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Minnesota Community Living January/February 2012

Ask the Attorney

By Nigel H. Mendez, Esq., Carlson & Associates, Ltd.

This column will be comprised of questions that have been posed to me by homeowners, property managers or related professionals regarding legal issues that they have encountered regarding their associations. Some of the questions may be compilations from various questions that have been asked about a topic. To have a question answered in a future article, please email it to me at nmendez@carlsonassoc.com with the subject line of "Ask the Attorney.” While I can’t promise that all questions will be answered, I will do my best to include questions that have a broad appeal. Questions will also be answered by other attorneys practicing in this area of law. The answers are intended to give the reader a good understanding of the issue raised by the question, but are not a substitute for acquiring an opinion from your legal counsel.

"I can’t make the annual meeting, but I want to vote via proxy. Can I do this?”
While I don’t get too many questions directly related to proxy voting, when I do get a question it usually comes accompanied with a great misunderstanding of what a proxy vote actually is and how the process is supposed to work. Most associations allow for some use of proxy voting.

The term "proxy” means the authority to represent someone else. If you are unable to attend a meeting, you can appoint a proxy (an individual or a group) to attend in your place. The proxy then attends the meeting and votes your vote, plus their own, if they have a vote in the association.

The proxy can be a fellow homeowner, a family member, a board member, the entire board, or even a random stranger who you want to attend the meeting on your behalf. The proxy does not have to be a member of the association. They simply attend the meeting in your place and vote in the same manner that you would have been able to had you attended the meeting.

If you appoint a proxy, you are not instructing them how to vote. You are simply giving your vote to them to vote as they wish. While it is recommend that you speak with the person you are appointing as your proxy so that they understand how you feel about an issue being voted on, you are unable to require that they vote a certain way. A proxy is not an "absentee ballot.” A proxy is simply the giving of one’s vote to another individual (or group of individuals) to vote as they see fit.

A proxy can be given to a group of individuals (for example, the board of directors) rather than a single individual. In this situation, the group votes on how it will vote your proxy. While this might take a little extra time, it does provide the homeowner with a more representative vote than just assigning the proxy to one individual. If the same group has been given multiple proxies, it can hold just one vote to decide how to vote all the proxies it holds.

Some associations have tried, via a rule, to limit the number of proxies that one individual can hold. Such a restriction must be included in the bylaws or articles of incorporation. Absent a proper restriction, members of the association are allowed to give their proxy to anyone, regardless of whether or not others have also given that person their proxy. You could theoretically have an individual show up at the annual meeting holding 100% of the votes in the association. Likewise, the association cannot require that a proxy voter be a member of the association.

Proxy voting is a great way to ensure that quorum can be met. It is the number of votes present at a meeting, not the number of voters, which determines if the quorum requirement has been met. If you can’t make the next association meeting, appoint a proxy to attend and vote for you.

"Our Board recently took over control of our townhouse association from the developer. We believe there might be a problem with the some of the driveway aprons (they are sinking and cracking). The developer fixed three of them before the turnover, but now states that they are association maintenance issues, and not his responsibility. Is he correct?”

Possible construction defect claims are ones that I always will recommend that an association speak with an attorney about immediately. While a board might not be sure that it has a claim, or that it wants to pursue litigation, Minnesota has very strict time frames for when the developer must be given notice of the potential claim and when a lawsuit must be brought. Failure to comply with these deadlines may be fatal to the claim.

Generally speaking, there are three time periods that are crucial to construction defect claims: Ten years, two years and six months. In Minnesota, new construction comes with a ten year warranty against major defects. However, that is really a protection for the builder in that it limits how long the builder can be held responsible for a project. If no defect is detected within ten years, no claim based on the statutory warranty can be brought. If a defect is discovered, or should have been discovered, by the homeowner or association, a suit must be brought within two years of the discovery. Finally, notice of the defect must be provided to the builder in writing within six months of discovery (unless it can be shown that the builder had actual knowledge of the defect claim).

Failure to follow these statutory guidelines will make it impossible, except in rare circumstances, to succeed with a construction defect claim against a developer. Therefore, it is most important for an association to contact an attorney immediately. Do not be lulled into a false sense of security if the builder appears to be working with you on fixing the problem, or has given you assurances that it will be fixed in the future. Those assurances are usually not enough to allow the association to sue in the future if the work is not completed. If the time limits are missed, there may be no recourse.

CAI-MN has numerous law firms that specialize in community association law. You can find more information about the various law firms on the CAI-MN website, www.cai-mn.com.

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