Opinion ID: 1988985
Heading Depth: 1
Heading Rank: 2

Heading: Because the Voting Procedures Used to Adopt the 1994 Amendments to the GIS Condominium Declaration Were Valid, IDC Lawfully Extended Its Development Rights to December 31, 2015

Text: In 1994, representatives of the five master units comprising the GIS condominium association attended GIS master association meetings at which they voted on and unanimously approved, inter alia, the Third, Fourth, and Fifth Amendments to the GIS condominium declaration. Three of these units were multi-unit condominiums governed by executive boards of the plaintiff condominium associations. Each of the plaintiff condominium associations, through its board representatives, received notice of the GIS master association meetings and voted in favor of the proposed amendments. Nevertheless, the majority holds that these amendments were invalid and void ab initio because the owners of individual sub-condominium units in the America, Capella, and Harbor Houses condominiums were not given any direct notice of or opportunity to vote on such amendments. Consequently, says the majority, IDC never lawfully extended its development rights for the GIS condominium beyond December 31, 1994, the date when they were scheduled to expire under the First Amended and Restated Declaration of Condominium, GIS. The majority's rationale for this holding is that each of the more than 150 individual owners of the condominium units located in the America, Capella, and Harbor House condominiums (the so-called sub-condominium owners) failed to receive individual notice or the individual opportunity to cast a direct vote on whether to adopt the challenged amendments to the GIS condominium declaration. But given the undisputable fact that none of these individual owners of sub-condominium units owned or controlled any of the GIS master units, and given that they were not entitled to elect the board of the GIS master association when those votes occurred  much less to vote on amendments to a different condominium declaration from the one in which they owned one or more units  this was scarcely remarkable, let alone an actionable violation of the act. What the majority chooses to ignore in its analysis of the votes on the 1994 amendments to the GIS condominium declaration is that the GIS condominium was organized as a master association, as § 34-36.1-2.20 of the act expressly authorized. As such, its five master condominium units composed a master condominium association whose representatives elected a master condominium executive board and held master association meetings at which, inter alia, they voted on and adopted amendments to the GIS condominium declaration. Thus, pursuant to § 34-36.1-2.20(d), [t]he rights and responsibilities of unit owners with respect to the unit owners' association set forth in §§ 34-36.1-3.03 [executive board members], 34-36.1-3.08-34-36.1-3.10 [meetings, quorums, and voting] and 34-36.1-3.12 [conveyance or encumbrance of common elements] apply in the conduct of the affairs of a master association only to those persons who elect the board of a master association, whether or not those persons are otherwise unit owners within the meaning of this [act ]. (Emphasis added.) In other words, in master associations such as the one created for the GIS condominium, the rights of notice, voting, and other rights enumerated in the [a]ct are available only to the persons who actually elect the [master association] board. Commissioners' Comment 5 to § 34-36.1-2.20(d) of the act. With respect to the GIS master association, those persons were IDC, the owner of two of the GIS condominium master units, and, in the case of the GIS master units consisting of the America, Capella, and Harbor House condominiums, a representative of each condominium association's executive board, with each master unit's representative being entitled to cast one undivided vote, weighted according to the size of the land area that each master unit encompassed. Such a representative voting arrangement for the GIS master condominium association and GIS master units is entirely consistent with and permitted by the act  especially given the fact that three of the GIS master units were themselves condominiums owned by multiple individual owners of units in these condominiums. Thus, § 34-36.1-3.10(a), entitled Voting, provides: If only one of the multiple owners of a unit is present at a meeting of the [condominium] association, that person is entitled to cast all the votes allocated to that unit. If more than one of the multiple owners are present, the votes allocated to that unit may be cast only in accordance with the agreement of a majority in interest of the multiple owners, unless the declaration expressly provides otherwise.  (Emphases added.) Several points should be noted with respect to this provision. First, it expressly acknowledges the fact that voting does not have to proceed on a one-vote-per-unit basis, which the majority deems to be required. Rather, it contemplates that the condominium declaration may provide for the manner in which votes [are] allocated to that unit. Second, the act speaks to who is entitled to cast the votes allocated to multi-owner units in a given condominium, such as the three master units in the GIS condominium, (namely, the America, Capella, and Harbor Houses condominiums). Multiple sub-condominium unit owners owned these three master units of the GIS condominium when the votes in question were cast in 1994 at the GIS master association meetings in favor of the various amendments to the GIS declaration. Most significantly, given that more than one of the multiple unit owners of the America, Capella, and Harbor Houses master units were present at the challenged meetings of the GIS condominium association, the votes allocated to that unit [by the declaration] may be cast only in accordance with the agreement of a majority in interest of the multiple owners, unless the declaration expressly provides otherwise.  Section 34-36.1-3.10(a). (Emphasis added.) Here, the declaration expressly provided otherwise, stating that each master unit in the GIS condominium would be entitled to cast one undivided vote weighted according to the land area covered by each unit. Thus, far from evad[ing] the limitations or prohibitions of [the act], which § 34-36.1-1.04 forbids declarants from doing, Globe Manufacturing, the original declarant of the GIS condominium declaration, was entitled by the act to prescribe a representative voting procedure for multiple unit owners of a single master unit in the GIS master condominium association. Indeed, the Commissioners' Comments to § 34-36.1-1.04 specifically describe the voting requirements in § 34-36.1-2.20 (master associations) as one of the provisions in the act that can be varied by the declaration. Even § 34-36.1-2.17(d), providing that amendments to declarations that enlarge special declarant rights require the unanimous consent of the unit owners, contains an exception allowing contrary voting arrangements to the extent expressly permitted or required by other provisions of this [act]. Section 34-36.1-2.20, pertaining to the voting requirements for master associations, is one such provision. For these reasons, the individual sub-unit owners of the plaintiff condominium associations were not entitled to cast individual votes on amendments to the GIS declaration. What the majority fails to acknowledge is that, even though [a] variety of sections [of the act] enumerated in subsection [§ 34-36.1-2.20](d) provide certain rights and powers to unit owners in their dealings with their [condominium] association[,][ i ] n the affairs of the master association, however, it would be incongruous for the unit owners to maintain those same rights if those unit owners were not in fact electing the master board. Thus, for example, the question of election of directors, meetings, notice of meetings, quorums, and other matters enumerated in those sections would have little meaning if those sections were read literally when applied to a master board which was not elected by all members of the condominiums subject to the master board. For that reason, the rights of notice, voting, and other rights enumerated in the [a]ct are available only to the persons who actually elect the [master] board.  Commissioners' Comment 5 to § 34-36.1-2.20(d). (Emphases added.) Apparently finding the above-described incongruity no bar to extending such rights to other persons, the majority proceeds to accord voting rights in master associations such as GIS not just to the persons who elect the GIS master board, but also to each and every sub-condominium unit owner on Goat Island. In sum, then, the majority's opinion pays no heed to the fact that, under the act, special voting rules apply to master condominium associations such as the one created for the GIS condominium. Sinking into the quicksand of voting provisions that are simply inapplicable under the act to master associations, the majority fails to acknowledge the existence of these master-association provisions and their related commentary, let alone the dispositive fact that the GIS condominium was organized as a master association. Instead, it proceeds to affirm the Superior Court's invalidation of votes that were taken in complete accord with the act and with its voting provisions dealing with master condominium associations such as this one. In the end, only by ignoring the fact that, when the votes in question occurred in 1994, the GIS condominium was in fact organized as a master condominium association, comprising five different master units (three existing condominiums owned by multiple owners of individual units in these condominiums and two undeveloped parcels owned by IDC), can the majority conclude that the votes in question were void ab initio  even though the owners of individual units in different condominiums from the GIS condominium were not entitled by law to vote on these amendments to the GIS master declaration and even though the boards of the plaintiff associations cast their votes in favor of the amendments. [25] The trouble I have with the majority's holding becomes clear with just a moment's reflection upon the factual circumstances of this case:  Under the provisions of the act and the relevant condominium documents, the owners of sub-condominium units within the America, Capella, and Harbor Houses condominiums never were entitled to cast individual votes on matters pertaining to the GIS condominium and its master association. Therefore, by what rationale or authority can they possibly be entitled to individual votes at master association meetings in connection with amendments to the declaration for the GIS condominium?  The GIS condominium declaration did not create the units in the America, Capella, and Harbor Houses condominiums; rather, the declarations for plaintiffs' separate condominium associations created them.  Neither the act nor any condominium declaration ever afforded the sub-condominium unit owners any individual voting rights with respect to the GIS condominium, the GIS master condominium association, or the GIS condominium declaration. On the contrary, the relevant condominium documents and applicable provisions of the act always informed plaintiffs and any sub-condominium unit owners that they were not entitled to cast individual votes on GIS condominium and master association matters.  Sub-condominium unit owners paid no condominium fees with respect to any such privileges that belonged to the persons who were entitled to vote on GIS master association matters. If the majority were correct in its conclusion that the 1994 votes to amend the GIS declaration were void ab initio because more than 150 sub-condominium unit owners were entitled to a direct individual vote thereon, then every vote taken by the GIS master condominium association for the last fourteen years  including every election that has been conducted, every budget that has been approved, and every amendment to the GIS declaration from day one  is also void ab initio. Ironically, because (according to the majority) the one-year statute of limitations does not apply to lawsuits asserting that amendments to condominium declarations were void ab initio, this means that only the original declaration for the GIS condominium  providing for the declarant's development rights to expire in 2037  remains intact, thereby mooting plaintiffs' efforts to stymie IDC from developing the property it owns on Goat Island. In sum, I would hold that IDC duly extended its development rights to the year 2015 with respect to the master units it owns in the GIS condominium because the 1994 amendments that extended those rights received the unanimous consent of the representatives of the GIS master unit owners, including the plaintiffs who were among those persons who elect the board of [the GIS] master association. Section 34-36.1-2.20(d). Thus, I would reverse the Superior Court judgment finding that their votes were void ab initio.