Developers are allowed to establish different classes of voting memberships in the governing documents. This is so the developer can maintain control of the of the development for as long as possible as units/lots are sold.
Class A Membership
. Class A members are designated as owners of units and have one vote for each unit/lot owned.
Class B Membership
. Class B membership is reserved to the developer, who is given three votes for each unit/lot held by the developer. Class B membership is tied to the developer's ownership of separate interests that are subject to assessments. Class B votes may be used on any issue presented to the membership for a vote. As provided for in 10 Cal Code Regs §2792.32(c), Class B membership automatically converts to Class A when one of the following occurs:
Class C Membership
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 may only be used in master planned communities. It allows the master developer to extend control of the board of directors by giving him the right to elect directors to the board for an extended period of time. 10 Cal. Code Regs. §2792.32(f). Class C votes are limited to the election of directors only. These extended rights automatically terminate when any of the following occur (10 Cal. Code Regs. §2792.32(f)(1)):
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