at reasonable agreement through voting. Through good discussion and information dissemination, owners will be better informed and engaged.
So, proxy votes do serve a purpose. In order to proceed with a meeting of a condominium corporation in New Brunswick, a quorum is required. According to the New Brunswick Condominium Property Act, a minimum of 30% is needed. If a condo corporation’s By-Laws has a higher requirement, then that higher requirement must be met. So, proxy votes can make a difference in whether or not the meeting can proceed.
For certain issues, higher percentages are required. Voting on substantial modifications of the Common Elements and Assets of the condominium corporation require a minimum of 60%. Many condo corporations have limits that are as high as 85%. To confirm the minimum requirements for your condo, check your Declaration, under “Modifications of Common Element and Assets”.
On the other hand, “general” proxy votes can put a lot of power in the hands of a few condo owners. The downside of this is an overrepresentation of the views of a few condo owners. In some instances, this could be seen as a form of abuse. Proxy-holders may discourage owners from attending the meeting and hearing all sides of the issue. Proxy-holders accept proxies from other owners and vote according to their own wishes. This may not be the best way to arrive at important decisions for a condo corporation.
What are the concerns with using proxies?
The use of proxy voting can cause 3 concerns:
- Owners who don’t attend the meeting do not hear the discussion and may have marked their proxy based on misinformation, outdated information or no information at all.
- If Condominium Corporations instruct Owners to submit proxies to a Board Member, that one person can collect many proxies. And if they are general proxies, that Board Member can influence the outcome of the vote. Members are basically giving their rights away to another to decide for them.
- The use of a Perpetual Proxy (Proxy in Perpetuity) defeats the purpose of informing Owners on the details of important issues and voting accordingly. Although it may not be illegal, in my opinion, Perpetual Proxies are a form of abuse of power and have no useful purpose in a Condominium Corporation.
- Proxy voting has a useful purpose to ensure that meetings proceed at the planned date & time. Important decisions will move forward and the condo owners will benefit from the decisions made by all of the owners.
- The use of “general” proxies probably has no value in representing the views of all owners. Instead use a “limited” proxy, that ensures the actual views of the owner is represented. Templates of several proxies can be updated and used at all General Meetings.
- Encourage owners to attend meetings. Through the presentation of all the information, active discussion and clarification of questions, condo corporations will benefit in making decisions that best fit the needs and wants of the condo owners.
Need more information on how to effectively use proxies? Need help in designing useful proxy templates? Condo-Link Services can help. We provide information sessions, help with proxy template designs, and a review of your Declaration and By-Laws to ensure you are confident of your condo’s voting requirements and proxy regulations. Call 506-455-9207 or email email@example.com
References and Definitions
The New Brunswick Condominium Property Act – CHAPTER C-16.05
26(1) The owners of 30% of the common elements constitute a quorum for an owners’ meeting.
26(2) No business shall be transacted at an owners’ meeting unless a quorum is present at the beginning of business.
Amendments to By-Laws:
32(3) A corporation my make, amend, or repeal by-laws by a vote of the owners of at least 60% of the common elements, or a greater percentage if specified in the Declaration.
(This means that at least 60% (or more if your Declaration requires it), must attend the meeting in person or by proxy. At least 60% must be available to vote. The decision is then determined by majority vote.)
Voting according to the percentage of ownership of the unit as indicated in the Schedule of the Declaration entitled Common Expenses & Common Interests. This means that a unit that pays higher condo fees also has higher-weighted votes.