By: David A. Closson, Esq.
Annual homeowner meeting season for many associations is right around the corner. As the time for those meetings approaches, questions commonly arise regarding the use of ballots, proxies, and voting by mail. Such questions are understandable given the somewhat technical nature of the laws governing the use of ballots and proxies in Colorado. This article discusses considerations and requirements for the use of ballots, proxies, and mail voting under the Colorado Common Interest Ownership Act (“CCIOA”) and the Colorado Revised Nonprofit Corporation Act (“CRNCA”).
In general, associations have two options in terms of homeowners taking action. The most common option includes holding a physical meeting. Homeowners can attend the meeting to hear and participate in discussions on association matters and vote on the relevant issues. Homeowners who are unable to attend the meeting can appoint a proxy to vote on their behalf at the meeting.
What is a Proxy?
A proxy is permission granted by one person to allow another to exercise voting privileges on behalf of the person giving the proxy. Technically, “proxy” means: an individual who is the recipient of authority to act or speak for another. In practice however, “proxy” is commonly used to refer to both the person appointed and the actual document appointing such person.
Use of Proxies for Homeowner Meetings
CCIOA provides that homeowners must be allowed to appoint a proxy to exercise their voting rights. A proxy is not valid if the proxy is obtained through fraud or misrepresentation. A proxy must be dated and terminates eleven months after its date unless a different timeframe is provided. Pursuant to the CRNCA, a proxy may be revoked by:
The association is entitled to reject a proxy appointment if the association’s secretary, acting in good faith, has reasonable basis for doubt about the validity of the signature on the proxy. Any action of the association based upon the acceptance or rejection of a proxy appointment or proxy revocation is valid unless and until a court determines otherwise.
Unless otherwise provided in the declaration, bylaws, or rules of the association, proxies may be appointed pursuant to the requirements of CRNCA, which allows for great latitude in the appointment of proxies and provides that an individual may appoint a proxy by:
o Signing an appointment form; or
o Transmitting or authorizing the transmission of a telegram, teletype, or other electronic transmission providing a written statement of the appointment which shall include or be transmitted with written evidence from which it can be determined that the individual transmitted or authorized the transmission of the appointment. This is most commonly done in the form of an email appointment.
What is a Ballot?
A ballot is the record of a homeowner’s vote. It is typically the physical piece of paper completed by owners indicating their vote on the action items to be considered at the meeting, such as the election of directors or proposed amendment to the association’s governing documents. If voting is taking place at a meeting, the ballot will be cast by the homeowner or by the homeowner’s proxy if the homeowner is unable to attend the meeting and they have appointed a proxy. It is also important to understand that the proxy itself is NOT a ballot, but permission for the proxy holder to cast the ballot on someone else’s behalf.
Secret ballots are ballots that do not contain identifying information, such as the name or unit number of the individual casting the ballot. At all homeowner meetings, the association should be prepared to use secret ballots to vote on any action item because CCIOA requires the use of secret ballots in the following circumstances:
o When the association’s bylaws require the use of secret ballots;
o When voting in contested board elections (i.e., there are more candidates than positions);
o At the discretion of the board; or
o Upon the request of 20% of the homeowners present at the meeting.
Counting of Ballots
Finally, CCIOA provides that ballots are to be counted by a neutral third party or by a committee of volunteers. Such volunteers shall be homeowners who are selected or appointed at an open meeting by the person chairing the meeting. The volunteers cannot be board members or candidates for the board.
Action by Mail Ballot
An alternative to holding a physical meeting of the homeowners is to conduct a homeowner vote on a proposed action by using a mail ballot. In such instance, no meeting is held but instead information regarding the proposed action and ballots are mailed to all homeowners who (hopefully) complete and return their ballots to the association within a prescribed deadline.
The CRNCA provides that unless otherwise provided in the association’s bylaws, any action that can be taken at a homeowner meeting may be taken without a meeting through the use of a written ballot. Written ballots can be useful in allowing homeowners to vote on items such as proposed amendments to the association’s governing documents which require significant membership participation in the vote. For example, an amendment to an association’s declaration of covenants may require the approval of 67% of all homeowners. It is uncommon for 67% of all homeowners to attend a meeting and in such circumstances a mail ballot may increase participation in the vote.
The CRNCA requires that mail ballots and solicitations concerning mail ballots:
o State each proposed action;
o Provide an opportunity to vote for or against each proposed action;
o Indicate the number of responses needed to meet the quorum requirements;
o State the percentage of approval necessary to approve each matter (other than the election of directors);
o State the time by which a ballot must be returned; and
o Be accompanied by written information sufficient to permit each person casting a ballot to reach an informed decision on the matter.
Approval of an action by written ballot is valid when the number of votes cast by ballot equals or exceeds the association’s quorum requirements and the number of approvals equals or exceeds the number of votes that would have been required to approve the action at a meeting of the members.
If you have questions or would like to further discuss the use of ballots, proxies, and mail voting, please contact a Altitude Community Law attorney at 303.432.9999.