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can someone not on title or trust serve on the hoa board?

Started by SashaE1 • 33 replies • 1404 views

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SashaE1
Posts: 110
Posted:
can someone not on title or on the trust serve on the hoa board? we are in monterey california and a resident says the condo she lives is at is under a trust and the trust executor is her father in law’s name who is also the owner of the condo. she says that the father in law has authorized his permission to be his representative to serve on the board on their behalf and is quoting this CA Civil Code 5105, (7) (b) (2) :
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.
SheliaH (Indiana)
Posts: 6,964
Posted:
What does your association attorney say?
If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
CathyA3 (Ohio)
Posts: 6,299
Posted:
We've had similar questions recently.

Unless your governing docs say otherwise and state law defers to the governing docs in this case, and if the trust is the legal owner of the unit, I believe the trust executor would be able to appoint a natural person to act as the owner. This would include serving on the board.

But I'd recommend getting an attorney's opinion since trusts come in all flavors and may have different rules depending on how this particular trust is structured.

The ones I'm familiar with have a single beneficiary who lives in the home and who is a trustee of the trust. That person functions as the owner, and may appoint a third party to act as a proxy for the annual meeting for example. Your situation sounds different. And a recent question we discussed here involved a board member who sold his home and tried to pass on his board position to the buyer via power of attorney. The consensus was "nice try but no". But again this isn't your situation.

GeorgeS21 (Florida)
Posts: 3,808
Posted:
I believe the answer, based in your post, is an obvious “no.”
JohnC77 (California)
Posts: 562
Posted:
Quote:
Posted By GeorgeS21 on 02/01/2021 6:24 AM
I believe the answer, based in your post, is an obvious “no.”

Wrong answer. The answer is YES.
JohnC77 (California)
Posts: 562
Posted:
Quote:
Posted By JohnC77 on 02/01/2021 7:02 AM
Posted By GeorgeS21 on 02/01/2021 6:24 AM
I believe the answer, based in your post, is an obvious “no.”


Wrong answer. The answer is YES.

Delete response.
JohnC77 (California)
Posts: 562
Posted:
Quote:
Posted By SashaE1 on 01/31/2021 6:43 PM
can someone not on title or on the trust serve on the hoa board? we are in monterey california and a resident says the condo she lives is at is under a trust and the trust executor is her father in law’s name who is also the owner of the condo. she says that the father in law has authorized his permission to be his representative to serve on the board on their behalf and is quoting this CA Civil Code 5105, (7) (b) (2) :
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.

Person has to be a trustee of the trust. You can't pick anyone off the street to allow to serve in your/their place.
KerryL1 (California)
Posts: 14,550
Posted:
You're on the Board, right, Sasha? aS you know CA requires board members to be members of the association, i.e., owners.

Civil Code says that "If title to a separate interest parcel is held by a legal entity," which might be key here. I do not believe the father-in-law owner is a "legal entity," a corporation.

Your Board can make a quick call or email to your HOA's attorney for a quick & cheap answer.
JohnC77 (California)
Posts: 562
Posted:
Quote:
Posted By KerryL1 on 02/01/2021 9:07 AM
You're on the Board, right, Sasha? aS you know CA requires board members to be members of the association, i.e., owners.

Civil Code says that "If title to a separate interest parcel is held by a legal entity," which might be key here. I do not believe the father-in-law owner is a "legal entity," a corporation.

Your Board can make a quick call or email to your HOA's attorney for a quick & cheap answer.

The father-in-law is the owner on title, so he is an owner.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Quote:
Posted By JohnC77 on 02/01/2021 9:29 AM
Posted By KerryL1 on 02/01/2021 9:07 AM
You're on the Board, right, Sasha? aS you know CA requires board members to be members of the association, i.e., owners.

Civil Code says that "If title to a separate interest parcel is held by a legal entity," which might be key here. I do not believe the father-in-law owner is a "legal entity," a corporation.

Your Board can make a quick call or email to your HOA's attorney for a quick & cheap answer.


The father-in-law is the owner on title, so he is an owner.

I agree. I also say he could designate someone via a Power of Attorney to vote for him such as the person living in the unit. That leads us to ask, can this person (the designated voter) also serve on the BOD.
JohnC77 (California)
Posts: 562
Posted:
In California, the answer is no. The trustees can vote and serve, but not the beneficiaries of the trust unless they are on title.
KerryL1 (California)
Posts: 14,550
Posted:
Wait, I think Sasha needs to clarify: Who wants to serve on the Board?? The f-in-l owner? Of course he may serve on the Board.

Here's where I get lost in Sasha's remark: "the father in law has authorized his permission to be his representative to serve on the board on their behalf..." Who is "their?" This part of the sentence is incomprehensible.
JohnC77 (California)
Posts: 562
Posted:
I read it that the father in law is authorizing the resident to serve on his behalf, which can't be done any longer.
KerryL1 (California)
Posts: 14,550
Posted:
That's what I thought, to, John77. But the resident seems to be a woman.

Whatever the case, I agree the f-in-l can't authorize the resident to be eligible to serve on the Board in CA. T I'm assuming the f-in-l is a "natural person," and not a "legal entity."
JohnC77 (California)
Posts: 562
Posted:
Quote:
Posted By KerryL1 on 02/01/2021 1:30 PM
That's what I thought, to, John77. But the resident seems to be a woman.

Whatever the case, I agree the f-in-l can't authorize the resident to be eligible to serve on the Board in CA. T I'm assuming the f-in-l is a "natural person," and not a "legal entity."

Would being make a difference?
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Quote:
Posted By JohnC77 on 02/01/2021 11:25 AM
I read it that the father in law is authorizing the resident to serve on his behalf, which can't be done any longer.

To the best of my knowledge/experience it can be done in SC. We had an owner of record who gave their Power of Attorney to their son to vote for them. Our attorney said accept it. We did not enquire about running for the BOD, but I expect the answer to be the same. I could be wrong.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Quote:
Posted By JohnC77 on 02/01/2021 2:33 PM
Posted By KerryL1 on 02/01/2021 1:30 PM
That's what I thought, to, John77. But the resident seems to be a woman.

Whatever the case, I agree the f-in-l can't authorize the resident to be eligible to serve on the Board in CA. T I'm assuming the f-in-l is a "natural person," and not a "legal entity."


Would being make a difference?

I do not see the question being the person being a/the resident or not. I see the question is can he give it to anyone?
CathyA3 (Ohio)
Posts: 6,299
Posted:
I think we need someone who is an expert on trusts.

I do know that beneficiaries, trustees, and executors are different roles, although a sibling of mine was both a beneficiary and executor for my dad's trust.

Beneficiaries generally have no say about anything. They fill out papers when they're asked to and receive money/assets at some point.

Trustees make decisions about how the trust is managed. A trustee can be a bank, which will have named an employee to act as its agent.

Executors distribute assets in the trust, usually after the original owner of those assets dies.

A high-level look at trusts: https://www.fidelity.com/life-events/estate-planning/trusts.

Given this, I would think that a trustee could serve on the board, but not beneficiaries and probably not executors since they only oversee dissolving the trust according to legal requirements. The trustee bank's agent could serve on the board.

I don't believe an executor can serve on an HOA board unless they're also a trustee. I also don't believe an executor can name another third party to act as the trust's agent in an HOA, since that is beyond the scope of his authority (I believe). I also believe that in the case of multiple trustees, there would need to be a vote to approve the choice.

But I am not a lawyer, and this is nearly everything I know about trusts.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Trust or not, did not Sasha say the fellows name is on the deed as the owner? Sasha always had problems explaining things or just did not want to so.
JohnC77 (California)
Posts: 562
Posted:
I conduct HOA elections in California, so I am suppose to know this stuff. A beneficiary, trustee or an executor can serve on a board, IF, they are also on title.
TimB4 (Tennessee)
Posts: 21,059
Posted:
This is going to depend on your governing documents.

Most Association documents allow anyone to serve on the board (owner or not). This makes it convenient for the developer.

If the Bylaws are not changed adding qualifications to serve, then most likely anyone may serve.

However, you will need to read your governing documents to find out for sure.
JohnC77 (California)
Posts: 562
Posted:
State statues in California no longer allow non-owner to serve on Boards.
TimB4 (Tennessee)
Posts: 21,059
Posted:
Quote:
Posted By JohnC77 on 02/01/2021 7:36 PM
State statues in California no longer allow non-owner to serve on Boards.

Good to know.

Also disagree with it, but that is CA and I tend to disagree with a lot that CA does.
JohnC77 (California)
Posts: 562
Posted:
Quote:
Posted By TimB4 on 02/01/2021 7:38 PM
Posted By JohnC77 on 02/01/2021 7:36 PM
State statues in California no longer allow non-owner to serve on Boards.


Good to know.

Also disagree with it, but that is CA and I tend to disagree with a lot that CA does.

Good to know
TimB4 (Tennessee)
Posts: 21,059
Posted:
Now that I have more time, I'd like to elaborate on why I disagree limiting board positions to members only.

I actually started an amendment to our bylaws to include the same qualification - must be members. Members are defined as those whose names are on the deed. When knocking on doors to gather support I discovered that many of the older members, 40 and above (and for our development, these were the people that were volunteering to serve), only had one name on the deed. This was done for various reasons.

If a members only policy was adopted, it could eliminate many from serving.

CathyA3 (Ohio)
Posts: 6,299
Posted:
Quote:
Posted By TimB4 on 02/02/2021 4:15 AM
Now that I have more time, I'd like to elaborate on why I disagree limiting board positions to members only.

I actually started an amendment to our bylaws to include the same qualification - must be members. Members are defined as those whose names are on the deed. When knocking on doors to gather support I discovered that many of the older members, 40 and above (and for our development, these were the people that were volunteering to serve), only had one name on the deed. This was done for various reasons.

If a members only policy was adopted, it could eliminate many from serving.


In my state, that would not be an issue: if you are legally married to a person whose name is on the deed, you are also an owner. The operative phrase is "legally married" - domestic partners of any sort do not qualify. If my state recognized common law marriage, then some partners would also be considered owners.
CathyA3 (Ohio)
Posts: 6,299
Posted:
Quote:
Posted By JohnC77 on 02/01/2021 4:39 PM
I conduct HOA elections in California, so I am suppose to know this stuff. A beneficiary, trustee or an executor can serve on a board, IF, they are also on title.

Sure, If they're on the title, they're an owner and we wouldn't have to worry about the trust.

However, trusts tend to be estate planning tools (ie. to avoid probate), and having an owner's name on the deed may cause problems (ie. force the home into probate despite the trust). None of the homes my employer sold that closed "in trust" had the owner's name on the deed, only the trust's name. (To make things more confusing, trusts can be named something like "Betty Jones et al. Trust", making it appear that the owner's name is on the deed when it actually isn't.
GeorgeS21 (Florida)
Posts: 3,808
Posted:
To Tim’s point - most Bylaws have/should have been changed, IMO, to owners only for directors following turnover from developers - most should also require officers to be directors.

My current neighborhood did not do this 14 years ago - and, as usual, most owners don’t know, and don’t care.
SashaE1
Posts: 110
Posted:
Thanks for your responses. To be clear, the condo is in a trust. The executor of that trust is also the owner of the condo. That’s the father in law. The resident who wants to serve on the Board is the daughter in law. She is not on any legal paper work fir either the title for the condo or the trust. She only lives in the condo. She’s claiming since the condo is in a trust to which the owner (her father in law) who is the executor of the trust has given his consent for her to serve on the Board that CA civil code makes it possible. We may have to ask the HOA attorney. I’m thinking you all are correct and that this is not allowed.
CathyA3 (Ohio)
Posts: 6,299
Posted:
Quote:
Posted By SashaE1 on 02/02/2021 8:53 PM
Thanks for your responses. To be clear, the condo is in a trust. The executor of that trust is also the owner of the condo. That’s the father in law. The resident who wants to serve on the Board is the daughter in law. She is not on any legal paper work fir either the title for the condo or the trust. She only lives in the condo. She’s claiming since the condo is in a trust to which the owner (her father in law) who is the executor of the trust has given his consent for her to serve on the Board that CA civil code makes it possible. We may have to ask the HOA attorney. I’m thinking you all are correct and that this is not allowed.

I agree about checking with a lawyer - if for no other reason that this guy isn't going to back off until you prove that he's wrong.

(I keep going back and forth on this. If father-in-law's name is on the deed, he's an owner and the trust business doesn't matter. But I don't remember seeing things like this, since it could possibly cause issues with probate which is typically the point of having a home in trust.

And the whole thing may be moot anyway, since whoever acts as "the owner" still has to be elected by the membership. Serving on the board isn't a right of ownership - seeking election to the board is. But you have to convince a bunch of other people to vote for you - if they say "no", that's the final word.)

KerryL1 (California)
Posts: 14,550
Posted:
Yes, Sasha, get advice form your HOA counsel. Should be quick & cheap.

Unless f-in-l is a "legal entity," he may not authorize resident to be a candidate or to serve on the Board.
JohnC77 (California)
Posts: 562
Posted:
Quote:
Posted By SashaE1 on 02/02/2021 8:53 PM
Thanks for your responses. To be clear, the condo is in a trust. The executor of that trust is also the owner of the condo. That’s the father in law. The resident who wants to serve on the Board is the daughter in law. She is not on any legal paper work fir either the title for the condo or the trust. She only lives in the condo. She’s claiming since the condo is in a trust to which the owner (her father in law) who is the executor of the trust has given his consent for her to serve on the Board that CA civil code makes it possible. We may have to ask the HOA attorney. I’m thinking you all are correct and that this is not allowed.

Save your self a trip or call to an attorney. The daughter can't serve on the Board or vote for that matter.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Quote:
Posted By JohnC77 on 02/03/2021 9:50 AM
Posted By SashaE1 on 02/02/2021 8:53 PM
Thanks for your responses. To be clear, the condo is in a trust. The executor of that trust is also the owner of the condo. That’s the father in law. The resident who wants to serve on the Board is the daughter in law. She is not on any legal paper work fir either the title for the condo or the trust. She only lives in the condo. She’s claiming since the condo is in a trust to which the owner (her father in law) who is the executor of the trust has given his consent for her to serve on the Board that CA civil code makes it possible. We may have to ask the HOA attorney. I’m thinking you all are correct and that this is not allowed.


Save your self a trip or call to an attorney. The daughter can't serve on the Board or vote for that matter.

If given POA from the owner (her father in law), I say she can vote. Be on the BOD is another question.
KerryL1 (California)
Posts: 14,550
Posted:
JohnC, she cannot vote for HOA matters or be on the Board in CA, we're not talking about SC. These states were eff. in CA on 1/20.

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