msmumr

15 hours ago, Joshua Katz said:

I'm not going to answer legal questions (certainly not at this billing rate!) for the usual reasons. However, I think I can say with confidence that approving a settlement does not make a court a party to litigation. 

Again, much obliged, for the help. No, the court was not a party to the settlement, that's correct, but the mediation process was "supervised" by the court under mediation procedures and local rules of court,. The same court would promptly entertain a motion to enforce the agreement, and its terms provide for any non-breaching party to have immediate access to court for an injunction and award of attorney fees.

Again, many thanks.

15 hours ago, J. J. said:

I think you should check the bylaws as well, because some property organization base the voting on the number of properties known.  If, for example, one person owns 2 houses, he gets 2 votes.  This might not apply in this case, but you should double check. 

Thanks J.J. (and all the other cogent and helpful comments: The governing documents (including the by-laws) allow a non-resident owner to vote, one vote per lot. A renter cannot vote. An investor could own several homes (lots are not sold  alone - the developer owns bare lots and builds residences to specification) and when the City issues a certificate of occupancy to the developer he can sell it to a third party. The settlement agreement specifically references amendment of the CC&R's (one of a set of inter-related governing documents) extending the voting rights granted the developer during his control period. This is described by an algorithm ( total lots in a master plan minus lots sold to third parties lots) at the time of voting (which in the recent board election was about 80 lots).

Thanks again for all the help.

9 hours ago, J. J. said:

I think you should check the bylaws as well, because some property organization base the voting on the number of properties known.  If, for example, one person owns 2 houses, he gets 2 votes.  This might not apply in this case, but you should double check. 

Thanks J.J. and all the very insightful comments: Yes, the voting is by lot number and owner. If a non-resident investor owns several homes and rents them our (under this restricted community rules) he can vote each lot, or even if the house is vacant half the time, and he may live in a NYC condo, visiting one of his homes in the prime season.

But, there is something about "painting yourself in a corner" that is easy to comprehend too when the By-laws are silent and the agreement was not submitted to a full vote of the membership.

29 minutes ago, Joshua Katz said:

And they have to follow their bylaws, but for separate reasons. They painted themselves into a corner, and it happens to be that the bylaws are the easier ones to fix. The two do not exist, though, in the same hierarchy. That's why there's a problem.

You have to refrain from murder. If you adopt bylaws requiring murder, you will need to change your bylaws or violate one or the other. You'll probably choose to violate your bylaws (although, if it's the kind of organization that would adopt such a bylaw, maybe not). You are allowed to paint yourself into a corner.

The reason this case looks different is that they wrote a contract incorporating a procedural rule. At a meeting, if they try to follow the contract, I think a point of order should be well-taken. If they try to follow the bylaws, I think a point of order should not be well-taken. Hence, as a procedural matter, the contract does not supersede the bylaws.

 

Much obliged: Query-   if the 80 votes are "illegal" under RONR , can the developer walk into circuit court and get an injunction against enforcing RONA , if the by-laws are silent or don't mention the specific procedure adopted by the mediation settlement? This agreement is not a common law contract with parties alone. The court is a party inasmuch as it approved the settlement to end litigation, dismissing it with prejudice, removing it from a crowded court docket. 

On 12/10/2019 at 10:12 AM, msmumr said:

Thanks for the very detailed comments on the governing documents explicitly allowing the developer to vote unsold lots. There seems to be this authority in the so-called CC&R's of the HOA which were voted on by the members and adopted after the mediation.   

Many thanks for all the insights about RONR in this "voting challenge" (one that may become more common as these HOAs built out). It appears that the 80 developer votes would affect the election as to one candidate, if they were assumed for this person. If excluded, another candidate finished second in a multi-candidate - two vacancy  race. The challenged ballots were segregated. The mediation agreement was binding in settlement of a lawsuit between the HOA and the developer that involved several other disputed points, e.g., completed homes not paying base lot fees to the HOA until a certificate of occupancy is issued by the developer - one of the concessions made by the HOA in return for the developer paying fees on all his unsold lots regardless of completion once platted. - hence he being allowed to then vote the 80 lots - as he has been doing for two years, without challenge.

Query: does RONR require this "voting concession"  to be an amendment to the by-laws before it is valid?

21 hours ago, Richard Brown said:

Thank you for the additional information.   That throws a substantial new wrinkle into things.  In short, this appears to me at this point to be as much a legal question for the attorneys to resolve as it is a parliamentary one.

From  a parliamentary standpoint, unless there is superior state law or a superior document such as a corporate charter which provides to the contrary, the bylaws are the supreme governing document.  Only those members specified in the bylaws have the right to vote.  That is not just a rule in RONR, it is a fundamental principle of parliamentary law.  No rule can be suspended so as to grant the right to non members or other persons not entitled to vote.  From a parliamentary standpoint, it appears that the agreement between the HOA (I  suspect it was actually the HOA board and not the membership that entered into this agreement) and the developer, even if arrived at through mediation would not be valid for granting the right to vote to those not otherwise entitled to vote.  However, this mediation may have been a legal proceeding of some sort in which the prohibition on the developer voting unsold lots was at issue and it may be binding.  That is a legal question beyond the scope of this forum. 

We can tell you that from a parliamentary standpoint and as far as the rules in RONR are concerned, neither the HOA membership nor the HOA board nor a HOA committee have the authority to waive or suspend or modify bylaw  provisions to grant the right to vote to someone prohibited from voting by the bylaws.

There might well be other superior laws and documents, such as state statutes, court cases, and articles of incorporation, which do grant this right.  That is for the attorneys to decide.  We can just tell you that based on the rules in RONR, the rules in the bylaws and other controlling documents regarding who can vote cannot be suspended or modified except by amending the bylaws unless some superior provision provides otherwise.

Thanks for the very detailed comments on the governing documents explicitly allowing the developer to vote unsold lots. There seems to be this authority in the so-called CC&R's of the HOA which were voted on by the members and adopted after the mediation.   

20 hours ago, Richard Brown said:

I agree.  Among other things, i think we need to know a lot more about how the "HOA agreed to" let the developer cast votes for the unsold lots.   Knowing what the bylaws say about the right of the developer to cast votes at this stage of the association development is also critical.

Much obliged for the comments. The HOA appointed a committee to negotiate the transition from the developer control phase. Both sides hired lawyers.This went to a protracted mediation with a retired judge as mediator. The mediation resulted in a binding agreement enforceable in court approved by the HOA board. In it the developer retained the right to vote his remaining unsold lots (80), a right he had under his control period for all platted lots until sold to new residents. There have been eight votes by the community since mediation agreement was posted on the HOA web site, each time the 80 votes were counted. Now there is a challenge in a board election where there are two vacancies and several candidates, some of whom object to the mediation settlement, especially the developer voting unsold lots. The point is made in this protest that these votes are cast by secret, sealed envelopes, one per lot, which have to identify a lot number and be signed by a lot owner on the outside of the envelope,. without which the ballot inside is supposed to be rejected. The developer's lots have no lot number or owner to sign the outside of an envelope other than his own platt designation for the 80 lots and his company president signing, presumably voted in the past by putting 80 ballots inside a single envelope listing the platt/designation on the outside.

Thanks for all your counsel and advice.

17 hours ago, Bruce Lages said:

Yes, if the ballots in question are not of sufficient number to affect the outcome of the election, then the election will stand. But, if this is a 'written secret ballot' election, as you state, how can you determine which ballots are supposedly illegal? And, while you're at it, do you know why some ballots are considered to be illegal?

Thanks Bruce,  (1) This is an HOA,  each homeowner gets one vote and must put his lot number on the sealed ballot envelope and sign it, to identify his right to vote. (2) The supposedly illegal ballots are from unsold lots voted by the developer beyond his authorized control phase. The control period notwithstanding, the HOA agreed to allow him  to vote the remaining few unsold lots. This decision is being challenged, along with these votes (maybe 80 out of about 3000 possible).

Hey Rob: 

2 hours ago, Rob Elsman said:

Yes—within limits. See RONR (11th ed.), pp. 444-446.

Thanks. Could the ballots being challenged be segregated and if enough other ballots existed for a majority to elect the new board members, could the election be 'certified' under RONR  without counting the challenged ballots.

Can a board election under secret written ballot be challenged by one member who believes certain votes are 'illegally'?

Much obliged, Messrs Kapur and Martin, you have understood the main issue. HOA boards are caught in a transition going from the initial developer control period to the later HOA control period when the project is nearly built out. Enter the legislature, at this critical stage, it inserted the Community Association Act. Closed board meetings become open., except for categories of sensitive subjects. Contending factions, only small groups, try to seize control. Board members , catering to one constituency or the other become more loyal to it than the board, believing they are acting in the best interests of the community as a whole. This violates the board policy adopted before the Act requiring director confidentiality, loyalty to the purpose, honesty and integrity, ignored now by the directors who want to reach their constituency.  The community, most of whom know nothing about the Act, or other governance issues, just expect everything to run as smoothly and expertly as before under the developer control period.  RONR has no way to steer back into calm waters,  it seems, but thanks for your wise counsel. Let me know if there is any information you would like to have, that is not confidential, and I can supply..

Thanks ,, Mr. Kaput, afraid you are correct again.The sate law opens a 'Pandora's Box.' With unlimited confidentiality elements for private purposes (journalists) could have a disgruntled member 'wired', or even with video recorder, or voice recorder transcribe  an entire meting enabling a newspaper to carry a story damaging the HOA's

reputation nationwide. Confidentiality now exists partially to the extent meetings are  sparsely attended (less than 1% of lot owners)

and the HOA's web site's posted minutes are cursory, very few visit to actually read them.

Question:  RONR says board minutes are only accessible to the board, unless the board grants permission to "...a member...to inspect them...."

 and the Act requiring meetings to be open does not address minutes of board meetings, only member meetings, could there be a path

through by having a designated single member attending a meeting can only inspect the minutes at the next meeting after they were  approved?

There is a big difference between inspecting and having a copy. No extracts or notes are permitted in only an "inspection permission" I would argue.

Further to this, Gary, the minutes referred to in the nonprofit association act are the minutes of members 

meetings, not directors. These are not mentioned. The Community Association Act references the

nonprofit act on minutes, which are only the minutes member meetings, like the annual meeting.

Thanks again.

Yes, Gay - I meant RONR (eleventh edition, I believe. Sorry!

Mr Kapur: You are correct. The Community Association Act, requiring open meetings of the board

is silent about the minutes being published. There is no board resolution that authorizes the minutes

being posted on the HOA's web site. Thank you for the RONA reference, it definitely applies since

the by-laws specifically reference RonA as authority. 

The latter seems preferable (board adopt clarifications of its own rules) consistent with state laws.

Thanks

State legislature adopted a community association act that required by-laws of nonprofit HOA's to be amended so lot owners 

could attend open director meetings. Closed sessions are allowed by the Act for various sensitive matters, e.g, legal

advice protected by attorney/client privilege, bid negotiations with suppliers,, etc. The board had previously adopted a Director Duties Policy.

This stated the obligations of directors typically associated with an executive board, e.g. confidentiality of meetings, loyalty to

the purpose, no conflicts, good faith honest  performance, etc. Cursory Board minutes are posted on the HOA's web site as

 meeting are attended by only a few lot owners (less than 1%).So one member (not the secretary) has elected 

to discuss meetings on an HOA social network that reaches a far greater number,but still less than half of the total lot owners

entitled to vote at annual meeting. Some are arguing this breaches (1) confidentiality obligations as a director,,(2) that RONR 

(referenced as controlling in the by-laws) does not contemplate directors meetings being discussed, and (3) that the nonprofit

association act that is referenced by Act, only allows member meeting minutes upon written demand, not board minutes at all;

hence the board should stop posting minutes and censure the director that is conducting polls and starting arguments on- line

with lot owners who never saw the minutes or attended the meeting..