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Managers Soliciting Proxies: Do’s and Don’ts

Despite the province’s vaillant efforts, proxies continue to cause confusion and to foster distrust. One of the questions we’re often asked is whether it is proper to encourage owners to return their proxies to management? If not, who should the proxy be handed to?

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What is a Proxy?

Condo owners can participate to owners meeting either by showing up in person (always the best option) or by proxy. Similarly, a vote can be cast at the meeting in person, by proxy or by electronic voting (if you have a by-law allowing it).

Basically, the proxy is a document appointing someone to represent an owner at the meeting of owners.

The proxy must be in the prescribed form. This means that you must use the form provided by the province. The proxy must be signed/initialled by the owner (but can be, in our view,  pre-populated as long as no changes are made to it after the owner granting it signs it).

The proxy must be for one or more particular meeting(s). The date of the meeting for which the proxy is to be used must appear on the proxy.  It is acceptable, for the proxy to be used at the meeting and at any adjournment of the meeting.

Finally, the proxy can be given to anyone.  One need not be an owner to be appointed as proxy. But whoever you do appoint must be present at the meeting. It is acceptable to appoint anyone, including a member of the board (if you wish) or the meeting’s chairperson.

But can you appoint the manager as your proxy? More importantly, can the AGM package encourage owners to return proxies to the manager?

Can the manager collect proxies?

You’ve probably heard it before: condo manager cannot solicit proxies. But that’s not true in all circumstances. Indeed, the Condominium Management Service Act (the legislation regulating condominium managers) prohibits managers from soliciting proxies to be used at owners meetings but only if the subject matter of the meeting includes:

  • any matters directly related to the manager; and,
  • the removal or election of one or more directors.  While the removal of directors is (or should be) a rare event, most AGMs include the election of directors. So, in most cases, the manager cannot solicit proxies.

In any other circumstances, managers can solicit proxies.  For instance, if the meeting is to vote on a by-law (on a matter not related to the manager), the manager could solicit proxies.

It is important to note that, if the manager cannot solicit proxies, no one else can solicit proxies “on behalf of” the manager (again, assuming the meeting is related to the manager or includes the removal or election of a director). To me, this may means that no one can seek to appoint the manager as proxy if it deals with matter directly related to the manager or with an election/removal. An owner could chose of his or her own volition to appoint the manager, but it would likely be improper if anyone else sought or encourage owners to appoint the manager (in the circumstances where the manager cannot solicit proxies).

But what does “soliciting a proxy” means? The Condo Management Services Act is not clear until you look at the regulations.

What is “soliciting”?

Article 33 of the General Regulation adopted under the CMSA defines the word “solicit” as meaning:

to petition for, or to try to directly obtain, an instrument appointing a proxy.

However, despite the prohibition against soliciting, managers are entitled to do the following:

  • Collecting or holding the proxy or providing a location where the proxy can be collected or held;
  • Notifying or reminding owners to submit a proxy if they are unable to attend the meeting;
  • Making information available on how to submit the proxy; and,
  • Providing the proxy form.

It is interesting to note that, while the managers can collect and hold proxies, and while they can remind owners to submit a proxy if they cannot attend the meeting, managers cannot “petition or try to directly obtain”. That seems a bit contradictory.

To me, this means that it is safe to send reminders or to include a suggestion in the AGM package or in a notice to (all) owners that absentees should submit a proxy.  Certainly, if asked, the manager can provide information about the proxy and can provide the form to be used. They can also explain how to complete the proxy (as soon as someone figures out how that is done….)

But the manager should likely not go knocking on doors asking for proxies – even if just for the purpose of reaching quorum (again, unless the meeting does not relate to the manager and does not include the election/removal of a board member).

Certainly, it is ok if the AGM package advises owners that they can drop their proxies at the manager’s office or that they can email it to management. Having said that, if one is to be a stickler, such instructions should technically not come from the manager him/herself.

Conclusion

Whether we like it or not, proxies are here to stay and, if used appropriately, they have their raison d’être. There are restrictions on what managers can or can’t do with them. Having said that proxies are not always entirely “out of bound” for managers. The system requires proxies to be collected, held and managed.  Someone has to do this. Managers are probably the best person to do so.

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