Whose the Owner?

Look around the room during the next Association meeting and ask yourself how much you know about the people that are in the room of “Owners.” How do you actually know that anyone in that room is an Owner? Because they vote? Because they say they are? Because they are married to someone who is an Owner? Because they are the loudest person in the room?

Perhaps the most important thing Owners do at an Association is vote. Owners ratify budgets. They ratify special assessments. And they vote for who should be on the Board. In turn, the Board members set projects, determine the budget, vote on whether to fine people, tow cars, undertake insurance claims, take out loans, decide where and how to invest Reserve Funds, and hire and fire contractors, management companies … and lawyers. Literally everything an Association does can be traced back to a vote.

Yet how do you know that anyone is actually an Owner? Far too many times an Association simply assumes that whoever shows up is an Owner and has the right to vote. Unfortunately, this is not always the case. For years, every time I get a collection case, I have a title company conduct a title search. Part of the reason is to get a copy of the Deed and learn who the Owner is. To this day, approximately ten percent of the time the title search comes back and whoever the Association thinks is the Owner is actually not the Owner.

Long ago I represented an Association which had a brilliant Board member. She was passionate, insightful, listened well, was polite and knew how to guide the Board toward decisions. Unfortunately, not only was she not an Owner, she was the Owner's girlfriend. And as good as she was, she was setting policies for an Association where she was not an Owner and had no vested interest.

More importantly, there are more and more cases around the nation where courts have ruled against Associations for not following rules and procedures. So not knowing who is an Owner and who can vote opens the door to many problems that can all be solved simply.

Pass a rule that requires every Owner within thirty days of the passage of the rule, and thirty days after every purchase of a Unit, to forward a copy of their Deed to the Board of Directors. Solves all the problems. And make sure that as part of the rule there is language that notes if a Deed is not received during the proper time frame, the Association shall acquire a copy from the Registry of Deeds and all costs incurred by the Association to get the Deed, including by an attorney or a title company, shall be assessed to the Unit Owner(s). With this last language, you would be amazed how many people suddenly remember where their Deed is.

Once you have the Deed, you may still have some minor problems. What if, for example, the Owner is a Trust or an LLC? How do you know that the person who appears and votes is actually the designated representative of the Ownership entity? Simple, adopt language that reads something like this: “As applied to a person who is not a natural person, such as a Trust or a corporation, the word ‘person' shall be deemed for the purposes of this section to be the designated representative of any such entity.”

One last thing. Make sure you have a rule that says if multiple Owners appear at the meeting, that they cannot split their vote, and that if they cannot agree, then they can't vote. Their problems should not be the Association's problems and dividing votes becomes a math nightmare. Try this. “Where multiple owners of a Unit cannot agree to cast their Unit vote unanimouslyor cannot agree to cast their Unit vote in accordance with the agreement of a majority of them, then no vote shall be cast for that Unit.”