Developers voting rights

Started by LynnH10 • 7 replies • 1497 views

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LynnH10 (Michigan)
Posts: 2

Posted:

We are a small condominium project. When completed there will be 18 duplex units. Our original developer abandoned the project when only 8 units were complete. We formed our association and elected a board according to the bylaws in 2010.
We now have a new developer. The question we have is how many votes is the new developer entitled to. Our Bylaws state that after the first annual meeting the Developer shall be entitled to one vote for each unit which it owns. The Master Deed definition of a unit is - '"Unit" means the enclosed space consisting of a single complete residential unit designed and intended for separate ownership and use'. The developer believes a unit is any lot he owns where a condo will be built in the future.
We have a good relationship with this developer but want to be clear on voting rights. At this time, by his definition, our votes on anything don't count.

DouglasM6 (Arizona)
Posts: 724

Posted:

Quote:

Posted By LynnH10 on 08/08/2017 2:42 PM
We are a small condominium project. When completed there will be 18 duplex units. Our original developer abandoned the project when only 8 units were complete. We formed our association and elected a board according to the bylaws in 2010.
We now have a new developer. The question we have is how many votes is the new developer entitled to. Our Bylaws state that after the first annual meeting the Developer shall be entitled to one vote for each unit which it owns. The Master Deed definition of a unit is - '"Unit" means the enclosed space consisting of a single complete residential unit designed and intended for separate ownership and use'. The developer believes a unit is any lot he owns where a condo will be built in the future.
We have a good relationship with this developer but want to be clear on voting rights. At this time, by his definition, our votes on anything don't count.

Let me try the math.

10 lots still undeveloped and owned by the developer. Each of those will have a duplex built on it. A duplex is two (2) residential units. The developer has 20 votes. It doesn't mean your votes don't count....well, I guess it does.

Is the original developer named in the governing documents? Or is it just "developer".

JeffT2 (Iowa)
Posts: 880

Posted:

The master deed should have a list of all your units, with the percentage of value and voting power of each. Do you have such a list in your master deed?

If your condominium is to be built in phases or is expandable, that should also be in your master deed.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

I think some are missing the point. The developer is claiming he can vote his empty lots whereas the OP is saying there must be a unit on the lot. That is the question. Typically the developer does get votes for empty lots.

LynnH10 (Michigan)
Posts: 2

Posted:

JohnC46 understands our question. The Master Deed definition of a unit again is - '"Unit" means the enclosed space consisting of a single complete residential unit designed and intended for separate ownership and use'. It also says that after the first annual meeting, which we had in 2010, the Developer shall be entitled to one vote for each unit which it owns. So our question breaks down to is a 'unit' a completed residence or what is shown in the Condominium Subdivision Plat.

We have not had any major issues with the voting at this point. Just want to understand if there is an issue in the future.

TimB4 (Tennessee)
Posts: 21,059

Posted:

John explained your question well.

I've never heard of an instance where a developer must have a completed unit in order to cast their votes.

This is something you are going to have to take to an attorney for a legal opinion.

DouglasM6 (Arizona)
Posts: 724

Posted:

After reading it again, I agree you need a legal opinion on the verbiage. The "potential" for a unit may not be a unit.

JeffT2 (Iowa)
Posts: 880

Posted:

The answer has to be in the Master Deed. The Master Deed has to have a table of all the units with something called the "percentage of value" allocated for each unit.

Does your Master Deed have this list/table of units? Are the developer's units included in this table?

The Michigan Condominium Act says:
MCL 559.154 Bylaws...Sec. 54....(7) The bylaws may allocate to each condominium unit a number of votes in the association of co-owners proportionate to the percentage of value appertaining to each condominium unit, or an equal number of votes in the association of co-owners.

What does your bylaws say about unit voting?

Also, the Master Deed should identify whether your condominium is an "expandable" condominium, meaning that it will be built in phases, which could add the unbuilt units at a later time.

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