Classes of HOA Memberships

Developers are permitted by the California Department of Real Estate to establish different classes of voting memberships in the governing documents of common Interest developments. This allows developers to maintain control of their developments for as long as possible as units/lots are sold.

Class A members are designated as owners of units (buyers) and have one vote for each unit/lot owned.

Class B memberships are reserved to the developer, who is given three votes for each unit/lot owned. Class B memberships are tied to the developer's ownership of separate interests that are subject to assessments. Class B votes may be used for any issue presented to the membership for a vote. Class B memberships automatically convert to Class A when one of the following takes place:

• When 75% of the residential unit/lots transfer to homebuyers.

• On the 5th anniversary of the most recent conveyance of a residential unit/lot to a homebuyer, or

• On the 25th anniversary of the first conveyance of a residential unit/lot in a master planned community.

Class C memberships may only be used in master planned communities. They allow the master developer to extend control of the board of directors by giving him or her the right to elect directors to the board for an extended period of time. Class C votes are limited to the election of directors only. These extended rights automatically terminate when any of the following occur:

• 75% of the residential unit/lots have been conveyed to homebuyers.

• On the 5th anniversary of the first conveyance of a residential unit/lot to a homebuyer; or

• On the 25th anniversary of the first conveyance of a residential unit/lot in a master planned community.

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