Michigan condominium associations are often a hotbed for politicking prior to an election of directors or other votes that take place at an annual or special meeting. It is common for board candidates, or other co-owners, to go door to door and solicit the right to vote on behalf of their fellow co-owners prior to an association meeting. In many cases, co-owners will be asked to complete a designated voter representative form (DVR) or a proxy so that a fellow co-owner can vote for them if they are unable to attend a meeting. However, many co-owners do not understand the difference between a DVR and a proxy. The failure to understand the difference between a DVR and a proxy often leads many co-owners to unknowingly give away important rights.
In Michigan, a DVR form is a creation of the condominium bylaws. There is nothing in the Michigan Condominium Act or the Michigan Nonprofit Corporation Act that requires a co-owner(s) to designate a voting representative. However, if the condominium bylaws require that a co-owner(s) designate a voter representative, the co-owner(s) must complete a DVR form and provide it to the condominium association upon acquisition of a unit. The failure to complete a DVR form may subject the co-owner(s) to a bylaw infraction. In cases where a unit is owned by a single person, the co-owner will often designate them self as the voting representative. However, if the co-owner lives out of town, it is not uncommon for the co-owner to designate somebody that is local as designated voter representative. The DVR form was primarily created to handle situations where a unit was owned by more than one person or by a corporate entity. In cases where there are multiple owners of a unit, or a unit is owned by a corporate entity, the DVR form puts the condominium association on notice of the one (1) person that will be allowed to vote at meetings of the association and identifies who will receive all notices from the association. By way of example, if a husband and wife both own a unit, and both show up to the annual meeting, only the person designated as the DVR will be allowed to vote at the association meeting, as each unit will only be entitled to one (1) vote.
The condominium bylaws will identity the information that is required to be contained in a DVR form, which is typically the unit number, the name and address of the co-owner(s) of the unit and the name and address of the designated voting representative. Often times the condominium association or property manager will have a form that meets the requirements of the condominium bylaws than can easily be filled out and returned. While a co-owner could use this form to identify someone they would want to vote on their behalf, the use of a DVR form can be dangerous. Specifically, once a DVR form is executed, that co-owner will no longer receive notice of any future meetings of the association, notice of any bylaw infractions, notice of any annual, additional or special assessments and they will not have the right to vote at any future meetings of the association. While a co-owner could always change their DVR, many co-owners do not understand the potential consequences of providing a DVR to their neighbor. By way of example, if a co-owner provided their neighbor with a DVR and the association imposes a special assessment, the co-owner will still be responsible for payment of the assessment even though they will not receive notice of the same. If the holder of the DVR forgets to pass along the notice to the co-owner, the co-owner’s unit could be liened, the unit could be foreclosed upon and/or the co-owner may be forced to pay late fees and/or attorney’s fees and costs if the special assessment is not paid in a timely manner.
In contrast, a proxy is a creation of the Michigan Nonprofit Corporation Act. Specifically, MCL 450.2421 indicates that a person may provide a proxy to vote at a condominium association meeting unless otherwise prohibited by the articles of incorporation or bylaws. The holder of the DVR, which is often one of the co-owners, can provide a proxy to vote at a meeting of the association. Pursuant to MCL 450.2421(2), a proxy is valid three (3) years from the date of its execution unless otherwise provided in the proxy. Accordingly, most proxies are limited to voting at a specific meeting that the holder of the co-owner or DVR cannot attend. Similar to a DVR form, a proxy can be revoked at any time and many associations have blank proxy forms that can be utilized upon request. MCL 450.2421 requires that a proxy be in writing and be signed in order to be valid. The proxy should also contain sufficient information to identify who is providing the proxy and who is the holder of the proxy. The holder of the proxy only receives the right to vote at a meeting. Unlike a DVR, the holder of a proxy does not have the right to receive meeting notices, bylaw infractions, notices of assessments, etc. Accordingly, if a co-owner cannot attend a meeting, it is recommended that they provide a proxy that is limited in scope to voting at a specific meeting, rather than executing a DVR form in order to avoid giving away additional rights.
Kevin Hirzel is a partner at Cummings, McClorey, Davis & Acho, P.L.C. He frequently represents Builders, Community Associations, Condominium Associations, Cooperatives, Co-Owners, Developers, Homeowner Associations, Investors, Property Owners and Property Managers throughout the State of Michigan. Mr. Hirzel can be contacted at (734) 261-2400 or firstname.lastname@example.org.