California Code of Regulations
Title 10 - Investment
Chapter 6 - Real Estate Commissioner
Article 12 - Subdivisions
Section 2792.18 - Reasonable Arrangements-Members' Voting Rights

Universal Citation: 10 CA Code of Regs 2792.18

Current through Register 2024 Notice Reg. No. 38, September 20, 2024

(a) With the exception of those Associations which have two classes of voting membership, a member of an Association, including an Association which provides for unequal assessments against the subdivision interests, shall be entitled to one vote for each subdivision interest owned. If a subdivision interest is owned by more than one person, each such person shall be a member of the Association, but there shall be no more than one vote for each subdivision interest.

(b) An Association may have two classes of voting membership according to the following provisions:

(1) Each owner of a subdivision interest other than a subdivider is a Class A member. Class A membership entitles the holder to one vote for each subdivision interest owned.

(2) The subdivider is a Class B member. Class B membership entitles the holder to not more than three votes for each subdivision interest owned.

(3) In a single-phase subdivision development, Class B membership shall be irreversibly converted to Class A membership on the first to occur of the following:
(A) The total outstanding votes held by Class A members equal the total outstanding votes held by the Class B member.

(B) A prescribed date which is not later than the second anniversary of the first conveyance of a subdivision interest in the development.

(4) In a multi-phase development for which the subdivider has submitted a plan for phased development through annexation which satisfies the requirements of Section 2792.27, the Class B membership shall be irreversibly converted to Class A membership on the first to occur of the following:
(A) A prescribed date certain which is not later than the second anniversary of the first conveyance of a subdivision interest in the most recent phase of the development.

(B) A prescribed date certain which is not later than the fourth anniversary of the first conveyance of a subdivision interest in the first phase of the development.

(c) With the exception of Section 2792.4, no regulation which requires the approval of a prescribed majority of the voting power of members of the Association other than the subdivider for action to be taken by the Association is intended to preclude the subdivider from casting votes attributable to subdivision interest which he or she owns. Governing instruments may specify either or both of the following for approval of action for which a regulation of the Bureau--other than Section 2792.4 --requires the approval of a prescribed majority of the voting power of members of the Association other than the subdivider:

(1) In those Associations in which Class A and Class B voting memberships have been prescribed in accordance with this regulation, the vote or written assent of a bare majority of the Class B voting power as well as the vote or written assent of a prescribed majority of the Class A voting power.

(2) In those Associations in which a single class of voting membership exists, either as originally established or after the conversion of Class B to Class A shares, the vote or written assent of a bare majority of the total voting power of the Association as well as the vote or written assent of a prescribed majority of the total voting power of members other than the subdivider.

1. New section filed 1-16-76; effective thirtieth day thereafter (Register 76, No. 3).
2. Amendment filed 2-10-77; effective thirtieth day thereafter (Register 77, No. 7).
3. Amendment of subsection (e)(4) filed 1-17-80; effective thirtieth day thereafter (Register 80, No. 3).
4. Amendment filed 1-7-81; effective thirtieth day thereafter (Register 81, No. 2).
5. Amendment of subsections (a) and (b) filed 4-2-86; effective thirtieth day thereafter (Register 86, No. 14).
6. Amendment of subsections (b)(3)(B), (b)(4)(A)-(B) and (c) filed 4-7-92; operative 5-7-92 (Register 92, No. 14).
7. Amendment of subsections (b)(3)(B), (4)(A), (4)(B) and NOTE filed 11-8-93; operative 12-8-93 (Register 93, No. 46).
8. Change without regulatory effect amending subsection (c) filed 6-30-2014 pursuant to section 100, title 1, California Code of Regulations (Register 2014, No. 27).

Note: Authority cited: Sections 10080 and 11001, Business and Professions Code. Reference: Section 11018.5, Business and Professions Code.

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