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Farr dissents on vote about ‘owner’ bylaw

Electronic voting must be unanimous to be official

By Greg Ellison

(March 24, 2022) Despite initial assertions that the Ocean Pines Board of Directors voted unanimously by email last week to amend the definition of owner of record in its proposed bylaws revisions, it has since come to light that Director Rick Farr opposed the motions.

For the board to vote electronically, unanimous consent is required for both the procedure and also to pass motions put forth.

Speaking on Tuesday, Farr said while he did concur with the email vote procedure, he declined to support the subsequent motions.

“[Association President] Colette Horn assumed I voted when I didn’t,” he said. “I never cast a vote.”

The directors have spearheaded a comprehensive review of the bylaws, which were last revised in 2008. Those resulting revisions will be voted on by association members in a referendum this spring.

During a related town hall meeting on March 12, Bylaws Committee Chair Jim Trummel said the group recommended changing the proposed definition of owner of record to prohibit representatives of properties owned by corporations, LLCs or partnerships from running for the board.

Conversely, the proposed definition for owner of record would allow trustees or co-trustees to qualify for board membership.

Farr took exception with the approach and proposed expanding the trustee parameters.

“I said, ‘I’ll vote yes if you guys change the motion to add equitable ownership,’” he said. “I thought it was relevant because of this last litigation that took place.”

Farr said the point stems from his recent lawsuit over being disqualified as a board candidate last summer.

“I was an equitable owner of my trust,” he said. “That was one of the key factors of the judge’s ruling.”

Farr said the inclusion of equitable owner would help avoid future litigation.

“I thought that was important that go in there because it could be challenged again,” he said. Farr’s challenge was successful.

Another point of contention Farr gave for the failed email vote was related to Limited Liability Corporations.

“The issue with the LLC is you could have a husband and wife owning property under an LLC and that’s as far as it goes,” he said.

Farr said in many instances LLCs include limited members, which are often family relations.

“You’re disenfranchising people who could be just a mom and pop or a man and wife having their home in an LLC,” he said.

The argument for prohibiting LLC-based property owners from seeking a board seat, as well as corporate interests or partnerships, boils down to divided loyalties.

“They’re making a judgment that their loyalties won’t be to Ocean Pines,” he said. “You don’t know that, and I don’t know that.”

In large part, Farr said private homeowners place property under LLCs for tax purposes.

“I can see corporations could be carved out, but LLCs are typically smaller groups,” he said. “I have an LLC in my consulting business and it’s just me.”

In light of the stalled email vote, the recommended bylaws revisions would be voted on during the board meeting scheduled on Wednesday.

The currently proposed definition for owner of record in bylaws section 1.11 cites ownership as the “person(s) listed on the deed … in Land Records of Worcester County.”

The proposed owner of record definition also accounts for trustees or co-trustees, but if amended as recommended by the Bylaws Committee, would prohibit representative members of LLCs, corporations or partnerships from board candidacy.

“You’re making a judgment on people that’s not fair,” he said.

Farr plans to argue in favor of amending the trustee aspect at the board meeting this week.

“I’m going to bring this up tomorrow, why we should add equitable owner to it,” he said.

Regardless of long-term concerns aired over business entities taking control of the board, Farr said rule changes should be inclusive.

“You want to encourage people to run for the board and be part of the board,” he said.