Columnist

Non-owners often try to vote or sway board elections

 
 
Published: 3/26/2010 12:01 AM

One of those fundamental rights that everyone talks about often gets short shrift in dealing with association elections and referendums. Sometimes, it is just difficult to even get people to participate, so some managers and/or board members do not bother with the due diligence necessary to make sure the "voting members" are legally qualified.

In a homeowner's association, the bylaws establish who may vote. Usually, it is a homeowner and some or all of the requirements mirror condominium qualifications, but it can never be taken wholly for granted. I have seen HOAs and co-ops allow for outside directors who are not owners, or voting trusts.

Condominiums have specific statutory references so in many instances controversies surrounding voting problems concern ownership. In an association where elections are contested (yes, there are plenty), legal minds are put to the test in interpreting the law as it applies to the facts.

To begin with, Section 18 of the Illinois Condominium Property Act (765 ILCS 605/18) provides that, "The bylaws shall provide for at least the following: (a) (1) The election from among the unit owners of a board of managers-" This simple introductory phrase means that you must be a unit owner in order to vote to elect the board. That does not mean if you are married to the owner, and your name is not on the title, you still get to vote. You must be an owner, which means your name must be on the title reflecting an ownership interest.

Section 2 of the act defines ownership as "aggregate fee simple absolute ownership of a unit." (Exception - when the property is held in an Illinois Land Trust or a living trust, then verification such as a copy with a letter of direction from the trustee should suffice as proof of ownership, so long as it can be verified). When a corporation or partnership owns the unit, then the ownership can designate an individual to vote on behalf of the entity, but this should be verified in writing.

When there are multiple owners, Section 18 (b) (8) of the act states that if only one of the multiple owners of a unit attends a meeting, he/she is entitled to vote all the votes allocated to that unit. If more than one of the unit owners is in attendance, then they must elect one representative to cast the votes.

Where proxies are permitted, again, only the record title owner may cast or assign the proxy and when there are multiple owners, they must elect the "voting member" to represent their interests.

The next issue to be addressed is the verification of ownership interest. Since at most elections in larger properties it is impossible to know all the owners, then is it necessary to require proof of ownership?

In most instances, elections are only mildly contested and often there are not even enough candidates to fill all the board vacancies, so, there is no likelihood that someone is going to challenge the credentials or demand proof of ownership in order to vote. As previously mentioned, some people believe that if they put all their assets in their spouse's name, or marry an owner and live with them, they can vote and/or run for the board. As it turns out this violates the statute and those individuals are not legally qualified. Ownership means just that, and marriage is not an incidence of ownership.

As far as running for the board is concerned, Section 18 (a) (1) of the act, as previously referenced, the election is held from among the unit owners, and no one else.

In associations that have nominating committees or screen board candidates, qualification by ownership may be raised and producing powers of attorney or copies of unrecorded deeds is not sufficient proof. When someone's interest is called into question, Illinois is a "recording" state, which means this interest must be recorded before it is valid.

Giving your spouse a quitclaim deed of 1 percent interest the day of the election is not sufficient, nor is it acting in good faith. In fact, if the attendance at a meeting of the owners is limited to just owners, which a board has the right to declare, then the erstwhile spouse or significant other, or tenant or child can be excluded from the meeting. I have seen many instances over the years where disruptive attendees have turned out not to be owners, and had to be barred from attending meetings.

In addition to electing the board, association owners often have other instances where they are asked to vote; amendments, budget excesses, special assessments, street dedication, etc. These votes are also exclusively limited to owners as well. In order to avoid confusion, where there are joint owners like a husband and wife, they do not get to vote twice and one has to be designated the voting member, just like when there are multiple partners.

Although it does not involve voting per se, the one instance where an owner can virtually designate anyone to act on his/her behalf is to examine the association records as prescribed in Section 19 of the act. Therein it says the owner has a right of inspection, "in person or by agent."

Lastly, in a time where mortgage money to purchase a unit is hard to come by, some owners have resorted to self-financing a sale through the use of articles of agreement, or contract sale. Presuming it is a valid arms-length transaction, it is presumed that the contract purchaser has the right to vote "unless the seller expressly retains in writing any or all such rights." The association is entitled to satisfactory evidence of the installment contract to determine who retains the right to vote (as well as who is living on the property).

For associations that seem to have problems with verifying ownership and people acting as though they own the place (when they don't), the board could adopt a rule under its express rule-making authority and establish procedures for voting agreements. Every owner would have to attest under oath and penalty of law, that they are the owner and submit proof. (A copy of their deed or title report - tax bills do not always go to the owner.) This information would be kept on file and every new owner would be required to execute this document before they participate in an election or referendum, and they could be required to produce proof, such as a driver's license to prove who they say they are.

Legal counsel can prepare a proper voting agreement so a board or the manger will never again have to wrestle with verification issues. In a close election, a non-owner attendee who is wrongfully permitted to vote can negatively impact the outcome of an election.

• Jordan Shifrin is an attorney with Kovitz Shifrin Nesbit in Buffalo Grove. Send questions for the column to him at jshifrin@ksnlaw.com. This column is not a substitute for consultation with legal counsel. Past columns can be read at www.ksnlaw.com.