Question: I've owned the same town home for more than 29 years and never miss attending the association's annual meeting.
At the last one, I was surprised to hear that several major amendments to our bylaws and other rules had been made without the knowledge of many of the owners. The changes were downplayed, announced in a nonchalant monotone, and then the board immediately tried to switch the subject.
Many owners were enraged and demanded explanations because we had never received a notice or opportunity to vote on the items mentioned. Our flustered secretary began flipping through several pages of notes and announced, "I can't find it. I guess I forgot to put that in the minutes." An owner yelled out, "Because you made it up."
In response to the intense anger of the owners, the president confessed that the board's attorney had advised the directors that they could pass anything they wanted by obtaining a majority vote, and that once they got it, they didn't need votes from the other owners. The board of directors could then simply announce, "The majority of owners have spoken."
Nearly all owners "of color" or "of ethnic background" were omitted from these secret majority-voting escapades. Prior to this, I had no idea our boards used such underhanded tactics. Is it true that once a board obtains a majority vote, it needn't obtain votes from remaining homeowners who had no idea such a vote was being taken?
Answer: Nothing in the Davis-Stirling Act or the Corporations Code prevents the form of discrimination you describe.
If your governing documents set forth a procedure for obtaining certain votes, however, then that procedure must be followed. Failure to do so makes the resulting action void. There is nothing to prevent you from challenging these actions even if your governing documents do not have a procedure for obtaining such votes, although such a challenge usually means a lawsuit.
In other cases, such as a vote at an annual meeting where no advance notice of the vote may be required, a majority vote is sufficient to carry the issue if the vote takes place at that meeting or if proxies indicate such a vote is to take place. Many owners blindly approve board requests without a clear understanding of what is being voted on or signed for or the ramifications of the actions about to occur.
Directors who commit or partake in discriminatory acts against owners may not be shielded from liability despite what the attorney says. Should any discrimination be proven or should a pattern of discrimination emerge, the board that applied that policy and likely the entire association may be subject to liability.
Even the appearance of discrimination could make directors individually liable, so it is important that the board take active steps to articulate safeguards of homeowner rights to balance the injustice that appears to be occurring within your association. Contact other homeowners who were not given a chance to vote on the topic at hand and confirm that notice was not received, then formally challenge the board about the change in bylaws.
If the disenfranchised owners were "of color" or "of ethnic backgrounds," they could consider filing a lawsuit for discrimination and violation of their civil rights. Contact an attorney specializing in such claims or in class actions for this purpose.
If the association's attorney aided and abetted the board by advising that "it's all legal" and directors "only needed the majority" to obtain their desired result, consider filing a complaint against the attorney with the state bar and bringing a lawsuit naming both board and attorney. If, as a last resort, a lawsuit is filed and is successful, not only would it stop the practice, but it could also force the association to pay attorneys' fees in addition to any damages and costs.
It is an unfortunate situation when directors feel they must resort to chicanery, and it's worse still if that association board actually discriminates against its minority owners.
Send questions to P.O. Box 11843, Marina del Rey, CA 90295 or e-mail noexit@mind spring.com.