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Subject: Association Shares?
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EmilyW2
(Indiana)

Posts:11


07/20/2019 8:28 PM  
Currently shares in our association are allotted based on numbers of lots. So some owners have one, probably around half have two, a few have three and one family has five. The five lot family has two homes and with separate addresses but use the second home as a guest home rather than rental currently. Now there has been a suggestion from a few members to revise the articles and allot a share for every home. This would bring everyone except the five lot family to a single share. Does anyone’s association do something similar to our current process? What are the pitfalls with the new suggestion?
TimB4
(Virginia)

Posts:16555


07/21/2019 3:01 AM  
Pitfalls:

Higher assessments for some, lower assessments for others.
Perception of fairness
Percentage required to change covenants



KerryL1
(California)

Posts:6726


07/21/2019 7:43 AM  
Form what I've seen on this forum, most associations have one vote/assessment fee per lot owned. Why do some want to change your current typical set-up?

Each lot has one share, right, Emily? To understand: does that mean that each lot pays assessments/dues? And all of these are equal? And each lot has one vote?

If correct, the 5-lot owner has a larger "interest" in the Association and it would be unfair if they only had one vote instead of five. If they only paid assessments on one lot, but potentially can use all five, it seems unfair to other owners.
EmilyW2
(Indiana)

Posts:11


07/21/2019 11:36 AM  
Posted By KerryL1 on 07/21/2019 7:43 AM
Form what I've seen on this forum, most associations have one vote/assessment fee per lot owned. Why do some want to change your current typical set-up?

Each lot has one share, right, Emily? To understand: does that mean that each lot pays assessments/dues? And all of these are equal? And each lot has one vote?

If correct, the 5-lot owner has a larger "interest" in the Association and it would be unfair if they only had one vote instead of five. If they only paid assessments on one lot, but potentially can use all five, it seems unfair to other owners.




In the past a husband/wife who lived on a double lot plot were both on the board, both officers, and did some rather illegal things. Theoretically the rest of the board (2 other officers and a director) did not authorize their actions but it’s a bit of a legal mess right now further complicated by the fact that one of the other old officers has gone on to become the city council person for the ward our neighborhood is in. In short it appears that they will face criminal charges but we as an association will have to live with the consequences of their actions and there is not a great avenue for us to be made whole. I think this request came out of preventing that scenario again although our current president has pointed out there are other/better ways to prevent abuse of power. Currently none of the officers/board are related although the current president is the child of a former president and the former president father still owns his home and he is a committee chair. The other two committee chairs are the at large director and the current president. I am being a bit vague due to it being a pending legal matter and because I probably truly don’t know some of the details. (We did not live here when all of this happened. I have some not public details because of chairing a committee and being on the board now in the aftermath.)

Assessments are assessed on the lot but I don’t think the financial aspect of the assessment is actually a big piece of this.
PaulJ6
(New York)

Posts:382


07/21/2019 4:43 PM  
I've lived in a HOA in which each owner had 1 share, regardless of the size of the property. I had one of the smaller units, so I received more voting power, but I also paid more in dues, than if shares were based on property sizes.

I prefer to have shares based on property size. That seems fairer.
KerryL1
(California)

Posts:6726


07/21/2019 6:44 PM  
Each owner, Paul? Or each lot or unit?

sorry, having hard time following your narrative, Emily. Can you say in one or two sentences how what you wrote relates to each lot having one vote on association members' matters?
PaulJ6
(New York)

Posts:382


07/22/2019 6:03 AM  
Posted By KerryL1 on 07/21/2019 6:44 PM
Each owner, Paul? Or each lot or unit?

sorry, having hard time following your narrative, Emily. Can you say in one or two sentences how what you wrote relates to each lot having one vote on association members' matters?




Each unit. I don't know of any owners having more than one unit in that building, though.
KerryL1
(California)

Posts:6726


07/22/2019 7:59 AM  
It looks to me like some owners do have more than one lot, Paul. Maybe Emily can clarify this.
KerryL1
(California)

Posts:6726


07/22/2019 7:59 AM  
It looks to me like some owners do have more than one lot, Paul. Maybe Emily can clarify this.
PaulJ6
(New York)

Posts:382


07/22/2019 10:29 AM  
Posted By KerryL1 on 07/22/2019 7:59 AM
It looks to me like some owners do have more than one lot, Paul. Maybe Emily can clarify this.




Thus if the system in my old building were used (1 share per unit), then in the case described by Emily, each share would have 1 vote. So if owners have more than 1 lot, they'd have more than 1 share. But large lots and small lots would each have 1 share. I don't like that system; it harms large owners and small owners in different ways.
EmilyW2
(Indiana)

Posts:11


07/22/2019 11:56 AM  
Posted By KerryL1 on 07/22/2019 7:59 AM
It looks to me like some owners do have more than one lot, Paul. Maybe Emily can clarify this.




Currently shares in our association are allotted based on numbers of lots. So some owners have one, probably around half have two, a few have three and one family has five. The five lot family has two homes and with separate addresses but use the second home as a guest home rather than rental currently.

To answer your other question, those who want 1 share per home argue that the couple who did all of the damage could have never both been on the board at the same time if that was the case. Technically true but under the proposed rule DH and I both could (although we wouldn’t).
JohnC46
(South Carolina)

Posts:8892


07/22/2019 12:06 PM  
Posted By EmilyW2 on 07/22/2019 11:56 AM
Posted By KerryL1 on 07/22/2019 7:59 AM
It looks to me like some owners do have more than one lot, Paul. Maybe Emily can clarify this.




Currently shares in our association are allotted based on numbers of lots. So some owners have one, probably around half have two, a few have three and one family has five. The five lot family has two homes and with separate addresses but use the second home as a guest home rather than rental currently.

To answer your other question, those who want 1 share per home argue that the couple who did all of the damage could have never both been on the board at the same time if that was the case. Technically true but under the proposed rule DH and I both could (although we wouldn’t).




I find this confusing. How did one person get two votes unless they own two lots?

What most of us are saying is one vote per lot. If someone owns more than one lot, they get more votes as in one for each lot they own. Such as one family owning 5 lots. They get 5 votes. It it that simple.

If a lot is owned by more than one person (husband and wife, corporation, etc.), they must designate the person that votes.

Some Bylaws allow a husband and wife (even if a single lot) to be on the BOD. Other Bylaws ban such.
KerryL1
(California)

Posts:6726


07/22/2019 1:47 PM  
Directors have one vote per each director no matter how many lots they own. So even if co-ownrs serve on the board, they have one vote apiece as a director whether they own 5 lots or 1.

A solution to your problem is to revise the bylaws to permit only one co-owner at a time serve on the board.
KerryL1
(California)

Posts:6726


07/22/2019 1:47 PM  
Directors have one vote per each director no matter how many lots they own. So even if co-ownrs serve on the board, they have one vote apiece as a director whether they own 5 lots or 1.

A solution to your problem is to revise the bylaws to permit only one co-owner at a time serve on the board.
EmilyW2
(Indiana)

Posts:11


07/22/2019 2:57 PM  
Posted By JohnC46 on 07/22/2019 12:06 PM
Posted By EmilyW2 on 07/22/2019 11:56 AM
Posted By KerryL1 on 07/22/2019 7:59 AM
It looks to me like some owners do have more than one lot, Paul. Maybe Emily can clarify this.




Currently shares in our association are allotted based on numbers of lots. So some owners have one, probably around half have two, a few have three and one family has five. The five lot family has two homes and with separate addresses but use the second home as a guest home rather than rental currently.

To answer your other question, those who want 1 share per home argue that the couple who did all of the damage could have never both been on the board at the same time if that was the case. Technically true but under the proposed rule DH and I both could (although we wouldn’t).




I find this confusing. How did one person get two votes unless they own two lots?

What most of us are saying is one vote per lot. If someone owns more than one lot, they get more votes as in one for each lot they own. Such as one family owning 5 lots. They get 5 votes. It it that simple.

If a lot is owned by more than one person (husband and wife, corporation, etc.), they must designate the person that votes.

Some Bylaws allow a husband and wife (even if a single lot) to be on the BOD. Other Bylaws ban such.




Bylaws currently allow one vote per lot. As I said, about 50% of the neighborhood (including the former home of the dishonest former officers)consists of double lots. Perhaps another 10% of houses are on triple lots. The remainder (~40%)have homes built on a single lot except for one family who have five lots. So if someone has a double lot they get two votes and could theoretically have both individuals on the board. The new proposal is to allow one vote per home so most people who currently have multiple votes would only have one if we change the rules.
EmilyW2
(Indiana)

Posts:11


07/22/2019 3:05 PM  
Posted By KerryL1 on 07/22/2019 1:47 PM
Directors have one vote per each director no matter how many lots they own. So even if co-ownrs serve on the board, they have one vote apiece as a director whether they own 5 lots or 1.

A solution to your problem is to revise the bylaws to permit only one co-owner at a time serve on the board.




That was the original suggestion although it was not against co-owners as much as household members or first degree relatives. So that would also preclude closely related neighbors from serving at the same time.
GenoS
(Florida)

Posts:3370


07/22/2019 3:15 PM  
A mother owns one home. Her son another. A daughter a third. An uncle a fourth. All should be eligible to serve on the board at the same time regardless of familial relationship if they each own a home.
AugustinD


Posts:2063


07/22/2019 3:35 PM  
What percentage of all votes is necessary to amend the governing documents? For a proposed amendment that will re-distribute power to such a great extent, the HOA might face a court claim, with a judge ruling that the vote to amend (on this issue) must be unanimous. Because of the threat of the "tyranny of the majority," my understanding is that, even if the percentage required to pass an amendment is met, a court can throw the amendment out.
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