Leisure World MD owners seek democratic elections

By Deborah Goonan, Independent American Communities

Activist group Just Us ( www.justus.group ) continues its fight for democratic election procedures in Leisure World Community Corporation (LWCC).

The long-running dispute, spearheaded by Just Us President, Sheryl Katzman, fights for the right of LW owners and mutual share holders to directly elect members of the sprawling community’s umbrella/master association board (LWCC).

Katzman filed a complaint with Montgomery County Commission on Common Ownership Communities (CCOC) in August, citing her allegation that LWCC failed to hold an election that complies with the Maryland Homeowners Association Act.

 

HOA elections, according to Maryland Statute

Maryland’s HOA Act, § 11B-106.1. Election of governing body of homeowners association provides for electing board members following turnover by the developer. 

In relevant part, according to MD statute, allows members to elected the HOA board. (Emphasis added)

Meeting to elect governing body of homeowners association

(a) A meeting of the members of the homeowners association to elect a governing body of the homeowners association shall be held within:

(1) 60 days from the date that at least 75% of the total number of lots that may be part of the development after all phases are complete are sold to members of the public for residential purposes; or

(2) If a lesser percentage is specified in the governing documents of the homeowners association, 60 days from the date the specified lesser percentage of the total number of lots in the development after all phases are complete are sold to members of the public for residential purposes.”

But…Note that MD statute fails to define “members of the homeowners association.”

 

Vote HOA election scrabble
(Pixabay.com free image)

Homeowners may presume that each lot owner is a member of the HOA. But MD statute does not make the connection between Lot owners and members of a homeowners association.

To illustrate, observe that MD statute defines a “Lot” as follows:

Lot

(j)(1) “Lot” means any plot or parcel of land on which a dwelling is located or will be located within a development.

(2) “Lot” includes a unit within a condominium or cooperative housing corporation if the condominium or cooperative housing corporation is part of a development.”

Nowhere in the HOA Act does the statute say that all lot owners are members.

Instead, MD statute defers to each community’s Bylaws to assign voting rights and delineate election procedures. This is made clear in enforcement provisions of the HOA Act. (Emphasis added)

§ 11B-115.1. Failure to comply with the election procedures of homeowners association

A lot owner who believes that the board of directors or other governing body of a homeowners association has failed to comply with the election procedures provisions of the governing documents of the homeowners association may submit the dispute to the Division of Consumer Protection of the Office of the Attorney General if the provisions concern:

(1) Notice about the date, time, and place for the election of the board of directors or other governing body;

(2) The manner in which a call is made for nominations for the board of directors or other governing body;

(3) The format of the election ballot;

(4) The format, provision, and use of proxies during the election process; or

(5) The manner in which a quorum is determined for election purposes.

Nondemocratic Elections in Leisure World

According to Katzman and other dissatisfied homeowners, Leisure World Bylaws specify that members of the umbrella association are to be “selected” vs. “elected” as representatives of each separate mutual of the master planned senior community in Maryland.

But in a document submitted to CCOC, Katzman has proposed restructuring Leisure World Community Corporation with a 9-member board, divided in to 5 Districts, with 4 At Large seats.

Katzman says that votes should be allocated one per Lot in Leisure World, enabling all owners and shareholders to serve as voting members of the HOA. In other words, any lot owner should be entitled to cast votes for their District and At Large board LWCC members.

Currently, the board of LWCC consists of 34 members, one from each of 29 mutuals, plus 5 at large seats. The board of each mutual selects its respective representative to LWCC, cutting all other Lot owners out of the election and decision-making process at the master association level.

CCOC denies a hearing

In a letter signed by Mark H. Anders, the Montgomery County Commission on Common Ownership Communities (CCOC) refuses to hold a public hearing on Sheryl Katzman’s complaint, deferring the issue of fair HOA elections and voting rights of lot owners to the courts.

MD CCOC Anders letter to S Katzman JustUs
(Source: Sheryl Katzman, President, Just Us)

The dismissal of Katzman’s complaint is not unexpected.

According to Katzman, 3 members of the CCOC have conflicts of interest:

Two of the Commissioners present and voting on November 7, 2018, are Leisure World resident/unit owners (Kathy Viney and Dallas Valley). Both failed to recuse or abstain, thereby violating their code of ethics.

Another CCOC commissioner (Staci Gelfound, who is a Professional Community Association Manager through the Community Associations Institute (CAI), identified herself as a former LW employee – using the rationale that since she had worked at Leisure World, she knew that the ‘members are mutuals – not unit owners’. In her statement that ‘all other HOA umbrella boards of directors are not elected,’ Ms. Gelfound displayed her preference for maintaining the status-quo violation and purposeful non-compliance with the State of Maryland law providing for elections by unit owner/members.

Anders argues that CCOC does not have jurisdiction over the HOA complaint filed against LWCC. But Katzman objects:

CCOC does have jurisdiction over an HOA failure to conduct elections as required by State of Maryland Homeowners Association Act – said failure to do so falls squarely within CCOC mandated jurisdiction under Montgomery County Code 10 B.  In choosing to reject jurisdiction, CCOC negates and violates the rights and standing of the Complainant as prescribed by both Montgomery County Code and State of Maryland HOA Act.  In that the civil action filed by another individual is subject to dismissal due to Plaintiff’s lack of service, this CCOC case #2019-012 need be immediately reopened – brought back before the CCOC and adjudicated without prejudice.

 

Standard voting structure for many large association-governed common interest communities in the U.S.

One vote per unit is standard for many large-scale HOAs, but only at the sub-association (village or neighborhood phase) level.

As previously noted here on IAC, a sub-association board’s “selection” of its “representative” to serve on the master/umbrella association is indeed status quo across the U.S.

That’s definitely a huge problem, because homeowners or shareholders in the association never get to directly vote for the leaders of their master association.

Yet these umbrella associations wield enormous power over communities that are the size of many small U.S. towns or cities. Those powers include rule making, amending governing documents, establishing annual budgets, and setting HOA assessments at for the Master Association.

Incredibly, most owners are blissfully unaware of the pitfalls of this undemocratic arrangement until it’s too late.

References:

Contact information for Sheryl Katzman, President of “JustUs”-conscience of the community

“JustUs” advocates to enhance the quality of life for all Leisure World residents

website: www.justus.group

email: admin@justus.group

town meeting organization (TMO) website: www.townmeetingorganization.com

 

LWCC LWMC Oppose complaint filed to CCOC