Ownership Restriction

Started by JeffD5 • 5 replies • 1450 views

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JeffD5 (California)
Posts: 3

Posted:

I own one lot/cabin in a California HOA (36 lots on the association). I inherited a second lot/cabin from my father when he passed away.
Our CC&Rs (written in 1977) state "No owner shall own more than one share of stock", and the current Board has ruled that I do not get to vote in elections representing this second lot that I own, and are challenging my ownership of more than one lot.
Our Bylaws, amended in 2003, contain no restrictive verbiage related to lot ownership, stating only that each member has the right to vote, owns interest in the common land, and is required to pay dues and assessments.
I'm thinking that the Board is acting improperly, as the "No owner shall own more than one share of stock" rule is probably illegal and unenforceable in California at the present time.
Anyone else faced this before?

RogerB (Colorado)
Posts: 5,067

Posted:

Jeff, whether you can keep both lots and vote on both may depend on whether or not any portion of the 1977 CC&Rs are still in effect. If the 2003 filing amended and restated the entire CC&Rs and stated they totally replace any previous CC&Rs and amendments thereto, than the 2003 would be the only controlling document. If that portion of the 1977 CC&Rs is still in effect you may want to put one lot in another person's name or sell it.

JeffD5 (California)
Posts: 3

Posted:

Thanks Roger. I guess I'm thinking that, in California, the law does not support an HOA from limiting ownership on the basis of existing property ownership within the association. I'm not sure there is any legal basis for restricting ownership in any case in California, except in the case of an officially recognized senior citizen association. One thing that's interesting about our HOA, is that there is documented records indicating that others in the past have owned more than one lot at the same time, and it appears they were given two votes (both lots were owned (on title) by husband and wife; husband voted for one lot, wife for the other.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Jeff,
For what it's worth. Our condo is 65 units, sity-give votes. Any case of multiple ownerswhip, be it husband and wife or a 15 member corporation, there is still one vote per unit. Each unit can designate anyone on the deed to hold the vote, it's their responsiility. As long as the association has a record of the qualified vote holder.

GlenL (Ohio)
Posts: 5,491

Posted:

Jeff if they get picky about it; talk to your attorney about forming an LLC or sub S corporation and sell one of your properties to it for a small price. While you would still control both and be able to vote both, one as the owner of record and the other as an officer of the corporation that owns it; you would technically only own one property.

Studies show that 5 out of 4 people have problems with fractions

JeffD5 (California)
Posts: 3

Posted:

Glen, that's a very interesting solution. One option I am considering is, putting both properties into a family trust. In a California trust, it's possible to designate a person by name to manage specific trust business, so I'll have myself as the designated person to represent one property to the HOA, and my wife as the designated person for the second property.

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