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Eliminate confusion on proxy forms

August 31, 2003|Stephen Glassman and Donie Vanitzian | Special to The Times

Question: Before our annual meeting, the board of directors sends out proxy forms to all the homeowners. The forms state: "Pursuant to Section 2 of the Association bylaws, complete and mail or deliver this proxy to the Association's secretary." It then lists the secretary's home address.

Recently I was assigned to the association's storeroom cleanup committee and found tons of old signed proxies. I realized that unwitting homeowners had automatically signed their proxy forms and delivered them to the secretary's home. Those signed proxies gave each board, collectively, the majority of votes. From the look of things, the boards have been voting proxies like this for years.

Should I say something about this to anyone? Can I make the board take back all those past proxy votes where they raised our monthly fees?

Answer: Unfortunately, past votes cannot be revisited, even in the circumstances you mention. The procedure used by your board is not new and arguably not illegal, unless the board intentionally meant to mislead owners.

To eliminate confusion, the board should clarify that it is not soliciting the owners' proxies but merely providing a "deposit address" for completed proxy forms. Nothing prevents an owner from writing to other homeowners to ask for their proxies, and there is nothing preventing owners from warning other homeowners not to give or send a signed proxy to the board.

For every solicitation the board circulates, you can circulate a rebuttal. In your flier to homeowners, you can explain that the board may use a proxy to increase monthly assessments, bind homeowners to vendor contracts or enter into a spiral of projects and to-do lists that the homeowners will fund.

Here are four steps to protecting your vote and your proxy: Always name the person to whom the proxy is given, even if that person is a board member; put your voting instructions on the proxy (for example, "Vote for A but not for B, no vote to raise assessments, not to be voted for any other purpose"); never allow your proxy to be used to ratify the board's prior actions; and always remember that a blank proxy is like a blank check because it allows your vote to be used for actions with which you may not agree.

Document board's actions on sessions

Question: Our Compton homeowner association board has successfully devised ways to circumvent the Open Meetings Act. The board uses executive sessions to have its real meetings. Homeowners ask for an agenda of the closed session, but the board doesn't have one. The purpose of its secret sessions varies from "it's none of your business" to "when we get into session we'll decide why we're having it." Then the board orders owners to leave or risk arrest. Can it do this, and can I alert the other homeowners?

Answer: Because the Davis-Stirling Act is devoid of penalties for such actions, there are a lot of things boards cannot do but do anyway. But this places boards and associations at risk of being sued.

Owners should hold the board to the appropriate legal standard found in Civil Code Section 1363.05, but to do so can get costly. A judgment against an association can subject owners to liability, including attorney fees, costs and damages. But not enforcing your rights reinforces the board's acts.

Every executive session must have an agenda and be generally noted in the minutes. The only reasons for holding executive sessions are found in Civil Code Section 1363.05(b): to consider litigation, matters relating to the formation of contracts with third parties, member discipline or personnel matters, or to meet with a member, upon the member's request, regarding the member's payment of assessments, as specified in Section 1367 or 1367.1.

Boards that threaten homeowners with arrest for exerting their rights are overreaching and may be breaching their duty to the association.

If the minutes fail to state that an executive session was held, and the reasons for that session, document the omission in writing to the board. If the minutes state that an executive session was held, and the topic of that session is not listed, document that discrepancy in writing to the board. These letters constitute "notice" to your board that they must follow the law.

Please e-mail your queries to NoExit@mindspring.com.

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