October 25, 2006
COMMON INTEREST OWNERSHIP ACT-VOTING REQUIREMENTS, PROXY VOTING, AND ADOPTION OF CIOA BY PRE CIOA CONDOMINIUMS
By: George Coppolo, Chief Attorney
Regarding the common interest ownership act (CIOA), you asked (1) for the voting requirements for various activities, (2) whether proxy voting is allowed or required, and (3) which condominiums have adopted CIOA in place of the old law that previously governed them.
The law generally requires a vote of at least 67% of the association voting interests in order to amend a declaration. It authorizes the declaration to mandate a higher amount for residential condominiums and a smaller amount if all the units are nonresidential. But there are numerous exceptions. For example, the law requires:
1. unanimous voter approval to create or increase special declarant rights or the number of units, or (with certain exceptions) to change unit boundaries;
2. at least 80% approval to establish use and occupancy restrictions;
3. only the consent of affected units to relocate boundaries between adjoining units (unless the board's executive committee objects), subdivide a unit, or reallocate limited common elements among certain units;
4. at least 80% to terminate a condominium development or to merge condominiums;
5. a majority to reject a proposed budget from the executive board;
6. two/thirds of those present to remove executive board members;
7. 20% (or any lower percentage the bylaws specify) to call a special association meeting; and
8. 80% to convey or mortgage portions of the common elements but unanimous approval of all unit owners concerning any limited common elements that apply to their units.
The law gives unit owners the right to vote by proxy at association meeting, and establishes certain rules that apply to proxy voting.
According to Matt Perlstein, a condominium law expert, there is no central registry or other central source that indicates which condominiums have adopted CIOA in place of the old law that previously governed them. Perlstein was aware of several which had done so including Winepaug Village in Norwalk, Tunxis Village in Farmington, Farmington Woods in Farmington, and River Run in New Hartford. He also indicated that he was aware of many condominiums that have opted into certain provisions of CIOA to deal with specific issues they were addressing instead of adopting all of CIOA. Finally Perlstein expressed the opinion that most pre CIOA condominiums probably have not adopted CIOA.
AMENDMENT OF DECLARATION
Generally, the declaration, including any surveys and plans, may be amended only by vote or agreement of unit owners of units to which at least 67% of the votes in the association are allocated, or any larger majority the declaration specifies. The declaration may specify a smaller number only if all of the units are restricted exclusively to nonresidential use (CGS § 47-236).
There are several exceptions to this rule.
Special Declarant Rights, Unit Numbers, Boundaries, and Allocated Interests
Except to the extent expressly permitted or required by other provisions of the law (which we have identified below), no amendment may create or increase special declarant rights, increase the number of units or change the boundaries of any unit or the allocated interests of a unit, in the absence of unanimous consent of the unit owners (GCG § 47-236(d)).
Use or Occupancy Restrictions
By vote or agreement of unit owners of units to which at least 80% of the votes in the association are allocated, or any larger percentage specified in the declaration, an amendment to the declaration may prohibit or materially restrict the permitted uses or occupancy of a unit or the number or other qualifications of persons who may occupy units. The amendment must provide reasonable protection for a use or occupancy permitted at the time the amendment was adopted (CGS § 47-236 (f)).
The time limits specified in the declaration pursuant CGS § 47-224(a)(8), within which reserved development rights must be exercised may be extended, the number of units may be increased, and new development rights or other special declarant rights may be created by amending the declaration if those entitled to cast at least 80% of the votes in the association, including 80% of the votes allocated to units not owned by the declarant, agree to that action (CGS § 47-236(g)).
Special Declarant Rights
Provisions in the declaration creating special declarant rights may not be amended without the declarant's consent (CGS § 47-236(h))
Consent of Security Interest Holders
If the law or the declaration requires the consent of a person holding a security interest in a unit as a condition to the effectiveness of any amendment to the declaration, that consent is deemed granted if the association does not receive written refusal to consent within 45 days after it delivers notice of the proposed amendment to the interest holder
or mails the notice to the holder by certified mail, return receipt requested. The association may rely on the last-recorded security interest of record in delivering or mailing notice to the holder of that interest.
Use of Units, Relocation of Boundaries, or the Extension or Creation of Development Rights
If the declaration of a common interest community, whether created before or after January 1, 1984, contains a provision requiring that amendments relating to the use of units, the relocation of boundaries between units and common elements, or the extension or creation of development rights may be adopted only by the vote or agreement of unit owners of units to which more than 80% of the votes in the association are allocated, such a proposed amendment deemed approved if either:
1. unit owners of units to which more than 80% of the votes in the association are allocated vote for or agree to the proposed amendment; no unit owner votes against the proposed amendment; and notice of the proposed amendment is delivered to the unit owners holding the votes in the association that have not voted or agreed to the proposed amendment and no written objection of the proposed amendment is received by the association within 30 days after the association delivers notice; or
2. unit owners of units to which more than 80% of the votes in the association are allocated vote for or agree to the proposed amendment but at least one unit owner objects to the proposed amendment and, pursuant to a proceeding the association brings to Superior Court against all objecting unit owners, the court finds that the objecting unit owner or owners do not have a unique minority interest, different in kind from the interests of the other unit owners, that the voting requirement of the declaration was intended to protect (CGS § 47-236(j)).
Relocation of Adjacent Unit Boundaries
Subject to the provisions of the declaration and any provisions of law, the boundaries between adjoining units may be relocated by an amendment to the declaration if the owners of the affected units apply. If the owners of the adjoining units have specified a reallocation between their units of their allocated interests, the application must state the proposed reallocations. Unless the executive board determines, within 30 days after receiving the application, that the reallocations are
unreasonable, the association must consent to the reallocation and prepare an amendment that identifies the units involved, states the reallocations, and indicates the association's consent (CGS § 47-231(a)).
Subject to the provisions of the declaration and other provisions of law, boundaries between units and common elements may be relocated to incorporate common elements within a unit by amending the declaration in response to a request from the affected unit owners. Unless the declaration provides otherwise, the amendment may be approved only if those entitled to cast at least 67% of the votes in the association, including 67% of the votes allocated to units not owned by the declarant, agree to the action. The amendment may describe any fees or charges payable by the owner of the affected unit in connection with the boundary relocation and the fees and charges are assets of the association (CGS 47-231(b)).
Subdivision of Units
If the declaration expressly allows it, a unit may be subdivided into two or more units. Subject to the provisions of the declaration and any provisions of law, on application of a unit owner to subdivide a unit, the association must prepare, execute, and record an amendment to the declaration, subdividing that unit (CGS § 47-232).
The amendment to the declaration must (1) be executed by the owner of the unit to be subdivided, (2) assign an identifying number to each unit created, and (3) reallocate the allocated interests formerly allocated to the subdivided unit to the new units in any reasonable manner the owner of the subdivided unit specifies.
Limited Common Elements
Except as the declaration otherwise provides, a limited common element may be reallocated by an amendment to the declaration executed by the unit owners between or among whose units the reallocation is made. The people executing the amendment must provide a copy to the association, which must record it. The amendment must be recorded in the names of the parties and the common interest community (CGS § 47-227).
Reallocation of interests after eminent domain takes a part of a unit or part of the common elements are required by law without a vote (CGS § 47-206).
Reallocation- Leasehold Condominiums
Reallocation of interests in a leasehold condominium that is reduced by the expiration or termination of a lease are required by law without a vote (CGS § 47–225(d)).
TERMINATION OF COMMON INTEREST COMMUNITY
A condominium may be terminated only by agreement of unit owners of units to which at least 80% of the votes in the association are allocated, or any larger percentage the declaration specifies. The declaration may specify a smaller percentage only if all of the units are restricted exclusively to nonresidential uses (CGS § 47-237).
MERGER OR CONSOLIDATION OF COMMON INTEREST COMMUNITIES
Any two or more condominiums may be merged or consolidated into a single condominium. An agreement of two or more condominiums to merge or consolidate must be evidenced by an agreement prepared, executed, recorded, and certified by the president of the association of each of the preexisting condominiums following approval by owners of units to which are allocated the percentage of votes in each common interest community required to terminate that common interest community (CGS § 47-240).
APPROVAL OF PROPOSED BUDGET
Within 30 days after the executive board adopts a proposed budget for the condominium, it must provide a summary of the budget to all the unit owners and set a date for a meeting of the unit owners to consider ratification of the budget. Unless at that meeting a majority of all unit owners, or any larger vote the declaration specifies, rejects the budget, it is ratified, whether or not a quorum is present. If the proposed budget is rejected, the periodic budget last ratified by the unit owners is continued until such time as the unit owners ratify a subsequent budget proposed by the executive board (CGS § 45-245(c)).
REMOVAL OF EXECUTIVE BOARD MEMBER
Notwithstanding any provision of the declaration or bylaws to the contrary, the unit owners, by a two-thirds vote of all those present and entitled to vote at any association meeting at which a quorum is present, may remove any member of the executive board member with or without cause, other than a member a declarant appoints (CGS § 47-245(g)).
SPECIAL ASSOCIATION MEETINGS
A meeting of the association must be held at least once each year. Special meetings of the association may be called by the president, a majority of the executive board, or by unit owners having 20%, or any lower percentage specified in the bylaws, of the votes in the association (CGS § 47-250).
QUORUMS ASSOCIATION MEETINGS
Unless the bylaws provide otherwise, a quorum is present throughout any association meeting if persons entitled to cast 20 % of the votes that may be cast for election of the executive board are present in person or by proxy at the beginning of the meeting (CGS § 47-251).
Unless the bylaws specify a larger percentage, a quorum is deemed present throughout any meeting of the executive board if persons entitled to cast 50% of the votes on that board are present at the beginning of the meeting.
MORTGAGE OR SALE OF COMMON ELEMENTS
In a condominium, portions of the common elements may be conveyed or mortgaged by the association if persons entitled to cast at least 80% of the votes in the association, including 80% of the votes allocated to units not owned by a declarant, or any larger percentage the declaration specifies, agree to that action. But all owners of units to which any limited common element is allocated must agree in order to convey that limited common element or subject it to a security interest. The declaration may specify a smaller percentage only if all of the units are restricted exclusively to nonresidential uses (GCG § 47-254).
In a condominium, the common elements may be conveyed or subjected to a security interest free of the lien on the undivided interests in the common elements held by all mortgagees of the units, if 80% of the mortgagees consent in writing to the sale or encumbrance.
The law allows votes allocated to a unit to be cast at association meetings pursuant to a proxy duly executed by a unit owner. If a unit is owned by more than one person, each owner may vote or register protest to the casting of votes by the other owners of the unit through a duly executed proxy. A unit owner may revoke a proxy only by actual notice of the revocation to the person presiding over an association meeting. A proxy is void if it is not dated or purports to be revocable without notice. A proxy terminates one year after its date, unless it specifies a shorter term (CGS § 47-252(b)). The law also allows lessees to vote by proxy if the declaration requires that votes on specified matters affecting the common interest community be cast by lessees rather than unit owners of leased units (CGS § 47-252(c)).