Voting and Democracy at Community Meetings

At our recent Community meeting we had a vote on a new Vice President.The current President is an employee of the Promoter/Developer and does not live on the development.

The overall majority at the meeting voted for candidate X who lives on the development whilst the President nominated and voted for her assistant,an employees who does not live on the development although,in fairness, she is very helpful and capable. The majority of the apartments are unsold and the President said that because of this the Promoter/Developer could exercise a vote for each of the empty apartments thus negating all those at the meeting.

This seemed to go against natural justice.....but I seem also to remember one of Maria's legal podcasts saying that the Promoter/Developer in these circumstances could only exercise one vote at the meeting.

Can anyone share any experiences on this?

The Promoter/Developer should only have one vote (assuming they are up to date with their Community Fees) no matter how many properties they still have.

The co-efficients of each property can then be added together though which could still give them a greater vote.

You say that the President & the newly voted Vice President are employees of the Promoter but not resident on the development.

You do not have to be resident to hold either position but you do have to be an owner of a property on the development.

Noreen

Noreen,

Thanks for taking the time to write.

As a layman I need some clarification please on your response as it does on the face of it seem contradictory.

That is, you state the Promoter/Developer only has one vote regardless of how many (unsold) properties he holds,but then you say that taking account of the co-efficient could lead to him having a greater vote.

I am conscious of the fact that the Promoter/Developer has to pay community fees for the unsold properties.

On the secondary issue,you say that the President and Vice President should be an owner of a property on the development which seems logical.However if the Promoter/Developer still owns properties (the majority on the development still remaining unsold )are they not able to nominate people to act for them as President and Vice President of the community.

Danny

From the Horizontal Property Act

"are they (the developer) not able to nominate people to act for them as President and Vice President of the community"

My understanding is that the president and VP must be owners. The "developer", i.e. a company, is an owner in this case, and can of course send anyone they choose to represent them at meetings, but only legal representatives of the company surely can actually stand as president? I don't think this means any employee, but Maria or someone else better qualified than me will have to confirm this point.

 at our last community meeting, we were about to vote on increasing the community fees to cover the cost of painting the complex.The representative from the promoter/developer stated that as they had the majority of unsold apartments and were up to date with their community fees, there was no point in voting. I am not sure which way the vote would have gone, but with so many properties unsold it all went the developers way.

Was the developer correct in this case? If not what is the procedure to correct the situation?

Many thanks.

Tech

This is becoming intriguing.We,at our community meeting were in an almost similar predicament to Tech which we found frustrating and instinctively unfair.

As always debate helps to crystalise the key issues.

From what I now think,arguably the Developer who owns a majority of the apartments (because they are unsold) has the right to exercise votes on the basis of the quotas or community fees paid for their units,thus entitling him to exercise an aggregate or "block" vote at meetings.

I now believe (thanks to information received from an eos contributor) that the HP Act does talk about majorities of quotas and units, not just owners.From this standpoint, it could be the weight of the (aggregate or "block" of)quotas that determine the outcome at meetings not just the number of those present.

Secondly, as Roberto suggests it would seem that the Developer if an owner (which he surely is if there are unsold apartments/properties for which he is paying community fees) is entitled to become President or Vice President.The confusion comes in because the Developer is not a "he" ,that is an individual, but a company or corporate body.It would seem logical in these circumstances for the Developer therefore to nominate someone to act for him as owner and that could be an employee. Remember,the President or VP does not have to live there,they only have to be an owner or arguably an owner's representative.                          It seems to me the flaw in this argument, is that it could lead to any individual owner not just the Developer being allowed to nominate a President/VP from outside the community which seems to run against the whole ethos of community representation.

Any further thoughts????

The point is that a company (in this case the developer) can only be legally represented by certain individuals. I don't think the janitor (for example) is usually considered a legal representative. I'm not certain on this, my knowledge of company law, especially in Spain, is virtually non-existent, but just as a community has an appointed legal representative (the president) I believe a company does too (probably the director, chief executive or whatever). So as an owner in our community and having just been appointed (yet again) as president, I cannot (unfortunately) nominate my cat to act on my behalf any more than the "developer" can nominate his janitor.

None of this makes any difference to the situation where a developer who still owns the majority of the properties, which also constitute a majority of the assessment quotas, can control any vote. I'm not 100% certain on this point either, and nobody has yet convinced me one way or the other. I fully understand the feelings of those who believe it is not fair that the developer can be allowed this kind of control - but on the other hand, if I owned more than half the apartments in our community, and contributed more than half the total community fees, I absolutely would expect to have everything my way! As it is, owning considerably less than 50% I nevertheless find myself contributing, if not financially, certainly in terms of time and effort, a helluva lot more than 50% and I don't mind telling you, it pi55es me off! Why should anybody who is not prepared to do their fair share of the work involved in running a community, be allowed to have a say in how the place is run? Now that's not fair.

Every OWNER has just one vote. Just owners updated in their payment of community fees can vote.

This much is clear, Maria, but are all votes equal? This is the ambiguous point. If the total sum of an owner's assessment quotas are counted, then even if the devloper only has one vote, his vote may still count for more than 50% of the total.

 Majorities and thirds need the back of same representation in shares.  But an owner having the 80% of the share will never be able to get its individual proposals or wishes as he will always require the quorum

Gracias Maria - tan claro como el chocolate!!!  

I think what Maria is saying, is that you need the majority of the assessment quotas as well as the majority number of votes. So, If the developer owns 51 out of 100 apartments, he has (perhaps) 51% of the quota, but only 1% of the total number of votes.

Maria,

I am afraid I am confused!

I would love the position to be as simple as "Every Owner has one vote."To the layman that means that if there are 20 "Owners" at a meeting and there is a vote then you count the hands. In our case it was 18 hands for candidate x and 2 hands for candidate Y. Yet candidate Y was declared the winner by the President of the Community because the Developer's nominated person voted for candidate Y and their quotas added up to more than ours.A lawyer for the Developer confirmed that this was in order.

I understand that the Horizontal Property Act talks about a number of variables including units,community fees and quotas as well as owners.

In our case,of the 250 apartments or so in the Community, the Developer still owns 150 apartments and has paid community charges for them.One hundred apartments are sold.

At the Community meeting twenty owners turned up to the meeting including the Developer's representative.

In these circumstances have the Devleoper/President of the Community acted legally in accordance with the HPA?

 I`m glad that I am not the only confused person.

In my mind there is even more confusion about voting when the meeting starts on the first or second call.

What I need is an 'idiots' guide on the process. Perhaps Maria could produce one as part of her legal guide series!!

 THe necessary backing of shares is for the decission to really be taken by real majorities.

Think of 20 owners of garages in a community meeting voting on something that affect apartments owners... it would not be real representation. That´s why the Horizontal Act requires votes first and then, it add an addittional reinforcement to the real representation of those votes by requesting that they really represent ownership majority quotas in the development.

Does this help to clarify? If not, please say and wil try to explain again. 

Summer decreases my levels of explanatory potential!!

Hi Maria,

I am sorry but your reply does not make it clearer to me at least.

You have now introduced "shares" and "real majorities" into the discussion.

In my example below, where the vote was 18:2, is it possible for the  2 votes to outweigh the 18 votes if the Developer (who was included in the 2) still had ownership of the majority of apartments?

Thanks

My understanding is that the absolute number of votes doesn't count.  Each property in the development has a participation quota expressed as a percentage based on its contribution to the costs of the community.  Community charges are based on this quota - you don't all pay the same amount. 

When votes are taken at the community meetings, you have to add up the participation quotas of those for and against.  In the case that you mention, if the developer controls more than 50% of the participation quota, he can do whatever he wants and there is nothing the rest of the owners can do to stop him.

There are two conditions though.  Only those present at a properly constituted meeting may vote their shares (quota) unless an absent member confirms in writing that someone may vote their quota.   And anyone who is not up to date with payments of community fees may attend the meeting and may speak but may not vote their quota.

However, you are not totally powerless.  A  unanimous vote is required when agreeing the adoption or modification of the rules laid down in the deed of constitution or in the articles of association; and certain agreements require the vote in favour of 60% of the participation quotas:
o Establishment or elimination of the lift, porter, porter's office, security or other common services of general interest, including when they imply the modification of the deed of constitution or the articles of association.
o The lease of common elements that have not been given a specific use in the building. In this case, should the agreement imply whatsoever damage to a homeowner, it must be approved by the said homeowner.

Jek,

I think you have crystalised the issue very well.

I agree with your analysis.

Thanks.

The requirement for a decision to be made on an agenda item , be it for a President, Vice President or the Gardener come to that, is actually a double majority which means:

1. A majority of the single votes cast by eligible owners. Multiple owners ( including the developer) have just one vote NOT one vote for each property.

2. A Co-efficient majority , ie 50.01% or more of the owners that are eligible and do vote.  Multiple owners co-efficients are all counted including the developers.

If those two elements are not fulfilled the vote is null and void and the resolution is NOT PASSED.

It is absolute nonsense that the developer has any kind of casting vote ....IT IS NOT TRUE:

The term of office of any President or any elected officer is one year after which they must seek re-election, if you wish to put up an opponent to the developers 'man' you are free to do so AND it can be on the day of the AGM if you wish. If the voting does not create the necessary 'double majority' as described above there will be NO elected President or Officers. Under that circumstance and in the absence of a mutual agreement between developer and private owners it is the job of a judge to 'appoint' a President or other officers for a period of one year.

Equally it is well documented that should the developer try to rule roughshod over a community Judges are very sympathetic to challenges in court... if you have the stamina to stay that particular course that is.

Don't be pushed around, if you want further info PM me as we have been through this nonsense ourselves and come through the other side with private owners in control of their own destiny.

Barry

This still makes no sense. If the developer still owns, say, 60 out of 100 apartments (assuming all apartments are the same and represent 1% each of the total) and the other 40 are owned by 40 individual owners: Where the devloper votes one way, and all the other owners vote the other way on a certain resolution, there will never be any result. The developer has one vote only, but a quota representing 60%, so he will always have the majority of the quota, but never a majority number of votes; the other owners will always have the majority number of votes (40:1) but never a majority of the quota (only 40%). Stale mate. For EVER!!