How many votes does an Arkansas timeshare owner have in a suburban improvement district board election?

Plain-English summary

Prosecuting Attorney Tony Rogers asked the AG a tangled question about voting rights in suburban improvement districts (SIDs): how many votes does a timeshare holder get? His example mentioned a building with 28 timeshare units and asked whether the building gets two votes, each unit gets two votes, or each owner gets some other number.

AG Dustin McDaniel could not give a single number because the answer depends on the type of SID and the type of election. After working through Op. Att'y Gen. 95-348 (still good law on SID structures), the AG offered a two-track answer.

Track 1: Election to convert (only for small pre-1981 SIDs under § 14-92-240). If the SID contains fewer than 6,000 lots and historically chose successor commissioners by vote of the remaining commissioners, A.C.A. § 14-92-240 lets it convert to elected commissioners by petition and vote. In that conversion vote, each "property" gets two votes. For a timeshare property, the timeshare owners' association casts those two votes. How the association arrives at its position depends on the time-share instrument that created the estates; the instrument can give individual timeshare estate owners a say.

Track 2: Election to fill vacancies (any SID). A different rule applies once the SID is actually electing commissioners (in converted small pre-1981 SIDs, in post-1981 SIDs, or in pre-1981 SIDs that opted in via Act 782). Each "property owner" gets one vote per position. The AG concluded that an owner of a "time-share estate" (as opposed to a mere "time-share use") qualifies as a "property owner" under § 14-92-240(c), because A.C.A. § 18-14-104 expressly calls a time-share estate "an estate in real property" with "the character and incidents of an estate in fee simple at common law." So each holder of a time-share estate is entitled to one vote.

The AG flagged a structural concern in a footnote: a single timeshare building with many fee-simple estates could end up with disproportionately greater voting power than a comparably sized property owned by a single family or by tenants by the entirety. The legislature has not squarely addressed timeshare voting in vacancy elections. Legislative clarification may be warranted.

For "time-share use" arrangements (the lesser interest, short of ownership), the holder does not own real property and the vote-concentration concern does not arise. Such holders presumably do not vote at all.

Currency note

This opinion was issued in 2014. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Why two different vote allocations?
Because the legislature wrote two different statutes. The conversion vote under § 14-92-240(b)(4) assigns "two (2) votes ... for each property." The vacancy-filling vote under § 14-92-240(c) gives each property owner one vote per position. The legislature chose to allocate votes differently in those two contexts.

Who actually casts the two votes for a timeshare property in a conversion election?
The timeshare owners' association. The statute provides: "The interests of time-share owners shall be voted by the time-share owners' association." The association's internal procedures (set in the time-share instrument) determine how it votes.

What makes a timeshare estate count as "real property"?
A.C.A. § 18-14-104(a)(1) is explicit: "A time-share estate is an estate in real property and has the character and incidents of an estate in fee simple at common law." For purposes of title, it counts as a separate estate. That makes a timeshare estate owner a "property owner" under the SID statutes.

What about timeshare use?
A "time-share use" is a lesser interest, defined as "any arrangement under which the purchaser receives a right to occupy a time-share property but does not receive a time-share estate" (A.C.A. § 18-14-102(22)). The holder owns no real property and is not a property owner for SID voting purposes.

Could one timeshare building dominate an SID election?
Potentially, yes. The footnote concern: a building with dozens of fee-simple timeshare estates could outvote a comparably sized lot owned by one family. The legislature has not solved this through the SID statute. The time-share project instrument or the SID's own rules might mitigate it; the AG's opinion did not foreclose either option.

What about SIDs that haven't converted to elections?
Some pre-1981 SIDs still select successor commissioners by vote of the remaining commissioners. There is no public vote, and the timeshare question does not arise. Those SIDs can convert under § 14-92-240 (if fewer than 6,000 lots) or opt into election procedures under Act 782 of 1993.

Background and statutory framework

The suburban improvement district scheme sits at A.C.A. §§ 14-92-201 through -240. It was originally Act 41 of 1941. Substantial rework came in 1981 (new procedures for creation and dissolution) and 1993 (three separate acts on recall, elections to fill vacancies, and conversion to new five-member boards).

Districts created before March 16, 1981 historically used a different framework: commissioners were named in the petition that created the district and appointed by the county court, and vacancies were filled by the remaining commissioners. The 1981 act applied only prospectively, with a savings clause for pre-1981 districts. The 1993 acts (Acts 492, 524, and 782) gave pre-1981 districts various ways to opt into recall and election procedures.

A.C.A. § 14-92-240 (added by Act 524 of 1993) governs the special case of pre-1981 SIDs with fewer than 6,000 lots that want to convert to electing commissioners. Subsection (b) covers the conversion vote (two votes per property, with timeshare owners voting through their association). Subsection (c) covers subsequent vacancy elections (one vote per property owner per position).

For post-1981 SIDs (and pre-1981 SIDs that opted in via Act 782), vacancy elections are governed by A.C.A. § 14-92-209, which by cross-reference to § 14-92-204(b)(7) also restricts voting to one vote per owner.

The Time-Share Act sits at A.C.A. §§ 18-14-101 et seq., with definitions at § 18-14-102 and the "estate in real property" characterization at § 18-14-104. The time-share project instrument is the master document creating the time-share plan (§ 18-14-102(13), (18), (20)).

The opinion incorporates Op. Att'y Gen. 95-348, which still accurately describes SID election mechanics across the various pre-1981, post-1981, and converted-district categories.

Citations

• A.C.A. §§ 14-92-201 through -240 (suburban improvement district subchapter)
• A.C.A. § 14-92-209 (recall and vacancy filling)
• A.C.A. § 14-92-240 (conversion to elected board for small pre-1981 SIDs)
• A.C.A. § 14-92-240(b)(4) (two votes per property in conversion election)
• A.C.A. § 14-92-240(c) (one vote per property owner in vacancy elections)
• A.C.A. §§ 18-14-101 et seq. (Time-Share Act)
• A.C.A. § 18-14-102 (definitions, including "time-share estate" and "time-share use")
• A.C.A. § 18-14-104 (time-share estate as estate in real property)
• A.C.A. § 18-14-302(5) (voting rights in time-share instrument)
• Op. Att'y Gen. 95-348 (SID election mechanics)

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Official summary

How many votes does a timeshare holder within a suburban improvement district have in a vote for the SID Board?

RESPONSE: I cannot provide an unequivocal answer to this question, in part because you have not indicated what type of election relating to the board, or, for that matter, what type of suburban improvement district ("SID"), is at issue. For reasons discussed in my text, your "example" suggests, although it does not clearly establish, that you are referring to a time-share property in an SID containing fewer than 6,000 lots that either has converted or may convert to selecting commissioners by vote of the property owners. If so, A.C.A. § 14-92-240 will control. Each "property" in such a district has two votes in the election to approve or to disapprove the conversion. By contrast, each "property owner" in such a district, as well as in SIDs conducting elections under some other statutory provision, has one vote in an election to fill board vacancies. Under current law, each owner of a "time-share estate" owns an "estate in real property" marked by the "incidents of an estate in fee simple", a fact that would appear to qualify each holder of such an estate as a "property owner" entitled to vote for successor SID-board members.

Original opinion text

STATE OF ARKANSAS

THE ATTORNEY GENERAL
Dustin McDaniel

Opinion No. 2014-101

December 8, 2014

Robert T. Rogers, II, Prosecuting Attorney
19th Judicial District - East
202 North Springfield
Post Office Box 536
Berryville, Arkansas 72616

Dear Mr. Rogers:

I am writing in response to your request for my opinion regarding the following question:

How many votes does a timeshare within a suburban improvement district have in a vote for the Suburban Improvement District Board?

You have provided the following "example":

If there is one building containing 28 timeshare units, is the timeshare unit entitled to two votes for the entire building or does each of the 28 units get two votes? Could all owners of a timeshare unit get a vote?

You have specified no particular type of suburban improvement district as being at issue in your request.

RESPONSE

I cannot provide an unequivocal answer to this question, in part because you have not indicated what type of election relating to the board, or, for that matter, what type of suburban improvement district ("SID"), is at issue. For reasons discussed below, your "example" suggests, although it does not clearly establish, that you are referring to a time-share property in an SID containing fewer than 6,000 lots that either has converted or may convert to selecting commissioners by vote of the property owners. If so, A.C.A. § 14-92-240 will control. Each "property" in such a district has two votes in the election to approve or to disapprove the conversion. By contrast, each "property owner" in such a district, as well as in SIDs conducting elections under some other statutory provision, has one vote in an election to fill board vacancies. Under current law, each owner of a "time-share estate" owns an "estate in real property" marked by the "incidents of an estate in fee simple", a fact that would appear to qualify each holder of such an estate as a "property owner" entitled to vote for successor SID-board members.

DISCUSSION

In Op. Att'y Gen. 95-348, which I have attached for your convenience, one of my predecessors analyzed in detail the law with respect to elections in various types of SIDs. Given that the law remains the same in all material respects, I will not here repeat my predecessor's analysis. Proceeding from my predecessor's opinion, I will focus in my discussion below upon what issues of voting might arise under the limited facts provided.

You suggest in your "example" that the owner of a "timeshare unit" might be entitled to two votes. The Code contemplates two votes per property only in one variety of SID, and only then within the context of changing the method for selecting board members. This Code section provides in pertinent part:

(a) Any suburban improvement district which contains fewer than six thousand (6,000) lots and which selects successor commissioners by a vote of the remaining commissioners may alter the number and method of selection of members of the board of commissioners of the district pursuant to this section.

(b)(1) Any property owner in the suburban improvement district may make a written request for an election on the question of whether to change the method of selecting the board of commissioners of the district. The request shall be filed with a quorum court member whose district includes all or part of the suburban improvement district.

(4) Two (2) votes shall be awarded for each property. The interests of time-share owners shall be voted by the time-share owners' association ....

(c)(1)(A) Not more than sixty (60) days nor less than thirty (30) days after the measure is approved, the quorum court member who conducted the election under subsection (b) of this section shall hold a meeting to accept nominations for the new commissioners. Nominations for commissioners shall be made by property owners.

(B) The commissioners shall be elected, from among those nominated, at a subsequent public meeting to be held not less than thirty (30) days after the meeting to nominate commissioners.

(2) Each property owner in attendance at the meeting to nominate shall be entitled to nominate one (1) district resident property owner. Each property owner shall be entitled to one (1) vote for each position of commissioner to be filled. A property owner may cast his or her vote in person at the meeting conducted to elect commissioners or may vote by an absentee ballot. Absentee ballots must be received prior to the meeting held to elect commissioners. Any absentee ballot may be requested by any property owner.

(3)(A) A meeting shall be held annually to nominate successor members, and a subsequent meeting shall be held to elect successor members.

(B) The annual meetings shall be conducted by the board.

As reflected in subsection (b) of the statute excerpted above, in an election to change the method of selecting board members, a "property" is entitled to two votes. In the case of time-share units, the time-share owners' association is authorized to cast these votes. As further reflected in subsection (c), in an election actually to select board members, each "property owner" either present at an election meeting or voting by absentee ballot is entitled to one vote.

Under this statute, then, at issue are (1) what constitutes a "property" entitled to two votes in an election to change the manner of selecting successor members of an SID board; and (2) assuming an SID has committed to replace board members by election, what constitutes a "property owner" entitled to one vote to fill each vacant board membership.

With respect to the first of these issues, the subchapter of the Code generally devoted to SIDs defines "land" or "real property" as "all property subject to taxation for the purposes of this subchapter." "Taxation," as used in this definition, denotes assessments sufficient to defray the costs of SID improvements. In an election to change the method of selecting board members, then, each property subject to assessments would be entitled to two votes. In the case of each property occupied by time-share units, the time-share members' association would cast these two votes.

With respect to the related issue of how the association would cast these votes, in my estimation, the time-share instrument that established the time-share estates would control. In this regard, the Code expressly provides:

A project and time-share instrument that establishes a time-share estate located or offered in this state shall contain:

(5) ... any voting rights assigned to each time-share estate ... .

Pursuant to this provision, the owners of time-share estates might in theory be empowered to direct by election how the time-share members' association should cast its votes in the SID election.

With respect to the second issue identified above, namely, what constitutes a "property owner" entitled to one vote to fill each vacant board membership, the Code assigns one vote to each "property owner" either present at an election meeting or voting by absentee ballot. Significantly, this conclusion applies not only in converted SIDs containing fewer than 6,000 lots, but in any other SID that conducts elections to fill vacancies.

As previously noted, A.C.A. § 18-14-104(a)(1) characterizes a "time-share estate" as "an estate in real property" that "has the character and incidents of an estate in fee simple at common law." As such, any owner of a "time-share estate" would appear to qualify as a "property owner" as that term is employed in A.C.A. § 14-92-240(c). Each such owner would in turn appear to be entitled to one vote in the SID election.

As noted above, based only upon your passing remark that "two votes" might be allowed per "timeshare unit," I have identified A.C.A. § 14-92-240 as most likely being the focus of your question, speculation that admittedly constitutes a slender reed upon which to hang an analysis of voting rights in this case. Nevertheless, specifically with regards to A.C.A. § 14-92-240, the legislature has chosen to assign particular voting rights to "properties" in one context, namely, elections to convert to a system of filling board vacancies by election, whereas it has chosen to assign different voting rights to "property owners" in another, namely, elections actually to fill such vacancies. Unaccountably, the legislature has addressed the issue of time-share voting in the former context but not the latter. It may be that, if confronted with the issue, it would adopt a rule that addresses voting issues in succession elections relating to multiple ownership of the sort that frequently marks a time-share arrangement. For the moment, it remains unclear to what extent such problems might be addressed in a time-share project instrument or in the SID's rules and regulations. Legislative clarification on these issues may be warranted.

Recognizing that other factual circumstances may apply, I can do little more than again refer you to the attached Opinion 95-348, which ably sets forth the rules potentially applicable to various forms of SID, including not only those addressed in A.C.A. § 14-92-240, but also those covered by A.C.A. §§ 14-92-209 and -204. I will summarize the pertinent provisions, however, as follows:

With respect to SIDs formed on or after March 16, 1981:

(1) A.C.A. § 14-92-209(a) sets forth the procedures for any recall and subsequent election to fill the resulting vacancy. By cross-reference to A.C.A. § 14-92-204(b)(7), this statute at subsection -209(a)(6) restricts voting to one vote per owner.

(2) Subsection 14-92-209(b) controls all elections to fill all other types of vacancies. By cross-reference to subsection (a), subsection (b) restricts voting to one vote per owner.

With respect to SIDs formed before March 16, 1981:

(1) Subsection 14-92-209(c)(1) specifies that following a recall, the one-vote-per-owner rule set forth in subsection -209(a) will apply to fill any resulting vacancy.

(2) Subsection 14-92-209(d)(1) specifies that subsection -209(b) will control to fill any other type of vacancy in a pre-March 1981 municipal water or sewer district, likewise meaning that the one-vote-per-owner rule will apply.

(3) Subsection 14-92-209(d)(2) dictates that prior law will apply to fill a board vacancy in any other type of SID falling in this general class. As my predecessor rightly noted, this rule does not foreclose an SID falling within this designation from opting to convert and proceed as described above pursuant to A.C.A. § 14-92-240, assuming the preconditions for doing so are met.

Irrespective of what type of SID is at issue, then, under current law, voting to fill SID vacancies, if authorized at all, will turn upon property ownership, with each owner assigned one vote per candidate under whichever of the statutes referenced above might apply. Local counsel fully apprised of all attendant circumstances would be best situated to offer advice in each specific case regarding which statute imposes this condition.

Assistant Attorney General Jack Druff prepared the foregoing opinion, which I hereby approve.

DUSTIN McDANIEL
Attorney General

DM/JHD:cyh

Enclosure