Opinion ID: 3162344
Heading Depth: 2
Heading Rank: 2

Heading: The SAR

Text: The plaintiffs also claim that the SAR is invalid. They argue that the allocation of voting interests in the SAR violates the act, that the SAR adopts the same structure from the original declaration and the FAR we deemed illegal in the America litigation and Sisto, and that the SAR was not adopted by unanimous consent as required by the act. Similarly, Harbor Houses argues that the SAR is invalid in light of our decision in Sisto. We disagree with each assertion and conclude that the SAR is valid. The plaintiffs’ first point of contention with the SAR is that it “illegally allocates the voting interest in the GIS Condominium” among the 154 individual condominium unit owners. -11- According to plaintiffs, this is in contravention of § 34-36.1-1.03(2) of the act, which defines “allocated interests” as an “undivided interest in the common elements, the common expense liability, and votes in the association allocated to each unit.” The plaintiffs read the act as prohibitive of dividing the sub-condominium’s voting interest among its individual unit owners. However, the SAR employs precisely the type of voting scheme we called for in America I. In that case, we invalidated a previous voting structure that allowed only a board of representatives of the three sub-condominium units to vote on amendments to the declaration, stating that “[u]nder the act, unit owners are given the right to vote upon any amendments to special declarant rights   .” America I, 844 A.2d at 130. Since we found it to be clear under the act “that the owner of a sub-condominium unit constitutes a unit owner[,]” id., it necessarily follows that these owners are afforded a vote. Any voting scheme shutting them out would “deprive[] the individual unit owners of their statutory right to give consent.” Id. The voting scheme in the SAR is directly responsive to our holding in the America litigation and, thus, is valid. Similarly, plaintiffs contend that unanimous consent from the unit owners was required to adopt the SAR because it altered the allocation of interest of the common elements. Section 3436.1-2.17(d) requires unanimous consent from the unit owners as to any amendment that, inter alia, “change[s]    the allocated interests of a unit.” However, as the hearing justice pointed out, the interest of the unit owners was merely adjusted to include the common elements using the same formula set out in the original and FAR declarations. The unit owners each got the same percentage share as they did under the original and FAR declarations; there was just more to apportion among them. Thus, there was no change to the allocated interests requiring unanimous consent of the unit owners, and the amendment passed with votes well in excess of the 67 percent required by the act. See § 34-36.1-2.17(a). -12- Next, plaintiffs argue that the SAR fails for lack of units following our decisions in America I and America II, because in those cases we stated that the undeveloped north, south, and west air space units were not valid units. Specifically, plaintiffs contend that the condominium fails under § 34-36.1-2.01(b) of the act, which requires that units be “substantially completed” before a condominium declaration is filed. To be sure, we did say that the undeveloped north, south, and west air space units were not units, thus leading to our eventual conclusion that they were part of the common elements. America II, 870 A.2d at 442. However, America, Cappella, and Harbor Houses were completed units at the time the SAR was filed, so plaintiffs’ argument as to this point fails as well. Harbor Houses makes a similar argument in support of its cross-claim, namely that our holding in Sisto provides that the SAR does not describe valid units and boundaries as required by the act. It cites § 34-36.1-2.05(a)(5) of the act, which provides that a condominium declaration must contain “[a] description of the boundaries of each unit created by the declaration[.]” In essence, Harbor Houses wants us to declare that the GIS Condominium is essentially a homeowner’s association that manages the property. However, Harbor Houses’ view of our holding in Sisto misses the mark. Indeed, in Sisto, 68 A.3d at 613, we did say that the master declaration “does not appear to include a specific definition of a unit[.]” But, we went on to say that “§ 1.18 [of the declaration] provides that a [GIS Condominium] unit refers to each of the three sub-condominiums—the America, Capella, and Harbor Houses Condominiums” and that “§ 1.27 [of the declaration] also states that a ‘unit owner’ is the ‘owner of a [r]esidence [u]nit’—meaning the owner of a unit contained within one of the three sub-condominiums.” Sisto, 68 A.3d at 613. While the declaration does not specifically define a unit, it identifies a unit both by referencing the sub-condominiums and the boundaries of units within the sub- -13- condominiums. Our statement in Sisto that the master declaration did not include a specific definition of a unit by no means purported to declare that the declaration did not contain a description of the boundaries of each unit in contravention of the act. Harbor Houses’ opportunistic cross-claim is without merit. We note that the bulk of the SAR is identical to the original and FAR declarations, and the only changes—which plaintiffs and Harbor Houses now strategically attack to get another proverbial bite at the apple—adapt to our holdings in America I and America II. In sum, we discern no issue with the validity of the SAR.