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JudyM9 (Arizona)
Posts: 46
Posted:
Requesting help for my (so far) futile search to find the exact language in Arizona Statutes which gives voting interest to the property (lot, parcel, house, condo) and not to the homeowner. One vote per lot. I swear I've seen it before.

Any help is appreciated.
AugustinD
Posts: 5,144
Posted:
You can try a keyword search of https://www.carpenterhazlewood.com/wp-content/uploads/2017/10/CHDB_AZ_Statute_Book_2017-18.pdf .

It sounds like you are speaking of rights that are said to be "appurtenant" to a house, condo unit, lot, et cetera. Meaning a HOA member or condo member cannot give away his voting rights to someone else, since the voting rights go with the house, condo unit, lot, et cetera. But I cannot turn up anything in the statutes that fits what you describe. Are you sure you did not see some statement in your HOA's or condo's governing documents speaking of 'voting rights being appurtenant to the (house, condo, lot, etc.)'? Googling for {"voting rights are appurtenant"} turns up a number of HOA's/Condo's bylaws that use the phrase the way you describe.
JudyM9 (Arizona)
Posts: 46
Posted:
Thanks for the tip. Will post back if I find anything.

Still open to anyone who knows this off the top of their head.
SheliaH (Indiana)
Posts: 6,964
Posted:
I would think that's in your governing documents - if you've read them and you have one vote per unit, that's probably all you need. Otherwise, ask an attorney or look for it in your state statutes, which should be online. You may have to do some searching - start with "homeowner" association" and see what comes up.

If you do find something, note the effective date. Some HOA laws apply to all of them, while others may only apply to those created after a specific date. Thus, if there is something, there's a chance it may or may not apply to you.

It's OK to ask about state or federal law, but I find there's usually an underlying reason for the question, so why do you want to know? Is someone trying to upend your right to vote?

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
KerryL1 (California)
Posts: 14,550
Posted:
I don't think I understand Judy's question. Let's say we have a parcel that's owned by a couple. Only one of them may vote. They have to decide between themselves how to vote.

Only humans can vote, not lots, homes, condos, etc.

Your bylaws under membership voting etc., should clear this up.
EllieD (Vermont)
Posts: 446
Posted:
JudyM9,

You did not mention why you were looking for those words. Since your concern seems to be voting, perhaps the following might help:
------------------------------

§33-1250 Voting; proxies; absentee ballots; applicability; definition
This statute belongs to the following Title > Chapter > Article:
Title 33 – Property
Chapter 9 – Condominiums
Article 3 – Management of the Condominium

A. If only one of the multiple owners of a unit is present at a meeting of the association, the owner is entitled to cast all the votes allocated to that unit. If more than one of the multiple owners are present, the votes allocated to that unit may be cast only in accordance with the agreement of a majority in interest of the multiple owners unless the declaration expressly provides otherwise.

There is majority agreement if any one of the multiple owners casts the votes allocated to that unit without protest being made promptly to the person presiding over the meeting by any of the other owners of the unit.
-----------------------------------------

§10-3721 Voting entitlement generally
This statute belongs to the following Title > Chapter > Article:
Title 10 – Corporations and Associations
Chapter 30 – Members’ Meetings And Voting-nonprofit Corporations

Article 2 – Voting

A. Unless the articles of incorporation or bylaws provide otherwise, each member is entitled to one vote on each matter voted on by the members. A member is entitled to vote only on those matters expressly provided in the articles of incorporation or bylaws.

B. Unless the articles of incorporation or bylaws or written agreement signed by the subject members and delivered to the corporation provide otherwise, if a membership stands of record in the names of two or more persons, those persons’ acts with respect to voting shall have the following effect:

1. If only one votes, the act binds all.
2. If more than one votes, the vote shall be divided on a pro rata basis.
---------------------------------------------

And again, because we do not know what your concern is, re Voting - this explanation from the “davis-stirling web site”, even though not Arizona, might provide some insight:

QUESTION: Our association allows only one vote per unit, even when there are two people on the title. Is this legal?

ANSWER: Yes, it's legal. The number of votes in federal, state and local elections is based on the number of registered voters. The number of votes in homeowner associations is based on the number of units or lots.

If it were based on the number of owners on title, you could have ten investors on title to four units who would then have forty votes. That would give them disproportionate power to determine the outcome of elections, especially if you have cumulative voting.
Owner of Multiple Units.

If a member of the association owns multiple units/lots, that person has multiple votes, i.e., one vote for each unit or lot owned. In a 100-unit association, if one person owns ten units, they are allowed to cast ten ballots. All of which count toward quorum. An owner of multiple units has a greater say because of their multiple votes but they are also impacted more by matters voted on by the membership.

Board Votes. The one vote per unit restriction does not apply to votes by directors if co-owners of a unit are both on the board.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Quote:
Posted By KerryL1 on 02/15/2019 12:55 PM
I don't think I understand Judy's question. Let's say we have a parcel that's owned by a couple. Only one of them may vote. They have to decide between themselves how to vote.

Only humans can vote, not lots, homes, condos, etc.

Your bylaws under membership voting etc., should clear this up.

I agree. People vote, not lots. Typically when a lot is owned by more than one person, the owners must agree on who is the voter for the lot
JohnC46 (South Carolina)
Posts: 14,265
Posted:
An aside. We had a couple show up at an Annual Meeting and they both claimed the right to vote in our election. We asked them to step outside and come back and tell us who was the voting owner. They left (in separate cars I might add) and did not come back.
KerryL1 (California)
Posts: 14,550
Posted:
Wow!! Ellie's back!! How long has it been?
JudyM9 (Arizona)
Posts: 46
Posted:
Thank you for all of the messages and helpful comments. I live in a Mandatory Country Club in Arizona. There are three of them here. They are recognized as subject to the Planned Communities Act but have separate HOAs so there are no CC&Rs (Well there are, but their applicability is a long story). We have a problem with board directors not excusing themselves from voting for special interests which benefit another corporation they belong to. They are arguing that the spouse without the special interest can be named to the board, then vote to grant the special interest.

If the voting right is assigned to the household and the household benefits from the special interest, it is a conflict of interest.

In order to prove that statement, I need to strengthen the argument with the relevant law. I am a researcher and believe I found this once in the Arizona Statutes, but can no longer find it. It does exist in California "Title 10, Section 2792.18(a) of the California Code of Regulations".

Again, thanks for anyone chiming in. This is about Conflict of Interest and Voting Rights.
KerryL1 (California)
Posts: 14,550
Posted:
But, Judy, it's about board of directors voting rights, correct?? Not members' (owners') voting rights?

Board members in US states that I've read about on this forum or in Robert's Rules of order, must vote for themselves. There are no proxies. but you're saying the s director resigns and the spouse is somehow appointed to the Board?
JudyM9 (Arizona)
Posts: 46
Posted:
The situation here is so unique it is almost impossible to describe without identifying the community. Here is a made-up scenario: two homeowners own a construction company. Their spouses run for board positions, are elected and approve a contract award to the construction company owned by their spouses. This should be a conflict of interest because the director-spouses are not disinterested parties by virtue of the "one vote per lot" rule and one of the lot owners (the non-director spouse) is benefitting.
EllieD (Vermont)
Posts: 446
Posted:
JudyM9,

Thanks for clarifying that, “This is about Conflict of Interest and Voting Rights”.

You wrote that the statement that you were looking for, does exist in California "Title 10, Section 2792.18(a)”. So being curious, I searched and found:
-------------------------------------------------------------
Title 10. Investment
Chapter 6. Real Estate Commissioner
Article 12. Subdivisions (Refs & Annos)
10 CCR § 2792.18
§ 2792.18. Reasonable Arrangements - Members' Voting Rights.

(a) With the exception of those Associations which have two classes of voting membership, a member of an Association, including an Association which provides for unequal assessments against the subdivision interests, shall be entitled to one vote for each subdivision interest owned. If a subdivision interest is owned by more than one person, each such person shall be a member of the Association, but there shall be no more than one vote for each subdivision interest.
-------------------------------------------

-- Agree, the words you were looking for, are there – BUT – in reference to “Member Voting Rights”, typically at an Owner/Member Association Meeting.

-- Your concern, as you clarified, is with: “Board Member and/or Director” voting at a Board Meeting.

-- Different scenarios. As KerryL pointed out, by writing: “But, Judy, it's about board of directors voting rights, correct?? Not members' (owners') voting rights?”

AugustinD
Posts: 5,144
Posted:
Quote:
Posted By JudyM9 on 02/15/2019 8:23 PM
The situation here is so unique it is almost impossible to describe without identifying the community. Here is a made-up scenario: two homeowners own a construction company. Their spouses run for board positions, are elected and approve a contract award to the construction company owned by their spouses. This should be a conflict of interest because the director-spouses are not disinterested parties by virtue of the "one vote per lot" rule and one of the lot owners (the non-director spouse) is benefitting.


From link above, the only Arizona statutes that appear to apply are as follows:

"33-1811 • BOARD OF DIRECTORS; CONTRACTS; CONFLICT
If any contract, decision or other action for compensation taken by or on behalf of the board
of directors would benefit any member of the board of directors or any person who is a
parent, grandparent, spouse, child or sibling of a member of the board of directors or a parent
or spouse of any of those persons, that member of the board of directors shall declare a
conflict of interest for that issue. The member shall declare the conflict in an open meeting
of the board before the board discusses or takes action on that issue and that member may
then vote on that issue. Any contract entered into in violation of this section is void and
unenforceable.

33-1243 says the same thing.

"10-3864 • CONFLICT OF INTEREST POLICY; EXCEPTIONS
A. The board of directors of a corporation shall adopt a policy regarding transactions
between the corporation and interested persons, including the sale, lease or exchange of
property to or from interested persons and the corporation, the lending or borrowing of monies to or from interested persons by the corporation or the payment of compensation
by the corporation for services provided by interested persons. For the purposes of this
subsection, “interested person” means an officer or director of a corporation or any other
corporation, firm, association or entity in which an officer or director of a corporation is a
member, officer or director or has a financial interest."
... "
[For more see https://www.carpenterhazlewood.com/wp-content/uploads/2017/10/CHDB_AZ_Statute_Book_2017-18.pdf ]

It appears to me that the only thing JudyM9 can do is require that:

-- the director with the conflict of interest (CoI) announce it at a board meeting before a vote is taken. The director with the CoI is allowed to vote.

-- the board adopt a policy pursuant to Arizona statute 10-3864 and consistent with Arizona statute 33-1811. Unfortunately I do not think this policy can require a director to recuse him- or herself. Perhaps the policy could recommend consideration of recusal.
JudyM9 (Arizona)
Posts: 46
Posted:
Thanks again. What I have concluded is a person can be on the board, vote for a financial decision which awards favors to a spouse or family member, as long as you declare it.

What blows me away is a community of about 2000 people even have to have the discussion because they can't seem to find a member to elect who DOESN'T have an obvious conflict of interest. More to the point, the environment is such that people are discouraged and bullied into not running for the positions.
RoyalP
Posts: 1,104
Posted:
..... From link above, the only Arizona statutes that appear to apply are as follows:

"33-1811 • BOARD OF DIRECTORS; CONTRACTS; CONFLICT
If any contract, decision or other action for compensation taken by or on behalf of the board
of directors would benefit any member of the board of directors or any person who is a
parent, grandparent, spouse, child or sibling of a member of the board of directors or a parent
or spouse of any of those persons, that member of the board of directors shall declare a
conflict of interest for that issue
. The member shall declare the conflict in an open meeting
of the board before the board discusses or takes action on that issue and that member may
then vote on that issue. Any contract entered into in violation of this section is void and
unenforceable. .....


CASE CLOSED

RoyalP
Posts: 1,104
Posted:
Quote:
Posted By JudyM9 on 02/16/2019 10:23 AM
Thanks again. What I have concluded is a person can be on the board, vote for a financial decision which awards favors to a spouse or family member, as long as you declare it.

What blows me away is a community of about 2000 people even have to have the discussion because they can't seem to find a member to elect who DOESN'T have an obvious conflict of interest. More to the point, the environment is such that people are discouraged and bullied into not running for the positions.

CORRECT

(posts crossed)


JeffT2 (Iowa)
Posts: 880
Posted:
I have trouble with the idea that directors can openly conspire to overcharge for services (if that is what is happening here), and it is fine because they have declared a conflict of interest. Not sure what a judge would make of that, and it may depend on other circumstances, such as the extent of fraud, if any, and any secrecy on their part.

I wonder if they did declare the conflict at an open meeting. I would want to see the minutes from all the board meetings. It seems they were trying to conceal it, in part by using the spouses' companies.

Declaring a conflict may only cover them for conflict of interest transactions, not necessarily for every other type of damages.

The law also requires directors to act in good faith, with reasonable care, and in the best interests of the corporation. These directors may not be doing any of those.

JudyM9 (Arizona)
Posts: 46
Posted:
Many of us here in HOA land are keenly aware that the process of fighting even something as blatant as a self-dealing board, is an uphill battle.

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