Should Delinquent Owners be Allowed to Vote?

Resource Topic: 
Governance
Meetings
Litigation
Collections
By: Heather L. Hartung

Does your community have an upcoming homeowner meeting that includes voting on issues such as director elections, special assessments, or document amendments?  Assuming your community also has owners that are delinquent in the payment of assessments, do you allow such owners to participate in the vote? Since the number of delinquencies and violations in associations continue to rise, it is important for associations to consider all available collection tactics, including suspending the voting rights of delinquent homeowners.

Voting by members of the association is an inherent right and privilege of ownership.  All things being equal, owners are entitled to vote on matters properly brought before the membership by virtue of owning property within the association. So, the question to be answered is: “may such voting rights be suspended when an owner is delinquent?” The answer to this question is “Yes, if allowed by the governing documents.”

Many associations’ governing documents contain provisions allowing boards to suspend voting rights of delinquent homeowners. The first step in determining whether your association should proceed with suspension of voting rights is to verify that the homeowner is, in fact, delinquent. The next step is to review the governing documents to ensure suspension of voting rights is a remedy provided and authorized for the association. If allowed, the next step is to determine the process for suspending the voting rights. For example, is notice to the owner required? If so, what type of notice is required and when is it required? Is a hearing required? These are important questions to obtain answers to prior to taking any action.

What do you do if your governing documents are silent on this issue?  If the governing documents do not set forth clear authority to suspend voting rights of delinquent owners, associations cannot utilize this method as it is not authorized by statute.  On the other hand, if the governing documents do authorize suspension of voting rights for delinquent owners, but provide no further guidelines, it is reasonable to mention this when sending out the notice of homeowner meeting to the members.  For example, the notice may say, “According to the governing documents, you must be current in your assessments to vote at this meeting”.  This verbiage will provide sufficient notice to owners that they must be current to vote.

Another detail to be aware of is whether your governing documents allow the association to suspend voting rights or require the suspension of voting rights.  If the governing documents contain mandatory suspension language (such as “shall” or “must”), boards will not have discretion concerning this issue and will be required to suspend voting rights.  On the other hand, if the language is permissive, boards will have a choice.  Be careful that these choices are made consistently by the board so as not to treat any owner differently.  In other words, the board should suspend all delinquent owners’ rights to vote or none of the delinquent owners’ rights to vote. Another possible option is for an association to adopt a policy indicating that delinquencies that are more than 30 days delinquent (by way of example) will not be allowed to vote, but delinquencies that are less than 30 days delinquent will still be allowed to vote.

Although suspension of voting rights is considered a “mild” form of enforcement against delinquent homeowners, it is a form of enforcement that should be utilized in conjunction with other collection efforts authorized in the governing documents or through Colorado law. Other tools to be utilized in connection with collections include suspending recreation privileges (i.e. pool privileges in the summer), accelerating dues if allowed by the governing documents and creating a culture of voluntary compliance. Associations should consider all tools to encourage residents to pay assessments promptly and to conform to the covenants, rules and regulations of the association.

For a more in-depth discussion concerning voting by delinquent owners and generally conducting meetings of the association, read our article entitled “Effective and Lawful Meetings.”

If you have questions regarding suspending voting rights of delinquent owners, please contact a HindmanSanchez attorney at 303.432.9999 for additional information.