Definition of an HOA "Member"

Corporate Limits - I'd have to see the context the term is used in. It may mean the physical limits or the limitations of authority.

Member - The owner of the property as recorded on the deed. If you are incorporated, this should have already been defined in your Articles of Incorporation.

Good Standing - No more than 30 days behind in paying assessments.
That said, some Associations also include having no current violation. I don't like using that one as it allows a Board an opportunity to swing a vote by citing people for various small infractions just before elections.
Also check your State laws. Although our documents specify 30 days, VA law, my State, specifies 60.

Since your in Michigan, I took a look at what your State defines as member. Here is what I found:

Member - Per 450.2108 of the NONPROFIT CORPORATION ACT:
(1) “Member” means a person having a membership in a corporation in accordance with the provisions of its articles of incorporation or bylaws.

For the whole act see: http://www.legislature.mi.gov/%28S%28v0q3pobzmmn44x55pmx1xr23%29%29/mileg.aspx?page=getObject&objectName=mcl-Act-162-of-1982

Hope this helps,

Tim

Stephanie,

I, too, do not understand the term "corporate limits." I do not recall ever hearing that term before.

As a general rule I recommend against defining terms in your bylaws that are defined elsewhere. (In my association the term member is defined in the CC&R's and also in the bylaws. The definitions are not identical and I can see a hungry lawyer seizing upon this someday.) If your CC&R's define the who is a member, your bylaws should either remain silent on the matter or refer to the definition set forth in the CC&R's.

"Member in good standing" often means a member who has paid his assessments and has no unpaid fines. If you choose that definition, then there are situations that should be dealt with:

- Members not in good standing should be excluded from any compuations regarding quorum or percentage of votes cast;

- A determination of who is not in good standing should be made some time prior to an election and the members should have an opportunity to resolve the issue prior to voting. (Worst case is a member not in good standing shows up to vote claiming that he mailed his payment in yesterday; he votes but no payment is ever received);

- Members who owe fines should not be excluded until all appeals have been exhausted;

- Members not in good standing may be excluded from use of some amentities, such as the swimming pool;

- You probably cannot lawfully bar a member not in good standing from attending either board or membership meeting;

- Some gated communities have disabled gate access for members not in good standing. I would recommend doing this only after consulting an attorney as this would be denying the owner lawful access to his property.

- If your CC&R's can be amended by a percentage of "property owners" then there is likely no legal basis for excluding a member not in good standing from the amendment process.

As to your other questions:

Most associations seem to be content with referring to the party who owes assessments as a member or an owner.

What to call those who live there? How about residents or occupants. Not all persons who reside in a home are owners.

Unless you have some odd laws in your state, a corporation is not comprised of real estate, so any attempt at defining the corporation in real estate terms is off base. At the outset, your developer should have recorded either a plat or a deed delineating the boundaries of his property. He would subsequently record CC&R's referring to the recorded plat/deed. The CC&R's then state that anyone who buys a lot within those boundaries becomes a member of the incorporated association. The corporation is made up of members, not real estate, even though membership and land ownership go hand-in-hand.

Tim:
Thanks so much. Your post did make me go back and do more research. One of our challenges is that we were incorporated under an old “Summer Resort” act in Michigan (PA 137).

I am going back and reading this Act thoroughly and reviewing our Articles of Association which don’t describe ‘MEMBERS’ but states ‘The names and residences of the persons thus associating are …. [followed by individual names and addresses of original parties …. Then followed by geographic plat descriptions.]

Melissa:
Thanks and I probably confused you! No builder involved. This is an old summer cottage area turned into permanent homesteads.

MatthewW4:
Thanks for the long post. I am going to have to figure this ‘Corporate Limits’ thing out with another Committee associate that has some history. The By-Laws have these limits listed as Subdivisions that are on County map. I trust that these Subdivisions line-up with the geographic/legal land descriptions in the Articles of Association – we will check these however. This does align with your post -- especially your last paragraph.

Here are two of many conundrums:

The primary ‘value’ of this Association is: private roads, beach and lake access

1.) Some of the properties in the Association don’t need or use the roads and thus don’t pay dues. No biggie really but we should formally ‘except’ these properties somehow (I would think) and/or charge them a nominal fee for beach/lake access if they use it. Like a two-tier membership.

2.) Dues are required per Homestead (whether one, two or several owners). They are referred to as “Membership Dues” … but everyone living in that household are “members” and can enjoy the beach, lake, etc. Drawing distinctions between Members and Residents seems important especially when it comes to paying Dues and Voting (as you mention). 1 Vote per Dues Paid and 1 Board Member Eligible per Dues Paid (yes we have a Board with two individuals from the same household).

Thanks for the help everyone – any further advice on the above conundrums will help.

The rest of your post Matthew on ‘good standing’ was helpful. I had a handle on the basics but you threw in some things we still need to work on (we never levy fines, we have no appeals process, we cannot disable our roads, Beach, or Lake LOL … but we need to address some of these things, somehow). Tx. Again.

No Dave -- individual homes. Thanks though! I did look up some old threads and found some interesting Michigan links (some still active). I'm also looking at Companies that specialize in Managing Associations -- that may be the 'Best' solution. Hire professionals!!

Thanks John -- I do have the Articles of "Association" and unfortunately ... MEMBER is not defined.

As I mentioned earlier it states the names, addresses and properties that are associating. The Public Act, however, under which the Articles were issued does describe 'MEMBERSHIP'.

We have no covenants and restrictions. We have no policies.

It all seems to becoming down to a By-Law rewrite to beef-up definitions and guidelines. Thus, my challenge.

Stephanie, My CC&Rs (Declaration) originated in 1939 and has never been amended. The plat/subdivision was annexed to the city in 1958 and in the same year Incorporated per our Secretary of State. The current Bylaws (definitions, below) were rewritten in 1995 and make 24 references, in most instances followed by the phrase, "pursuant to the Declaration." I think that our CC&Rs, being older than most contemporary condos and HOAs, may give you some further ideas since your properties seem, like ours, to have a lot of variation. And JohnB26 is correct about reviewing your Secretary of State bylaws for non-profits. In our case, a few Articles are even more liberal than our current Bylaws (for instance, our Bylaws require 51% for a quorum and the State sets it at 20%).

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BUILDING
A structure constructed upon a lot.

COMMON AREAS
All land, including any and all improvements within the District, but not within a Lot, owned by the Association for the common use and enjoyment of the Owners and the tenants and invitees of each Owner.

COMMON AREA FACILITIES
All property, real and personal, which is constructed or located on, in, under, or above the Common Areas, or which is used in connection with any of the foregoing. The present common area facilities are limited to the subdivision entry at XXXX streets and the flower bed located at XXX.....

DISTRICT
The property governed by these Bylaws and subject to the Declaration: Lots 1, 2... [may or may not be inclusive] in Block 1, etc...etc.; and such additions thereto as may hereafter be brought within the Declaration by amendment, and thereby within the jurisdiction of the Association.

LOT
A Lot or lots shall mean any area of real property included within a common boundary and upon which a member’s residence is located, whether or not the legal description for such lot includes one or more legal lots, and the deed for such property contains a provision that it is subject to the Declaration. Appurtenant to ownership of such lot and included therein shall be membership in the Association.

OWNER
Record owner, whether one or more persons or entities, of fee simple title to any Lot which is subject to the Declaration and any amendments thereto, including contract sellers, but excluding any interest held merely as security, whether by mortgage or otherwise.
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MEMBERSHIP AND VOTING RIGHTS
1. The Owner of each Lot shall be a member of the Association until such time as his/her ownership ceases for any reason, at which time his/her membership shall automatically terminate. The Association may own common areas. Membership shall by appurtenant to and may not be separated from ownership or any Lot which is subject to assessment, and the conveyance or other transfer of ownership of a Lot shall coincidentally transfer membership in the Association, together with all of the rights, privileges, and burdens of such ownership, as set forth in the Declaration and Bylaws of the Association. Provided, however, members shall not be entitled to vote at any meeting or to sign any petition or participate in any other Association business unless and until the dues chargeable to such member are paid to date and such member is not otherwise in default under any rules of the Association, its Bylaws, or the Declaration. Members shall vote at any meeting in person or by written proxy duly filed with the Secretary of the Association as set forth in Article IV (5) hereof.
2. For purposes of voting on any issue, all members shall be Owners, and each Owner shall be entitled to one (1) vote for each Lot owned. When more than one person or entity holds an interest in any one Lot, all shall be members; provided, however, that no Lot shall have more than one (1) vote. Tenants of Owners may attend the Association meetings and shall be furnished with the Association’s newsletter, at such Tenant’s request, but shall have no voting rights.
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Stephanie, if your lots are somewhat equal-sized (which I doubt, given your property description), a standard assessment for each owner/lot would be appropriate. However, our lots range from under 6,000 square feet to over 20,000 square feet so our CC&Rs state that owners are to be charged per square foot of assessable land. (Excludes streets, parks, and common grounds which we no longer own, due to City annexation.) Regarding votes to amend the document, the 1939 document requires that "by written consent, the owners of two-thirds of the AREA of the district, [quite different from 2/3 OF THE OWNERS!] may be given such additional powers as may be desired by said members..." Again, supporting the premise of charging [assessments] per square feet of land area, not per owner. With responsibility comes privilege.

Perhaps an interesting dilemma is that Charters/Declarations/CC&Rs always trump Bylaws; our Bylaws define what creates "good standing", but the Declaration which predates them by some 55 years, addresses only delinquencies with no mention of penalties. It soon became clear (just like our non-amendable dues cap) what a simple concept it was to understand; when covenants "run with the land" membership cannot be revoked or held hostage by penalizing the member-owner. An "owner" never ceases to be an owner.

LIENS are the remedy for non-payment of assessments or damages to property (by owner or his guests) as stated in our 1939 Declaration. Any liens not filed, enforced, and collected per Court order, will be collected upon sale of the home. Title companies get paid to research and discover whether there is an HOA and if so, will call the HOA Registered Agent (on file in SOS office) for the amount. So the association WILL get its money--sooner or later. A review of our higher document (1939 Declaration) supports the homeowner not being penalized from voting or any other business, unlike having been later written into the Bylaws.

Well, John, I didn't include those because they didn't seem of concern to the OP.

OutC: Your post was very insightful and applicable in many ways. It sent me on another round of research. I am still confused about what exactly a 'Declaration' is and I am pretty sure we do not have CC&Rs but I will have to check. I am understanding the significance of precedence, however, that you and others have referred to.

Thanks too for the help and the notion of 'Assessments' which is clearly allowable for our situation. This approach does make a lot of sense when lots vary considerably (footage versus many, many acres). I am going to look into this further.

So I think I've gathered a fairly good definition of a 'MEMBER' for our situation based on reviewing all applicable laws. There is much work to do but all the help here has been terrific.

Cute John -- let me ask you this ... does each HOMEOWNER on the deed constitute a 'MEMBER' and a 'VOTE'?

Thanks for any response.

Steph

Most docs I know say one vote per unit. The owner(s) (be it two or two hundred) can designate the one (and only one) who votes.

We had an issue where a husband and wife were going through a nasty divorce. Both came to vote. They had joint ownerships. We said if more then one owner, the owners must designate which one is to vote. They refused. We did not let either vote.

Also seen issue where one person is on the title as owner. Their live in spouse shows up to vote. The vote was challenged as not being an owner. Challenge upheld. They were both pi$$ed......LOL

It can get sticky.