I signed an unusual proxy at the closing for my co-op. What can I do now?
Herrick partner, Bruce Cholst, was featured in the Brick Underground - Ask an Expert column where he responded to a question presented by a reader concerning an "unusual" proxy they had signed at the closing of their co-op.
The reader noted that at the closing of their co-op, they signed "a mandatory proxy naming the long-standing board president." Even though they had signed the proxy, the reader now feels that "it seems wrong," and they now want to know their options. Bruce explained, "If the buyer feels coerced into issuing the proxy for election purposes without being informed about the candidates and if the board refuse to close without it, the proxy would be subject to challenge."
The article highlighted that common practices in co-ops and condos involving proxies permit voting by proxy which enables "owners and shareholders to appoint another building resident to vote on their behalf in quorums and elections." Additionally, it is legal for boards to send out forms appointing themselves as proxies. "It's not only legal, it's standard practice," Bruce added.
The article clarified that it is equally important that proxies are not tampered with or fraudulently signed. One context where you may be asked to sign a proxy at closing is when the co-op is being purchased by a trust. "If the owner of record is not likely to be on the premises because another person is occupying the apartment, the board may want to get a proxy for quorum purposes only," Bruce said.