News of the new Condo Act rules just came out yesterday. In this Toronto Star article, Mario Deo, a well respected lawyer in the Ontario condo market had this to say...
“The way of eliminating proxy fraud is by eliminating proxies,” said Deo. “No matter how many rules you pass, proxy fraud is something you can’t eliminate.”
Well, ya can't get rid of proxies.
I understand Mr. Deo's frustrations, it's one shared by many in the condo industry. But the real problem is that paper proxies are easy to defraud.
I'm not just saying this because I run an electronic proxy voting service for condos. I'm saying this because there really aren't any better options if proxies are eliminated entirely. Owners would be forced to attend their Annual General Meetings in person if they want to vote. But...
Owners don't want to go to their AGMs.
Under the Condo Act, a meeting must be attended by at least 25% of owners in order for it to be valid. It is a known problem in the industry that condos struggle to reach "quorum" at their AGMs. Let that sink in - a 200 unit condo regularly struggles to get 50 owners to show up to a meeting.
But why? The average selling price of a Condo in Toronto is about $500K nowadays. Shouldn't owners be more concerned with their investments?
Why the apathy?
Here's what we often hear from owners that don't attend their meetings:
"It's not at a good time."
"Meetings are boring."
"I'm not in the country."
"I'm busy (or) I have better things to do."
So apathy in this case is an owner weighing their choices about their investment and actively choosing not to participate in their condo's governance. Something needs to exist to allow owners to be easily represented at their AGM without needing to be there in person. That's what a proxy is for - and electronic proxies just make things so much better.
Electronic proxies eliminate the core problems that contribute to fraud in paper proxies.
They reliably identify the voter by requiring authentication before submission.
Records of the proxies are retained digitally.
They can be audited at any time.
Electronic Proxies Increase Owner Representation.
Our data shows that condos can double their owner representation by proxy when electronic proxies become available. In one case we tripled the owner representation for a client. Increased engagement serves to further reduce proxy fraud as condos can more confidently reject suspicious paper proxies.
And owners want it.
In this day and age, people demand convenience - technology has seen to that. Synchronous events are viewed as being too restrictive. If the Condo Industry wants to eliminate proxy fraud and increase owner engagement, they should be looking at ways to easily allow owners to be involved on their own time. We need to put ourselves in the shoes of the typical owner and ask, "How can we make it easier"?
Do you want to use electronic proxies for your next Annual General Meeting?
Click here to tell us about your condo and we'll be in touch.