Election of board jeopardized by proxy confusion

Posted3/23/2013 4:53 AM

Q. The board of managers of our condominium issued a proxy to all owners in the association, along with the notice of the annual meeting. The proxy distributed by the association identified all four of the known candidates for the three open seats on the board. The proxy also provided an opportunity for owners to designate for which of the candidates the proxy holder should vote.

An owner in the association prepared their own proxy that mirrored the association's proxy in all respects, except one. The owner's proxy included only three of the four known candidates; listing only the candidates that the owner wanted to see elected. This owner then mailed his proxy form to all owners with the association's notice of meeting, and requested owners to return the signed proxies to him.

The board of managers learned of this before the annual meeting from owners who are confused by the two nearly identical looking proxy forms. What are the association's options here?

A. Initially, there is no requirement that a proxy distributed by an owner include all of the known candidates. However, there is a significant issue created here.

It can be argued that the proxy distributed by the owner that is identical to the proxy distributed by the association, except that it includes only three of the four known candidates shown on the association distributed proxy, creates confusion among the owners as to its source and/or whether it is the official proxy of the association. This is exacerbated by the owner's distribution of his proxy with a copy of the association's notice of the annual meeting.

Absent a very careful reading of the documents distributed by the association and this owner, owners could be (and apparently are) confused or misinformed as to the actual candidates for the annual meeting.

Here are some of the board's options if the meeting is to proceed. Board members and others can solicit later dated proxies showing all four of the known candidates. Or, the board can bar use of the owner's proxies. Or, the board can raise an objection to the owner's proxies at the annual meeting, but let them be voted and reserve the right to challenge them post election (and depending on the outcome).

Another option would be to cancel the annual meeting and issue a new notice of meeting and new proxy, following a very frank discussion with the owner distributing the look alike proxies. The association may also want to include some language in its proxy that it is being distributed by the association.

Q. An owner in our association was evicted by the association for nonpayment of assessments. The association leased the unit to a third party, without doing any sort of background check on the tenant. This tenant became a problem, and moved out after only a few months. The association then inspected the unit and realized its tenant had caused substantial damage to the appliances and decorating in the unit. Who is responsible for this damage?

A. The tenant is responsible for the damage. The association could apply the security deposit, if any, to the damage. Also, I suggest that tenants of an association be required to procure liability insurance naming the association as an additional insured, and provide proof of such insurance before taking possession of the unit. If this was done, the association can make a claim under the tenant's insurance.

If the association has neither a security deposit to cover the damage, nor the insurance described above, the association does have exposure to liability for the damage caused by its tenant. The association's liability insurance may be triggered as a result.

Let me note that the association would not necessarily have that exposure in a situation where it takes possession of the unit from the owner with the owner's tenant already in place.

Q. The declaration for our condominium provides that windows in perimeter walls of units are limited common elements. The declaration goes on to provide that the board is responsible for the maintenance, repair and replacement of the limited common elements, and that the cost is to be charged back to the owner of the unit served by the window. Skylights are located in the roof over many of the units; however, the declaration does not refer to the skylights. Who is responsible for the skylights?

A. A skylight is a window in the roof or ceiling of a unit. As such, the language in the declaration concerning maintenance, repair, and replacement of windows, and the responsibility for the cost, would apply to the skylights.

• David M. Bendoff is an attorney with Kovitz Shifrin Nesbit in Buffalo Grove. Send questions for the column to him at CondoTalk@ksnlaw.com. The firm provides legal service to condominium, townhouse, homeowner associations and housing cooperatives. This column is not a substitute for consultation with legal counsel.

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