Can a Trustee function as an owner?

Hi Liz, do you mean a property that is owned by a trust? If so, the trust appoints someone to be a representative. I believe to serve on board, one must be on title. If trustee is trustee of own trust, they might be allowed on board but that should be in your election rules if you have them. Interested to see other comments.

Get copy of deed from recorder’s office. Also search owner’s name on recorder web site to see any recent changes.

Example:

We have a trust named "For Benefit of Joe Shmoe", often abbreviated as FBO Joe Shmoe. There will be trustees who act as agents for FBO Joe Shmoe; these may include Joe himself as well as others such as an adult child or a bank employee/lawyer.

The trustees themselves are not HOA members, the legal entity FBO Joe Shmoe is the owner. However, trustees may act as agents for the trust, which means voting in HOA elections *and* running for a position on the board. The trustee himself is not the board member, the trust is. The trustee is simply the agent who is acting for the trust/owner.

This is a very common situation. As I mentioned in the previous post, I'd be very surprised if CA limits the rights of trust/owners because many of the Joe Shmoes for whom the trusts were established are elderly or disabled, and discriminating against these groups would seem to violate Fair Housing laws.

EllN may weigh in later, but here's what I understand from the above case:

"Thus, under the Act, the business and affairs of SB Liberty must be managed by the members of SB Liberty or, if authorized by its articles of organization, by Greg Short, who is the sole manager of SB Liberty. (Corp. Code, §§ 17150, 17151, subd. (a).)

Here, it is undisputed, as the court properly found, that Lepiscopo is not a member of SB Liberty. The record also shows he is not a manager of SB Liberty authorized by its articles of organization to manage its business and affairs. Thus, Lepiscopo is not authorized to manage the business and affairs of SB Liberty, and SB Liberty’s members and/or manager cannot delegate such management authority to him."

So, the LLC lost, not because an agent cannot attend board meetings or serve on the board on behalf of a trust or LLC but because this particular agent (Lepiscopo) does not fit the definition of an "agent" according to the CC&Rs (among other things). An "agent" must be a member of the LLC or a manager of the LLC, and these persons can't delegate their authority to a third party.

If SB Liberty had delegated one of its members or the manager to be its agent to conduct business with the HOA, the Association would very likely have lost the case (assuming there were no other issues).

To review: This is a mere four-unit condo association. If the owner were not ill; no trust was involved; no Power of attorney is involved; and so on, then the power of one owner would normally be substantial.

Steps that I think someone (an owner, the Board, the manager?) must take here:

Identify Who Is the Owner of the Unit
Go to the county clerk's and determine whose name(s) is (are) on the deed. Also look up online who is paying the property taxes for the unit, if only to gather as much information as possible.

Can A Trustee Serve on A Board?
Under California statutes by my reading, yes. Specifically California Civil Code 5105(b)(2) says:

"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 [Article 4 'Member Election']."

See https://www.davis-stirling.com/HOME/Statutes/Civil-Code-5105. To me, this means that, where a trust's name is the only one on the deed, the trustees can select one person to run for, and if elected serve on, the the board.

Can a Trustee Vote in the Annual Election, for an Amendment, and the Like?
Yes. Again see Civil Code 5105, linked above.

Is a Trustee a Member with the Exact Same Rights as all Members?
In which specific membership rights are you interested? Attendance at board meetings as a non-director? Making motions at the annual owners' meeting? What?

The main topic of this thread does not have a one-size-fits-all answer.

Generally, Who is a "Member"?
See https://www.davis-stirling.com/HOME/Statutes/Civil-Code-4160. However, as noted above for Civil Code 5105, huge caveats exist on this subject. One has to research the specific right an entity like a trust is seeking to exercise.

Remember to distinguish between board meetings and owners' meetings. This is a tiny condo association. Which California statute provisions apply depends on which type of meeting is occurring.

Which question are you answering?

What is the basis for your answer? The case law you cited above, or something else?

Interesting even a beneficiary could possibly be a member. https://hoalaw.tinnellylaw.com/amp/board-member-qualifications-de/

This law firm article is dated 2011. The Davis-Stirling Act has been massively changed since then. I would not rely on this article to help with anything on the questions LizD3 asked.

Would you please copy and paste the sections of the SB Liberty decision that you think were helpful, at the time of the decision and apparently for at least a few months afterward, for identifying what a member is?

Then my response will start with the express, statutory definition of association "member" that became operative in 2014, with additional statutory caveats added in 2014 and/or other years subsequent to the decision.

Are you saying that it is now impossible for a beneficiary of a trust to be a member?

ElleN has agreed with the Tinnelly assertion that a beneficiary can be a member AND that SB Liberty has not been overturned. So your comments were made purely to be argumentative. They had no substance.

From Davis-Sterling

Family Trusts. “ ‘Unlike a corporation, a trust is not a legal entity. Legal title to property owned by a trust is held by the trustee.... A ... trust ... is simply a collection of assets and liabilities. As such, it has no capacity to sue or be sued, or to defend an action.” (Greenspan v. LADT, LLC (2010) 191 Cal. App. 4th 486, 522.) Because a family trust is not a legal entity, it cannot hold title to property. It must be in the name of a trustee who holds legal title to the property on behalf of the trust with language similar to the following: "John D. Smith as Trustee of the John D. Smith Family Trust dated 1/1/15."

Accordingly, the person on title (not the beneficiaries), are deemed members of an association. As members, trustees have the power to vote in membership elections and serve on the board. Frequently, the person living in the association is the trustee. Sometimes, however, the resident is a beneficiary of the trust or a tenant authorized by the trust to reside at the property. In that case, the resident has the right to use the facilities, but not the right to vote or serve on the board. Under Civil Code § 5105(b), regardless of the association's bylaws, and with certain specified exceptions, directors must be members.

JohnC46, it appears you copied and pasted from https://www.davis-stirling.com/HOME/H/HOA-Member-Defined Family. Thank you for adding something pithy. The first paragraph you posted is a direct quote from a California appeals court decision. The second paragraph is a law firm's opinion on what California statutes say about trusts at HOAs/COAs. Commentary follows.

First Paragraph
“ ‘Unlike a corporation, a trust is not a legal entity. Legal title to property owned by a trust is held by the trustee.... A ... trust ... is simply a collection of assets and liabilities. As such, it has no capacity to sue or be sued, or to defend an action.” (Greenspan v. LADT, LLC (2010) 191 Cal. App. 4th 486, 522.) Because a family trust is not a legal entity, it cannot hold title to property. It must be in the name of a trustee who holds legal title to the property on behalf of the trust with language similar to the following: "John D. Smith as Trustee of the John D. Smith Family Trust dated 1/1/15."

To reinforce this further: Yes, many legal sites say a trust is a legal entity. However, I see now that many sites say it is nota legal entity, per the common law (meaning case law). The point is so non-trivial that even wikipedia draws a distinction and says a trust itself is not a "legal entity." See https://en.wikipedia.org/wiki/Trust_law ("typically the trust itself is not a legal entity"). Typically? Hmm.

As I quoted above, D-S statute section 5105(b)(2) says:

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 [D-S Statute, Article 4. "Member Election"]

The D-S statute itself does not define "legal entity." I think a California court, reading section 5105(b)(2), would rule: "The legislators chose not to define "legal entity" within the D-S statute. That leaves this court in the position of determining whether a trust here is a "legal entity." This court rules exactly as California courts (and much other common law nationwide) have always ruled: A trust is not a legal entity."

If a California court ruled thusly, this means section 5105(b)(2) is not applicable with regards to trusts.

Right? Anyone?

TL; DR?

Second Paragraph
The law firm that provides commentary for the d-s web site opines:
"Accordingly, the person on title (not the beneficiaries), are deemed members of an association. As members, trustees have the power to vote in membership elections"Whoa whoa. Did the law firm just leap from the "person" (which in law, could be a corporation //or// a trust?) on the title being a member to the trustees being a member, even if the names of the trustees are not on the deed?

Maybe the law firm's statement denotes California case law and statutes. Yes, the law firms lawyers all passed the bar and then some. I am going to go with the law firm's position, because it makes sense and seems fair to me that any "non-natural person" (like a corporation or trust) that owns a unit in a HOA/COA should be allowed to serve on the board, or have a representative of it on the board if the owners meets all the other requirements to serve on the board.

Continuing with the law firm's commentary:
and serve on the board. Frequently, the person living in the association is the trustee. Sometimes, however, the resident is a beneficiary of the trust or a tenant authorized by the trust to reside at the property. In that case, the resident has the right to use the facilities, but not the right to vote or serve on the board. Under Civil Code § 5105(b), regardless of the association's bylaws, and with certain specified exceptions, directors must be members.

Anyway, LizD3, you have the law firm's opinion that the trustees can serve on the board.

TerriS6 has the law firm's opinion that under 5105(b), beneficiaries cannot serve on the board.

From North Carolina to Texas to California, it appears that trusts do not and cannot hold title to real estate. Instead, the trustees hold the title on behalf of the trust or the trust's beneficiaries.

See for example:

https://www.supremecourt.gov/DocketPDF/18/18-457/90143/20190228151050958_37720%20pdf%20Rini.pdf
(North Carolina)

https://haileypettylaw.com/can-a-trust-hold-title-to-real-property-in-texas/
(Texas)

https://www.clta.org/page/Consumer6#:~:text=Sometimes%20called%20an%20Inter%2Dvivos,No.
(California)

ElleN I’ve noticed when you are caught making a deliberate false representation about what someone else said, you change the subject. Feel free not to “quote” me.

ElleN, AND, especially after today, do not lecture me about MY credibility. Thanks.