“A less-publicized impact of SB 323 is its authorization of voting by non-member designated agents, including via powers of atorney and entity appointments.”
If the answers to the above three questions are affirmative, the association should next consider whether the power of attorney contains any limitations as to (1) the authority granted, and/or (2) the time during which the authority is effective.
Often, a principal will execute a form power of attorney, in which he or she may simply check boxes and/or fill in blanks. In this instance, the association or its representa- tive should look for language indicating either that general authority is given to the attorney-in-fact, or at a minimum, authority to make real property transactions.1
Casting a
member vote in a common interest development election would most properly fall within the category of a real es- tate transaction under Probate Code section 4451(d), which provides that authority over such transactions includes the power to “do any act of management … with respect to an interest in real property, or a right incident to real property, owned … by the principal ….”
Finally, the association should ensure that the power of at- torney grants current authority—i.e., that its validity is not contingent upon some future event, or that it has not ex- pired by its own terms, or due to the incapacity or death of the principal.
1 Te new law specifically references a “general power of
attorney,” which, under Probate Code section 4261, means a power of attorney which grants general authority to the attorney-in-fact as opposed to one that expressly limits the attorney-in-fact’s authority to one or more actions, subjects or purposes.
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Voting by Legal Entity Appointees
In addition to the new provisions regarding powers of attor- ney, SB 323 also amended Section 5105(b)(2) with the fol- lowing language: “If title to a separate interest parcel is held by a legal entity that is not a natural person, the governing authority of that legal entity shall have the power to appoint a natural person to be a member for purposes of this article.”
For purposes of this statute, a legal entity may be a corpora- tion, a limited liability company (LLC), a partnership, or possibly a trust. All of these entities are capable of owning real property, but are not “natural persons” who can be eas- ily identified for purposes of casting a vote.
Nonetheless, the evaluation of whether a designated person may cast a vote on behalf of a legal entity under this sec- tion is slightly simpler than the analysis above regarding a power of attorney. For example, the bylaws of most corpo- rations will set forth which officer(s) and/or director(s) of the corporation may sign contracts and otherwise bind the corporation. If the bylaws are not specific, or if they are not available to the association for review, the authorized person may be designated by board resolution, or may be someone with “apparent authority.” (See Corp. Code, § 208(b).)
In the case of an LLC, its operating agreement will typically identify its manager or managers as the individuals autho- rized to act on its behalf, pursuant to Corporations Code section 17701.05. If the operating agreement is unclear, an association may rely on a designation signed by two of the LLC’s officers, two of its managers, or by a manager or
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