Owner vs Voting Member as a Board Member

Started by ReneeD • 13 replies • 2228 views

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ReneeD (Illinois)
Posts: 201

Posted:

We are an IL HOA. Our Decs state that one individual shall be designated as the “Voting Member” for each Unit Ownership. Our Decs also state that the Board shall consist of 5 members, each of whom shall be an owner OR voting member. In the past the board has sought legal counsel yet the board is reminded that it is their opinion; that the ultimate decision is still left up to the board to interpret what is best in the interests of the association.

Scenario: Husband and wife; she is owner of record and retains her maiden name. Husband interested in filling a vacancy; wife submits letter establishing she is married to him, that he resides at same address as she; for all intents and purposes, designates husband as voting member for that unit. Also, I would assume that as a married couple, each has a vested interest in that unit.

Our docs are clear to being an owner or having the ability to designate someone as a voting member. This unit owner has done that. Our docs also go on to say that if no designation is given, the Board at its election may recognize an individual of the dwelling unit as a voting member.

Per legal's opinion, the board has been instructed to inform the wife that a quit claim is in order for her husband to remain on the board. I am under the impression if our docs were silent on any matter any subsequent changes take effect, such as the recent CICA Act that became effective January 2012, would prevail. BTW, Illinois is recognized and under common law jurisdiction. How does or can the CICA Act disregard one's marital status on owned property? -Renee

EllieD (Vermont)
Posts: 446

Posted:

ReneeD,

How do your Documents define “Member” of the Association? Would you be willing to post the exact wording?

Typically the “voting member” is one of “multiple owners” of a Unit.

Would you post the exact words from your Documents re designating a “voting member”. From what you posted the Husband does not appear to be an owner - so there are not “multiple owners” of the Unit.

You write you are a HOA, and then use the term “Unit” – so just to clarify – are you a Condominium or not?

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Renee

My reading would be that the owner has designated someone (could be me) as the voting member and voting members can be members of your BOD so the hubby can vote and be a member of your BOD. He is the designated voting member as designated by the owner regardless of their relationship.

ReneeD (Illinois)
Posts: 201

Posted:

How do your Documents define “Member” of the Association? Would you be willing to post the exact wording? None exists.
Typically the “voting member” is one of “multiple owners” of a Unit. Correct.

Would you post the exact words from your Documents re designating a “voting member”. From what you posted the Husband does not appear to be an owner - so there are not “multiple owners” of the Unit.

VOTING MEMBERS: Subject to the provisions of Section 10.05, voting rights of the members of the Association shall be vested exclusively in the Voting Members. One individual shall be designated as the “Voting Member” for each Unit Ownership. The Voting Member or his proxy shall be the individual who shall be entitled to vote at meetings of the Owners. If the Record ownership of a Dwelling Unit shall be in more than one person, or if an Owner is a trustee, corporation, partnership or other legal entity, then the Voting Member for the Dwelling Unit shall be designated by such Owner or Owners in writing to the Board and if in the case of multiple individual Owners no designation is given, then the Board at its election may recognize an individual Owner of the Dwelling Unit as the Voting Member for such Dwelling.

You write you are a HOA, and then use the term “Unit” – so just to clarify – are you a Condominium or not? No, we are a fee-simple, townhome community.

TimB4 (Tennessee)
Posts: 21,062

Posted:

Quote:

Posted By ReneeD on 05/10/2012 8:10 AM

Per legal's opinion, the board has been instructed to inform the wife that a quit claim is in order for her husband to remain on the board. I am under the impression if our docs were silent on any matter any subsequent changes take effect, such as the recent CICA Act that became effective January 2012, would prevail. BTW, Illinois is recognized and under common law jurisdiction. How does or can the CICA Act disregard one's marital status on owned property? -Renee

Renee,

You've paid for and gotten a legal opinion on the qualification issues. I suspect that the attorney had access to the governing documents, knew and/or researched IL law and may have even pulled a copy of the deed in question.

You cited a section of your documents (voting member) that refers to another section of your documents not provided. Therefore, we do not know what the provisions of 10.5 is. However, I suspect the attorney who offered their opinion did.

I am not an attorney and I do not work in the legal profession. I do not have access to your governing documents and did not research all the potential applicable IL laws. In my layman's opinion, based on what you provided, I concur with the attorney's opinion.

Since there is only one vote per lot, when there are more than one owner of the property, the Board needs to know who to give the ballot to or is authorized to designate a proxy for that ballot. For this purpose, a "voting member" is identified by the property owners. This designated individual is a owner of the property and chosen by all owners of the property. Anyone who is not an owner of the property given voting authority would be considered a "designated proxy" for the owner/s and not a "voting member".

Members are typically defined in the Articles of incorporation and/or the CC&Rs. Did you check all of your governing documents (CC&Rs, Articles of Incorporation, Bylaws, resolutions) to determine if "member" was defined? Perhaps it's just stated somewhere that all owners are members and the term "owner" is defined to determine who a member is.

Typically, members are considered to be those individuals (or entities)shown on the deed of record. Expecting this to be the case, community property law would not be applicable as the Association is not deciding who the owner of the property is - just who is the member of the Association. Again, Associations typically define membership as those who are recorded on the deed and filed with the county.

Hope this helps,

Tim

TimB4 (Tennessee)
Posts: 21,062

Posted:

Renee,

Are you a member of the Board, a concerned member or a family member of the individual the issue is associated with?

I ask because it sounds like you disagree with the legal opinion provided (which will certainly be a more informed opinion than we could offer).

GlenL (Ohio)
Posts: 5,491

Posted:

How does or can the CICA Act disregard one's marital status on owned property?

Section 1-5 is also amended to include the concept of “member” and “membership”, which is related to, but not the same as, “unit owner”. A “member” is defined “as the person or entity designated as an owner and entitled to one vote as defined by the community instruments”; in other words, a member is an owner (or a person “designated as an owner”) who is entitled to vote cast at least one vote on behalf of a particular unit. Similarly, “membership” is the collective group of members entitled to vote as defined by the community instruments.

Section 1-25 (Board of managers, board of directors, duties, elections, and voting) is amended to require an annual election of the board of managers/board of directors from among the “membership” (as opposed to the “unit owners”). Subsection (a).

Section 1-25(b) (which required that the terms of at least 1/3 of the members of the board needs to expire annually and that all board members were to be elected at large) has been deleted and no longer applies.

Section 1-25(e) is amended to substitute the members’ (as opposed to unit owners) right to fill a board member vacancy.

Section 1-25(f) is amended to change the reference to meetings of the unit owners to meetings of the membership.

Section 1-25(g) is amended to substitute “members” in place of “unit owners” who may take action if no election is held to elect board members within a specified time.

Section 1-25(h) is amended to state that if there are multiple owners of a unit and there is only 1 member vote associated with that unit, then if only one of the owners is present at a meeting of the membership, that owner is entitled to cast the vote associated with that unit. That provision raises the question as to whether and how to handle the situation if there are multiple owners of the unit and there is more than 1 member vote associated with that unit.

Studies show that 5 out of 4 people have problems with fractions

LarryB13 (Arizona)
Posts: 4,099

Posted:

Quote:

Posted By ReneeD on 05/10/2012 8:10 AM
Per legal's opinion, the board has been instructed to inform the wife that a quit claim is in order for her husband to remain on the board.

This is strange advice. Generally, a quit claim deed removes a person from ownership. The deed derives its name from the fact that one or more owners are giving up their claim to the property, leaving ownership in the hands of the remaining owner(s). In this case, the only person on the deed is the wife and she is being advised to add the husband. A quit claim deed just does not sound like the right vehicle for doing so.

In most states it is not lawful to convey property to someone by means of a quit claim deed, although it is done frequently by those who are unaware of the consequences, which is the need for a quiet title action in court before the title can be insured, the property conveyed again, or maybe even a building permit issued.

Are you certain that this advice came from a real attorney and not someone playing one at your managment company?

KellyM3 (North Carolina)
Posts: 2,239

Posted:

The husband should be afford the voting right for his co-owned property and should qualify for board service if he's elected or appointed.

The suggest the wife quit claim her property to change the deed is simply "bananas" and a HOA board imposed obstacle to full enjoyment and access of the homeowner's association. Paying a lawyer to keep a husband off the board is wasting HOA resources. Period.

EllieD (Vermont)
Posts: 446

Posted:

KellyM3, I think that you may have missed that the OP posted: “Scenario: Husband and wife; she is owner of record”. I interpret that to mean that the Husband is not on Owner, and that his name is not on the Deed. Or did I miss something?

In a previous post I asked Renee how the Documents define Member, and the answer was that “Member” was not defined. I should have also asked how “Owner” was defined. I would think something like: "Owner" shall mean and refer to the RECORD Owner, whether one or more persons or entities etc, etc.

Also from ReneeD’s Documents: “The Voting Member OR HIS [his/her] PROXY shall be the individual who shall be entitled to vote at meetings of the Owners”.

If the Husband is not an Owner, then the wife cannot designate the Husband as “the Voting Member” because only Owners/Members can vote except as a proxy holder.

If there is only one (1) owner of the dwelling Unit, then that Owner is automatically “the voting member”.

Unless there are multiple owners of a Unit there is no one to designate.

However, she could give him her proxy. But that would have no bearing on “who is qualified to be a Board Member” per Renee’s Documents.

“Voting Member” (or “Designated Voter”, the nomenclature used in some states) is not the same as “a proxy”. As TimB4 wrote: Anyone who is not an owner of the property, given voting authority would be considered a "designated proxy" for the owner/s and not a "voting member".

As to the “quit claim” advice - per what LarryB13 posted - clarification appears to be needed.

As to how to interpret the OP’s “Our Decs also state that the Board shall consist of 5 members, each of whom shall be an owner OR voting member.”

IMO, and I am not an attorney, it is written that way in an attempt to make clear that when there are multiple Owners of a Unit, ANY of the multiple Owners of record of that Unit can be a Board Member even though that Owner is not “the” Owner designated as the “voting member” for that particular Unit.

Other than making him (the Husband) an Owner, one way to “fix” things to get the result desired, would be to revise the Documents to insert the words “or spouse of an Owner” - something like: The Board shall consist of ... each of whom shall be an Owner or voting member, or spouse of an Owner.

LarryB13 (Arizona)
Posts: 4,099

Posted:

Quote:

Posted By ReneeD on 05/10/2012 1:38 PM

VOTING MEMBERS: Subject to the provisions of Section 10.05, voting rights of the members of the Association shall be vested exclusively in the Voting Members. One individual shall be designated as the “Voting Member” for each Unit Ownership. The Voting Member or his proxy shall be the individual who shall be entitled to vote at meetings of the Owners. If the Record ownership of a Dwelling Unit shall be in more than one person, or if an Owner is a trustee, corporation, partnership or other legal entity, then the Voting Member for the Dwelling Unit shall be designated by such Owner or Owners in writing to the Board and if in the case of multiple individual Owners no designation is given, then the Board at its election may recognize an individual Owner of the Dwelling Unit as the Voting Member for such Dwelling.

After carefully reading the above passage, I think the board is correct that a person whose name is not on the deed cannot be a "Voting Member."

Per this rule, to have a voting member, one of the following situations must exist:
There is more than one person named on the deed; or
The owner is a trustee, corporation, partnership, or other legal entity.

Since there is only one person named on the deed - the wife - and the owner is not a trustee, corporation, partnership, or other legal entity, then the owner cannot designate someone to be the voting member.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Larry

I would beg to differ with your interpretation. The 2nd sentence says:

******One individual shall be designated as the “Voting Member” for each Unit Ownership.******

This says to me that any one person can be designated as the voting member, be they co-owner, spouse, friend, friend with benefits, even myself, whomever.

LarryB13 (Arizona)
Posts: 4,099

Posted:

John,

The cited paragraph is inartfully stated.

The way I read it is that if there is a single owner, that owner is the Voting Member.

"If the Record ownership of a Dwelling Unit shall be in more than one person, or if an Owner is a trustee, corporation, partnership or other legal entity, then the Voting Member for the Dwelling Unit shall be designated by such Owner or Owners in writing to the Board and if in the case of multiple individual Owners no designation is given, then the Board at its election may recognize an individual Owner of the Dwelling Unit as the Voting Member for such Dwelling."

I see nothing in the paragraph that allows a single owner to designate someone else as a voting member, even if it is her own spouse residing with her in the same unit. The rules already designate that the single owner is the Voting Member. Only those with units two or more owners or with legal entity ownership have the right to request that the board designate a voting member.

The husband in this case can attend the meetings and vote with his wife's proxy but he is not the Voting Member and cannot serve on the board.

Whoever drafted the paragraph would have done all a favor by including explictly what is implied: "When a unit is owned by a single owner who is not a trust, corporation, partnership, or other legal entity, that owner is the Voting Member for that unit."

EllieD (Vermont)
Posts: 446

Posted:

JohnC46

I believe that Larry’s interpretation is correct.

Here are a few different ways that the provision is written – all taken from Illinois HOA documents found by Google search:

When more than one (1) person holds such interest in any Townhouse Unit, all such persons shall be Members. The vote for such Townhouse Units shall be exercised as THEY AMONG THEMSELVES DETERMINE, but in no event shall more than one (1) vote be cast with respect to any Townhouse Unit. All Members holding any interest in a single Townhouse Unit shall together be entitled to cast only one (1) vote for the Townhouse Unit.

“Voting Member” shall mean and refer to a MEMBER of the Association who is entitled to cast a vote for the individual lot or Parcel.

Ownership of a Lot shall be the sole qualification for Membership in the Association. There shall be one (1) membership per Lot. If the record ownership of a Lot shall be in more than one (1) person, or if an Owner of a Lot is a trustee, corporation, partnership or other legal entity, then THE INDIVIDUAL WHO SHALL ENJOY THE MEMBERSHIP attributable thereto shall be designated by such Owner or Owners in writing to the Association and SHALL BE REFERRED TO AS THE VOTING MEMBER.

“Voting Member” shall mean and refer to the individual for each Lot who shall be entitled to vote in person OR BY PROXY at meetings of the Owners

No matter how stated, all indicate that the Voting Member MUST BE AN Owner/Member of the Association AND an Owner of the Unit for which the vote is cast. (But however, that the Voting Member is entitled the cast his/her vote for the Unit either in person or by proxy).

Even if the Voting Member’s vote is cast by proxy, the Voting Member remains the Voting Member, unless and until, for example, one of the other Owner/Members of a Unit owner by two (2) or more individuals is designated.

For example, (but not the situation where the Wife is the sole Owner) if a Unit is owned by a Husband and Wife and BOTH names are on the Deed as Owners – the Husband could be the “Voting Member” one year and the next year the wife could be the “Voting Member”. It is a designation from among the multiple owners of record of a Unit where one (1) of the Owners is chosen to cast the single vote for that Unit.

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