Conflict of Interest?

[dhs]

I live in North Carolina. We elect the board of our HOA in February. In January the management company sends out a notice which includes the following:



Even if you are planning on attending this meeting, we ask that you complete the enclosed proxy and return it to us, so that if a last minute change prevents you from attending the meeting, we can still obtain the quorum requirements to conduct business. If you have sent your proxy in and do attend the meeting, the proxy will be returned to you at the time you sign in. The proxy enables a Board of Directors member or another homeowner of your choice to vote in your absence.



I see several problems with this.



First, the Board should not be allowed to solicit blank ballots from homeowners! The Board should not be allowed to use this process to vote themselves into office. From what I can learn, this meets the definition of a conflict of interest. Even if it dosen’t meet the letter of the law, it violates the spirit of the law, it has the appearance of a conflict of interest.



Second, the management company, who we hire for their expertise in HOA management and legal matters, should never have permitted that language to be used in the annual meeting notice. It sure looks like this too is a conflict of interest. After all, it is the Board who hires and pays the management company. Again, even if it dosen’t meet the letter of the law, it violates the spirit of the law, it has the appearance of a conflict of interest.



What do you think? Thank you.

 

[PayrollHRGuy]

Proxies are very common. If not enough people show up for the meeting as is often the case no business can be conducted.

What law do you think this "violates the spirit of..."?

 

[quincy]

I live in North Carolina. We elect the board of our HOA in February. In January the management company sends out a notice which includes the following:



Even if you are planning on attending this meeting, we ask that you complete the enclosed proxy and return it to us, so that if a last minute change prevents you from attending the meeting, we can still obtain the quorum requirements to conduct business. If you have sent your proxy in and do attend the meeting, the proxy will be returned to you at the time you sign in. The proxy enables a Board of Directors member or another homeowner of your choice to vote in your absence.



I see several problems with this.



First, the Board should not be allowed to solicit blank ballots from homeowners! The Board should not be allowed to use this process to vote themselves into office. From what I can learn, this meets the definition of a conflict of interest. Even if it dosen’t meet the letter of the law, it violates the spirit of the law, it has the appearance of a conflict of interest.



Second, the management company, who we hire for their expertise in HOA management and legal matters, should never have permitted that language to be used in the annual meeting notice. It sure looks like this too is a conflict of interest. After all, it is the Board who hires and pays the management company. Again, even if it dosen’t meet the letter of the law, it violates the spirit of the law, it has the appearance of a conflict of interest.



What do you think? Thank you.

I am not seeing the problem you are seeing. Blank ballots are not being solicited and there is no conflict of interest shown in the language of the notice.

 

[adjusterjack]

I see several problems with this.

Then don't send in your proxy. That's your choice.

 

[Zigner]

Lastly, there is no requirement that you do as they are requesting.

 

[quincy]

Depending on the rate of spread of Covid-19 in North Carolina and the availability of a vaccine, you might find that the HOA Board meeting set for February will be held remotely and the ONLY way you will have to elect Board members will be by mailing in ballots.

 

[Zigner]

Then don't send in your proxy. That's your choice.

Yeah, that.

 

[zddoodah]

I see several problems with this.

First, the Board should not be allowed to solicit blank ballots from homeowners! The Board should not be allowed to use this process to vote themselves into office.

These aren't problems; they're opinions.

From what I can learn, this meets the definition of a conflict of interest. Even if it dosen’t meet the letter of the law, it violates the spirit of the law, it has the appearance of a conflict of interest.

Which law are you referring to?

Second, the management company, who we hire for their expertise in HOA management and legal matters, should never have permitted that language to be used in the annual meeting notice.

Again, this is an opinion, not a problem. Also, did "we" really hire a property management company for expertise in legal matters?

What do you think?

I think if folks don't like what you've described, they shouldn't fill out the proxies.

Beyond that, what you've described is routine for publicly-traded corporations, so I don't see why it would be a problem for an HOA. You are, of course, free to lobby your fellow homeowners to do whatever you'd like them to do.