Voting it Away

First I would like to thank everyone on this forum on giving so much of their quality and quantity of time in helping. I have several questions but I wanted to get squared away on my first questions before asking more. We are a tiny condo and we are going through the docs and needed some explanations.

MASTER DEED
It states the ownership share and voting rights.

Ownership share is "undivided share of the unit owners in the common elements and common surplus and the undivided share of the common elements assigned to each unite shall be set forth in exhibit C annexed thereto." That is the proportional share of expense and ownership by units. Our units are different sizes. We have folks who recently figured out expenses should be proportional but they may not realize that it is also ownership share.

Voting: One unit per vote.

Later in the master deed they talk about the rules for amending the master deed.
They mention directors needing to be at least 66 2/3 in agreement "and by not less than 66 2/3 percent of the members of the Association except as to an amendment altering the share of the common expenses of the condo or the voting rights of any of the owners of the condo which shall require the approval of one hundred (100%) of the owners.

My thought was the act of changing share of common expenses or voting rights needs 100% of the vote. The million dollar question is the 66 2/3 percent of the members of the association. Is that the (one unit one vote) or is it actually the membership percentage and that is the proportional percentage of the ownership of the building? Unit A 40 % and Unit B C D E have 15% each. So for any amendments you will need to have unit A involved in any changes and Unit A will need at least two other units in combination to get over the 66 2/3 percent. Is that correct? QUESTION 1.

State doc
l.“Majority” or “majority of the unit owners” means the owners of more than 50% of the aggregate in interest of the undivided ownership of the common elements as specified in the master deed. If a different percentage of unit owners is required to be determined under this act or under the master deed or bylaws for any purpose, such different percentage of owners shall mean the owners of an equal percentage of the aggregate in interest of the undivided ownership of the common elements as so specified."

BY LAWS
Based on above here are the other questions.
Changing the by laws is straightforward it has to be 100% of the unit owners.
Quorum
Meeting in person or proxy 66 2/3 percent of unit owners shall constitute a quorum and acts of the majority of the unit owners shall be the acts of the association. They define this as "majority of owners herin means the owners of more than fifty percent of the aggregate in interest of the undivided ownership of the common elements as specified in the master deed.
QUESTION 2. This means quorum based on the numbers Unit A needs to be at the meeting with at least two other units. The acts needs to have Unit A and one other unit or all of the other units to be a majority. Is that correct and what does "acts" mean?

Voting.
Voting by the members o the Association in the affairs of the assoc. shall be on the basis of one vote per unit. Some more verbiage that if more than one co-tenant votes its basically a proportion to unit. So two votes in a unit they split that vote 1/2 each.
QUESTION 3.
Here is a scenario. A perfectly good fence in good condition units C D E think its ugly and needs replacing. One vote per unit C D E votes in favor Units A B votes no. Is that a majority of 3 yes 2 no wins simple vote. OR IS IT 45% (C D E) yes and 55% (A B) no and this fence project fails.

I kick myself in the butt for not utilizing this forum. I should not have agonized on this condo setup for years and trying to get the building to act like a condo.

Thanks!

As noted in my first post, in the definitions section, the statute makes clear that this definition of "majority" applies solely to the statute.

Who is "they"? Is "they" the statute? I am betting "yes."

Only if the Master Deed has a definition of "majority" yada identical to the statute's definition.

"Acts" means decisions.

If you carefully read the law you quoted, whenever your condominium needs to determine a percentage, "under this act or under the master deed or bylaws for any purpose" you must add up (aggregate) the individual ownership shares of the votes. So you have to add up all the little percentages to get a total. This is what the law says (in somewhat weird but ultimately understandable English).

This is for voting by the owners. This does not apply to voting by directors at a board meeting. Board members get equal votes.

The law that you quoted should take precedence over your master deed and bylaws, unless some other law says otherwise.

I think the only way to interpret one vote per unit, is that each vote has the weight or percentage of ownership interest.

Here are some clarifications.

In the docs under the master doc.

"UNIT means a portion of the Condo property which is subject to private ownership and includes the proportionate undivided interest in the common elements and in any limited common elements assigned in this Master Deed or any amendment thereof. "

"Units Owner means the owner of a unit in the condominium. "

Thanks Ellen for the explanation for ACTS.

The word THEY is actually the condo docs itself. Very insightful comment Ellen that you were wondering about any verbiage linking back to the state law.

Straight from the docs
Quorum:
The presence at any meeting in person, or by proxy, of 662/3 percent of unit owners shall constitute a quorum and the acts of majority of the unit owners at any meeting at which a quorum is present shall be the acts of the Association except as otherwise provided herein. The term majority of unit owners herein means the owners of more than fifty percent of the aggregate in interest of the undivided ownership of the common elements as specified in the Master deed.

The summary so far for the three questions at this time and is subject to change based on more feedback.

Question 1: What is the amendment rule concerning the membership? At this time it is simple head count to get to the 66 2/3. I will poke around with perspective of what Ellen is mentioning that no percentage was called out and is a straight number of unit members.

Question 2: What is the quorum rules and decision rules. Quorum also looks like simple headcount to get to the 66 2/3. The Acts (decisions) of the condo is by at least 50% percentage ownership of the association.

Question 3: I agree with Jeff we are looking at the voting by unit with the backing and translation of the vote to each unit share of the association and the percentage of ownership wins out over the straight vote. There has to be over 50% ownership percentage to make this vote work. The this means the fence vote fails.

In regards to the state definition of "majority" I view this as definition of ownership majority of being over 50% and if the individual condo assoc wants to have something greater than simple majority then it can but the percentage of ownership has to equal that new supermajority percentage.

Any info I will gladly take.

Ellen,

You nailed it! You basically saved me a psychiatrist visit.

Now let’s set the stage for the curveball.

Here it goes.

Condo Assn in existence for 25 years with no semblance of any workings of a condo assn. So far avoided litigation. No elections ever. Utilities and insurance and minor repairs done only with no fire safety etc being done. Lately the big stuff is getting done with turmoil.

The situation is more of a tennis match. Let’s change the numbers to 3 units. Directors are 2 head count Proportion is A 25 B 20 C 55. No elections so no directors they are winging it. Someone read the docs and said all expenses are proportional instead of being divided equally among units. This is correct. The return volley is that the larger unit C might invoke the majority in decisions of the condo since they have a greater proportional vote in decisions and paying the larger share of all expenses. That is correct according to the docs. The next volley is elections. NJ law only one director can come from a unit. Hypothetically Unit A and Unit B are the directors. When directors propose and vote in unison and the membership votes you have the same units A and B rubber stamping. This will also applies to the by-laws. New NJ rule that if condo has no by law amendment or by-law amendment changes is greater than 66 2/3 then the State rule of simple majority takes place. This negates the 100% vote for bylaws. No changes for the master deed however for unit voting and percentages of ownership. Again you have unit A and B can change bylaws by simple majority of head count vote.

That is the scenario. Everything above looks legal. The new proportional expense is documented and is correct. Proportional voting is not new in condo asssn around the country and is old hat and docs support that. The master deed and by law voting is also correct. What you have here is an ethical question on the fundamentals of the rubber stamping strictly due to the number of the units and the number of directors.

Anyone has this scenario and opinions on this scenario? I have to get some Tums.

Are you certain that the rule you paraphrased applies to your condominium? Because it appears to me it applies only to certain retirement communities.

The rule appears to come from

N.J. Admin. Code § 5:26-8.13 - Amendments to the bylaws

which comes from

N.J. Admin. Code § 5:26 PLANNED REAL ESTATE DEVELOPMENT FULL DISCLOSURE ACT REGULATIONS

whose definitions section is under "General Provisions" and defines association as follows:

"Association" means an association for the management of common elements and facilities, organized pursuant to Section 1 of P.L. 1993, c. 30 (N.J.S.A. 45:22A-43).

N.J.S.A. 45:22A-43 is a section of the NJ "Retirement Community Full Disclosure Act."

you beat me to the finish line.

Here are the quick links to the summary of the law.

https://www.hillwallack.com/D444E6/assets/files/Documents/HW_Radburn-Bill-cmyk_5x8-v2A-nocrops.pdf

https://beckerlawyers.com/the-radburn-act-and-amending-the-bylaws/

Yes, I screwed this up. Please disregard the earlier post by me.

GregoryT1, would you please quote verbatim the section of the bylaws that says 100% of the owners/interests must vote in the affirmative to amend the bylaws?

I find the statute section somewhat ambiguous, because the statute does not define either 'total votes' or other phrases, like "based on."

I see no other sections of the statute that might clarify this.

Just saying: When a court finds am ambiguity under these circumstances, it next turns to the legislative history. But I doubt the legislative history would clarify.

I would want to scour the bylaws for what else it says about "votes." E.g. is there an elected board? If so, how are votes counted?

If the bylaws in their entirety offer nothing more, then I am left with this:

The statute speaks of 'total votes.' It does not speak of "total owners." It does not speak of "total ownership interests." The bylaws say voting "shall be on the basis of one vote per unit." In your 3-unit (25%, 20%, 55%) scenario if I had to bet, then my bet would be a court would require a simple majority (meaning any two) of the three owners to support a proposed bylaws amendment for the amendment to take effect.

I thought about the fact that the bylaws were written long before the 2017 Radburn law. I do not think this really matters.

I advise trying to get 100% of owners to agree to amend the bylaws to require a simple majority for amendment, where a simple majority is at least any three of the five units, with no regard for percent ownership interest.

hi,

I think we are in agreement in most of the things.

What is outstanding is the ethical issue of directors from unit A and unit B proposing amendment changes and in turn being able to vote as A and B in a three unit situation and get a rubber-stamp approval. This will be for the master deed or the by-laws. Within the condo docs there might be no rule stopping it but based on any state laws for unethical behavior if the amendment changes were egregious, unethical etc.

That is the outstanding dilemma I am trying to figure out.

I will look around and see what I can find.

Ellen the board of directors consists of two directors

Section 3 - Elections and Terms
Directors shall be elected by secret ballot of the separate unit owners at each annual meeting or any special meeting called for that purpose, to hold office for a period of one (1) year, or until their respective successors have been elected., subject to removal as herein provided, such that each Director shall own, have an interest in or represent a separate unit in the Condominium.

Thanks Ellen and Jeff for being on this journey. I will retire to an island.

For a three-unit condo association where two owners vote for an amendment and the third owner opposes the amendment, here is why I see no ethical situation: Because all three owners bought their units knowing in advance what the Master Deed and Bylaws say and the terms for amendment.

A deal's a deal.

As for amendments that appear to be grossly unfair: Nationwide the courts apply a "reasonableness" test to amendments. (The same 'reasonableness' test is not applied to the original governing documents, with the exception of covenants or bylaws that violate state and federal fair housing law.) For example, if an amendment imposes conditions that are a severe burden on a minority, then the courts may very well rule the amendment not enforceable. So if your A and B above vote to amend the Master Deed such that the amended Master Deed requires that C pay all the association's expenses, and A and B pay nothing, then a court would throw this amendment out.