Annual Election 101: Ensuring a Quorum and Gathering Proxies

First of all: No quorum, no meeting. It's that simple. "A quorum is usually set forth in the bylaws of the co-op or condominium," observes attorney David L. Berkey, a partner in Gallet Dreyer & Berkey. "In a co-op it will tell you what percentage of shares are required to be present, and in a condominium it tells you what percentage of common interest must be represented by people present in the meeting. Generally, it's 50 percent."

To reach a quorum, condo and co-op boards will need to alert residents to the meeting in plenty of time. Once you determine a date for your annual meeting, you have to give notice no more than 60 days and no fewer than 10 days beforehand. You should follow up generally 30 to 40 days out with a formal notice, which must state the place, date, and hour of the meeting. The notice may be written or electronic; your attorney can advise you on the particulars.

Machine Politics

A few forward-thinking boards are increasing voter participation by staging digital elections.

"One of the co-ops I represent has a computerized online election process," says attorney James Glatthaar, a partner at Bleakley Platt & Schmidt. "People can vote a week before a meeting and up to 11 the following morning. Each person gets a unique password. You get unlimited times checking the site, but only one time casting a ballot. This gives people a whole bunch of days to cast their votes, and they can do it from their living room without even attending. As part of this, every few days before the meeting — seven days, three days, one day before — an automatic e-mail goes out to everybody, reminding them about the meeting and to vote."

A Proxy Upon Your House

Quorums can be — and often are — achieved through the collection of proxies. Most co-op and condo boards send a proxy form with the official notice of meeting. A proxy is a document authorizing a specified person to vote in the shareholder or unit-owner's stead. Since the votes will be present, that counts toward fulfilling the quorum.

According to veteran real-estate attorney Stuart Saft, a partner at Holland & Knight, the critical basics are:

(1) a proxy doesn't have to be the official form — a voter can sign any paper, even one that he or she then faxes;

(2) the proxy-holder need not be a shareholder or unit-owner;

(3) the voter can cross out the designated candidates and vote for a write-in; and

(4) the proxy becomes invalid if anyone alters it after it's signed, or if it's signed but doesn't name a proxy-holder.

One major concern of voters is what if they sign a proxy and then decide to attend the meeting. Can they still vote? Yes: a shareholder or unit-owner's ballot at a meeting supersedes any proxy he or she has given. And in the case of multiple proxies — where, say, a proxy was turned in a second time after having changed his mind on a candidate or a referendum position — the most recently dated proxy has priority over any earlier one.

Finally, there are two kinds of proxies. A directed proxy contains names of candidates the voter prefers. The other is a non-directed proxy, which allows the voter or proxy-holder to fill in names at his or her discretion.

It's usually the management company that keeps tabs on whether a quorum has been reached. And if that still hasn't happened via proxies by the two to three weeks leading up to the meeting, boards should start knocking on doors.

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