No room on bal­lot for a straw poll

Boards should ask for com­ment at reg­u­lar meet­ings if they want to know how home­own­ers feel.

Los Angeles Times - - REAL ESTATE - By Donie Van­itzian An­swer: Cor­re­spon­dence of this na­ture needs to be at the di­rec­tion of the board only and in ac­cor­dance with

Ques­tion: Own­ers are get­ting some strange cor­re­spon­dence from our man­age­ment com­pany that ap­pears prompted by some home­own­ers rent­ing out their units on the Airbnb plat­form. One let­ter, for ex­am­ple, claimed that “rental units lower our prop­erty val­ues.”

The com­pany also sent “straw polls” ask­ing own­ers to “vote” on these is­sues and more without of­fi­cial no­tice, meet­ings or bal­lots. One such poll re­quested an “in­for­mal” vote on a pos­si­ble amend­ment to our govern­ing doc­u­ments to limit the num­ber of ren­tals al­lowed at any one time and to limit any kind of short­term leases. An­other polled us on whether to re­quire new own­ers to live in their unit for a min­i­mum of one year be­fore it can be rented out to third par­ties. The idea was to dis­cour­age in­vestors who might rent out their units on Airbnb.

Is all of this cor­re­spon­dence from the man­age­ment com­pany nec­es­sary? What is the le­gal sig­nif­i­cance of “in­for­mal” and “straw polls”? the Com­mon In­ter­est De­vel­op­ment Act. Nowhere in that law does it state “straw polls” or “in­for­mal bal­lot­ing” is an ac­cept­able op­er­at­ing pro­ce­dure, though it doesn’t ex­plic­itly ban them.

From time to time, a board of di­rec­tors may want to know how the own­ers feel about var­i­ous is­sues. That can be han­dled through reg­u­larly no­ticed board meet­ings that ask for com­ment on an agenda item. The only mean­ing­ful way that ti­tle­hold­ers can par­tic­i­pate in the op­er­a­tion of the as­so­ci­a­tion is to ex­er­cise their vote on a le­git­i­mate bal­lot.

Flood­ing own­ers with “feel­ers” and “straw polls” ask­ing for votes could have very se­ri­ous con­se­quences for own­ers. There is no such thing as an “in­for­mal vote,” most es­pe­cially on govern­ing doc­u­ment amend­ments. In­for­mal or not, once voted, there’s no law pro­hibit­ing the board from us­ing those “poll” re­sults at a later date to jus­tify its ac­tions as sanc­tioned by the ti­tle­hold­ers.

Ir­re­spec­tive of what the board calls it, own­ers should be cau­tioned to forgo vot­ing on any “straw poll,” “pre­bal­lot­ing,” “sam­ple vote” or “in­for­mal bal­lot­ing.”

Too many of these types of polls even­tu­ally cause vot­ers to be sus­pi­cious about the board’s ac­tions. They also tend to de­sen­si­tize own­ers of the im­por­tance of vot­ing by mak­ing them less likely to pay close at­ten­tion to le­git­i­mate bal­lots.

Boards also risk look­ing de­ceit­ful if they fail to fore­warn ti­tle­hold­ers that, once voted, there is no guar­an­tee the re­sults of these seem­ingly in­nocu­ous “polls” are not barred from use at a later date.

The cor­re­spon­dence from man­age­ment tak­ing a po­si­tion on a par­tic­u­lar is­sue is even more trou­bling. Any cor­re­spon­dence from man­age­ment, or the board, is likely to be per­ceived by ti­tle­hold­ers as an “of­fi­cial” as­so­ci­a­tion com­mu­ni­ca­tion. When a man­age­ment com­pany pro­motes one view­point on an is­sue that has not yet been put to a vote, it is us­ing as­so­ci­a­tion re­sources to in­flu­ence an elec­tion — and com­pletely over­step­ping its au­thor­ity.

These are in­ap­pro­pri­ate “polls.” Your board should elim­i­nate any un­nec­es­sary cor­re­spon­dence with the own­ers and cer­tainly shouldn’t pay a man­age­ment com­pany for pad­ding their billing by churn­ing out such non­sense. If the own­ers are asked to vote on an amend­ment to the govern­ing doc­u­ments, then facts — not opin­ions — must be pro­vided along with a doc­u­ment in­di­cat­ing the af­fected amend­ments.

As for the spe­cific is­sue of ren­tals, the Com­mon In­ter­est De­vel­op­ment Act im­poses no le­gal limit as to the num­ber of rental units that any de­vel­op­ment should have, though a de­vel­op­ment’s CC&Rs could con­ceiv­ably limit the num­ber of ren­tals al­lowed.

Fur­ther, no mat­ter the spec­u­la­tion, there cer­tainly is no legally ver­i­fi­able proof that rental units lower prop­erty val­ues.

Zachary Levine, a part­ner at Wolk & Levine, a busi­ness and in­tel­lec­tual prop­erty law firm, co-wrote this col­umn. Van­itzian is an ar­bi­tra­tor and me­di­a­tor. Send ques­tions to Donie Van­itzian, JD, P.O. Box 10490, Ma­rina del Rey, CA 90295 or noexit@mind­spring.com.

John MacDougall AFP/Getty Images

COR­RE­SPON­DENCE from an as­so­ci­a­tion’s man­age­ment com­pany ap­pears prompted by some home­own­ers who are rent­ing out their units on the Airbnb plat­form. Above, the short-term rental com­pany’s web­site.

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