Voting

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Money Exchange
Summary

Earlier this year, I blogged on the case of Johnson v. Board of Directors of Forest Lakes Master Association, 454 P.3d 623 (2019) unpublished (Kansas) and explained how improperly passing and/or filing amendments can be VERY expensive. This is true in every state, and today we learn of another way that amendment errors can be costly.

The Facts

The developer created the condominium in 2008 that authorized the development of 109 units in a seven-year period.  The initial phase consisted of 33 units and through properly filed amendments the developer authorized another 18 units, for a total of 53 units.  Before the expansion time passed, the developer had sold 48 of the 53 units.  The day before the development period was to expire in 2015, the developer recorded two amendments to the deed to add 56 partially completed units.  In the initial 2018 case, the association argued and won, the court finding that “the final number of the units in the Condominium was fixed at 53 and that no additional units could thereafter be phased into the Condominium without the vote of the then existing 53 unit owners…” The association then argued that the unbuilt and partially completed units were part of the common area owned by the owners of the completed units, thereby significantly affecting the five mortgages that existed on these partially completed units.  The five mortgagees and developer took the opposite position, as otherwise the mortgages would be subordinate to the master deed and declaration of trust of the association.  It is undisputed that at the time of the sale of each of the 48 units, the mortgagees released its interest in all the common area. …
Continue Reading Improper Amendments Are VERY Expensive

Money on Fire
Summary

Not following ALL of the required procedures when preparing amendments to your association governing documents can be VERY expensive.  Take the time, money and effort to do it right.

The Facts

In 2015 the board for Forest Lakes Master Association distributed notice that it would be holding a vote to amend its voting procedure at its annual meeting.  The board and property manager alleged that they had received the required votes for the amendment.  Because of some interesting counting techniques, the number of votes in favor of the amendment kept rising.  One owner, Johnson, emailed the board and stated that he believed the board failed to follow proper voting procedures and that the amendment did not pass.  After counting the votes, Johnson confirmed his belief that the board had violated the voting procedures in their documents.  Johnson demanded that the Board find the voting procedure void.  When the board refused Johnson filed suit.  Both parties moved for summary judgment and the association also asked for attorney fees.
Continue Reading Improper Association Governing Document Amendments – How Expensive is it When You Do it Wrong? VERY

Right, Left, Wrong
Summary

Each owner of a lot in a planned community with multiple subdivisions was required to be a member of the master association – Holly Lake Ranch Association (HLRA).  Some of the owners voted to amend their particular subdivision’s respective deed restrictions.  The effect of which was to add a voting requirement for assessments, mandatory waiver of duplicate fees for additional lots, and restricted HLRA’s lien rights.  In this particular Texas case, Roddy v. Holly Lake Ranch Association, Inc., __ S.E.2d __ (2019), the court found that the amendments were “illegal” and therefore void.  In addition, the court remanded the case to the trial court to determine the reasonableness and necessity of the attorney fees it awarded to HILRA.
Continue Reading Doing Things Wrong can be VERY Costly, Which is Why Using an Experienced Association Attorney Matters

Teamwork

Time and time again we hear that one of the biggest challenges in conducting annual Association meetings is simply achieving a quorum (in other words, getting enough butts in the seats). Without a quorum, business cannot be conducted, votes cannot be taken, and the Association’s operations are virtually stymied. The Association is forced to adjourn the meeting, and start the painful process of going door-to-door and begging for proxies all over again.
Continue Reading Conducting a Successful Annual Meeting (Through Creative Use of Proxies, and Other Ideas…)

Ballot Box

I have written before on the subject of associations’ continuing struggle to convince enough unit owners to attend owner meetings in order to meet quorum requirements, and otherwise to simply get business done. Recognizing that not every condominium association may be ready to take the step to convert to “E-voting,” another way to ease the burden of low-owner attendance at meetings is the proper use of directed proxies or absentee ballots. While similar in concept, the two are legally distinct and it is important for associations to understand the differences to determine which process they can use.
Continue Reading Directed Proxies vs. Absentee Ballots: What is the Difference and Can Our Association Use Them?