A member of an association is generally entitled to cast one (1) vote for each unit the member owns within the association. (See “One Vote Per Unit.”) However, the developer of the association (the builder of the common interest development (“CID”)) is permitted to establish different classes of voting memberships in the association’s governing documents. (10 CCR § 2792.18.) Developers do so in order to maintain control of the CID for as long as possible as units are sold to individual homebuyers while the CID is being built-out.
Class A Membership
Class A members are designated as owners of units and have one (1) vote for each unit/lot owned. (10 CCR § 2792.18(b)(1).)
Class B Membership
Class B membership is reserved to the developer, who is given up to three (3) votes for each unit/lot held by the developer. (10 CCR § 2792.18(b)(2).) Class B membership is tied to the developer’s ownership of separate interests (units) that are subject to assessments. (10 CCR § 2792.16(f)(2).) Pursuant to 10 CCR § 2792.32(c), Class B membership automatically converts to Class A membership when any of the following occur:
- When 75% of the authorized residential interests transfer to homebuyers;
- On the 5th anniversary of the most recent conveyance of a residential interest to a homebuyer. This deadline can be extended indefinitely as long as a residential unit is transferred once every 5 years; or
- On the 25th anniversary of the first conveyance of a residential separate interest in a master planned community.
Class C Membership
Class C membership may only be used in master planned communities and extends only to votes for electing directors to the board. It allows the developer to preserve control of the board by giving the developer the right to elect a majority of the directors for an extended period of time. (10 CCR §2792.32(f).) Pursuant to 10 CCR § 2792.32(f)(1), these rights automatically terminate when any of the following occur:
- 75% of the residential interests have been conveyed to homebuyers;
- On the 5th anniversary of the first conveyance of a residential interest to a homebuyer; or
- On the 25th anniversary of the first conveyance of a residential interest in a master planned community.
- 10 CCR Section 2792.19. Reasonable Arrangements – Election of Governing Body.
- 10 CCR Section 2792.16. Reasonable Arrangements – Assessments & Liens.
- 10 CCR Section 2792.18. Reasonable Arrangements – Members’ Voting Rights.
- 10 CCR Section 2792.32. Alternative Arrangements for Master Planned Communities.