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Subject: Invalid Covenant Change
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Author Messages
VivianA
(Ohio)

Posts:12


02/12/2012 3:50 PM  
Hello All,

I am a member of my HOA Board. The restrictive covenants can only be changed by a homeowner majority vote of 75% or more.

The board just recently voted on a covenant change instead of putting the vote forth to the homeowners. When I brought this to their attention prior to the vote, I was told that it was impossible to get 75% of the homeowners to vote for any item, so the Board would vote instead. Apparently, this is not the first time they have done this (I was not a board member at that time).

I abstained from the vote and asked that my comments be noted in the minutes. I am at a loss as to how to proceed as the vote was not valid. I cannot in good conscience watch this happen and not take action.

Any advice would be greatly appreciated. Thank you!
SusanW1
(Michigan)

Posts:5202


02/12/2012 3:56 PM  
You should have called a "point of order" at the time the motion was made and stated reasons why this vote could not take place (violates your own documents) the motion was dilatory.

You need to remind the board that they have done something illegal and unenforceable, so they need to recind the vote or the president can declare it null and void.

A lawsuit could come forth due to this.

Your president is asleep at the wheel and puts the HOA in legal jeparody.


TimB4
(Virginia)

Posts:8998


02/12/2012 4:00 PM  
Vivian,

If the other board members are not willing to listen, I think that you have done all you can do as a member of the Board.

As an Association member, you could gather your neighbors together, seek additional information by going through the minutes and see how many changes were made in the past by just the Board. Then research the laws of your State to verify that the Board did not have any authority to make the changes they made (I say this because some States allow the Board to make changes to correct simple errors (like misspellings)).

Then you, and your neighbors can either:

1) Recall the Board
2) Challenge the amendments through the courts
3) live with how it's being done

CarolR11


Posts:0


02/12/2012 4:24 PM  
Yes, try again to convince the board to rescind its vote.

Suggest they seek written advice from your HOA attorney if you cannot persuade them

If you have a good property mgr., s/he may be able to help.
VivianA
(Ohio)

Posts:12


02/12/2012 4:38 PM  
Thank you Susan, Tim, and Carol for the excellent points. I will definitely ask for a recision of the vote and will follow-through with the other advice as well. I really am grateful for your thoughtful and knowledgeable responses.
CarolR11


Posts:0


02/12/2012 4:56 PM  
You're welcome, Vivian. Out of curiosity, what CC&R did the board change?

Susan's right, Vivian, you really should be concerned since your obligation is to protect your HOA's assets. The HOA really could be sued so it is good that you placed your reasons for abstaining in the minutes. Make sure that your reasons actually are in the minutes when the board votes to approve them.

I was the only director to vote no on a rule change at our last board meeting because the board approved something against our HOA attorney's written advice and I definitely wanted to be on the record as opposed & my reason why.
JohnC46
(South Carolina)

Posts:3988


02/12/2012 5:01 PM  
Vivian

There is a difference in a CC&R (often called covenants) and Bylaw change.

Usually a CC&R change will require a quorum of say 75% of the homeowners to vote on to change. Like we needed a quorum of 75% to change our CC&R's to a quoram being 66%, not 75%. Which we did but we needed 75% of the owners to vote on it.

Now a Bylaw change can usually be done by a majority of the BOD voting for. Like raising the dues, borrowing money, fines, clarification of parking, etc.

In some states changes (CC&R's and/or Bylaws) apply to all regardless of when they were made, even after one bought in under "older" rules. In other states changes might apply only to those buying in after the changes were made. This is a very hot topic concerning rentals, assements, etc.

Be sure which/what "document" you are referring/asking questions about, what it says "they" can/cannot do, and what state law says.

While not a black or white answer. I believe my advice gives some direction.



LarryB13
(Arizona)

Posts:2354


02/12/2012 5:16 PM  
Any amendments to the CC&R's must be recorded in the public records. I can speak only from my own experience, but our CC&R's require the HOA secretary to certify that the required number of owners agreed to the change. I found one HOA where they actually recorded the names of all owners who voted, both for and against.

Does your HOA have a similar requirement that the secretary certify the results? If so, did your secretary or other officer falsely certify the vote and record that certification? While I do not expect the SWAT team to show up, it may be a criminal act to record a falsely certified document.
DorothyO
(Washington)

Posts:251


02/12/2012 5:30 PM  
Was the intent of the covenant changed or compromised in any way? There are methods of "changing" a covenant by order of Resolution, without the necessary vote, if the intent of the covenant is not changed. For example: we have a covenant that states: "No trailers, trucks or boats shall be stored or parked on the premises. No motor homes, mobile homes, camper trailer, or boats shall be stored or parked on any lot unless said vehicle fits into a garage which has been approved by the Residential Committee." This is an original covenant and is as poorly written as many original covenants are. If you were to read this literally, no one could park a regular ole' pickup truck in their driveway. One cannot reasonably interpret this as the covenant's intent. What is a reasonable interpretation is to not have the neighborhood turn into an RV park or boat launch or an eye-sore of trailers, snowmobiles, jet skis etc.

But, in practice, what was going on is that a three-day grace period was being permitted to allow for the use of these vehicles, for cleaning, unpacking, transporting, visitors, yard work etc. However, there was never anything in writing establishing this as an actual rule. So, my Board, adopted a Resolution establishing the three-day grace period, recognizing that homeowners do own these types of vehicles, do use them, do have visitors who use them and should have reasonable guidelines for such usage.

Also, our Bylaws state: "The Board is empowered to adopt, amend, and revoke on behalf of the Association detailed administrative rules and regulations necessary or convenient from time to time to ensure compliance with the general guidelines of the Declaration of Covenants, Conditions and Restrictions, and to promote the comfortable use and enjoyment of the subdivsion."

So, in the end, we felt that the original intent of the covenant was not being violated, in that after three days any such vehicle would need to be vacated from the property, and in allowing this three-day grace period it did promote the comfortable use and enjoyment of the subdvision.

We wound up establishing seven Resolutions that "altered" a covenant but did not change the intent. Another example was changing the original name of the committee that did architectural review from "Residential Committee," to "Architectural Review Committee" (ARC). Did it "change" the covenant governing this? Yes. Did it change the intent? No.

None of these needed the 2/3's vote needed to "change" a covenant. All seven Resolutions were made and adopted without issue. So, I'm just saying that there are valid instances where Boards can make changes to covenants without the required vote. It just depends on the nature of the change and how it effects the intent of the covenant.



JohnC46
(South Carolina)

Posts:3988


02/12/2012 5:49 PM  
Dorothy

Well done. Thought out and realistic versus fire from the hip as many do.

I want you on my BOD.......LOL



TimB4
(Virginia)

Posts:8998


02/12/2012 5:59 PM  
Vivian,

Here is a link to Community Associations network's Ohio Page which has links to Ohio HOA/COA laws on it (scroll down the page and look in the left column). They are also a sponsor of this site.

Additionally, if the Association is incorporated as a nonprofit, Ohio Nonprofit Corporation Law would also apply.

Hope these resources help.

Tim

JanetB2
(Colorado)

Posts:1962


02/12/2012 6:40 PM  
Hi Vivian:

If the covenants state 75% (and which is stated in state statutes which Tim posted), then said change could possibly be challenged in court. If the HOA pursues via court to enforce then they possibly would be wasting HOA money. I did not see anything in the Ohio statutes regarding limitation for filing lawsuit regarding amendments. For example in my state if an amendment to the CCR’s is not challenged within one year then the amendment is valid. However, it would be something to check with your HOA attorney.

Keep in mind the CCR’s are attached to everyone’s property, they were agreed to when individuals purchased, and this is why any changes are to be agreed to by proper majority of owners following the governing documents.

Now let me play “devil’s advocate” regarding Dorothy’s post. If a homeowner files a lawsuit regarding CCR’s a court will first look at the “plain” language of the CCR. That is because this is the absolute governing document. If the Original covenant state “trucks”, then the court has to consider the fact that a truck is a truck period end (if it does not describe size, etc.). If a board consisting of 3, 5, 7, 9, etc. individuals on their own without the required membership consent determine that a regular ole’ pickup truck is no longer part of the original “plain” language which states “trucks”, then potentially what would a court of law determine?

My money would be on the original CCR’s and not on how a handful of individuals feel the covenant should state via their own personal board resolution. The point is any legal absolute binding changes should be done via proper amendment to CCR and which all owners vote. This then is filed with the county records and properly attached to the property. The HOA then insures future purchasers are aware of any changes to the documents and they in turn can determine whether or not they want to purchase in the subdivision based on the legal documents properly filed.
BonnieG1
(Nebraska)

Posts:697


02/12/2012 7:22 PM  
We have had a couple of cases where a vote was determined to be invalid. One needed a 100% approval for an amendment to our documents.
The other time was when we got 6 members on the board when our documents only allow for 4.
I helped because we had a lawyer on the Board who set us on the right track.

However, I get frustrated because I can say the same thing the lawyer says, but our President doesn't listen to me until the lawyer says the exact same thing.
JohnC46
(South Carolina)

Posts:3988


02/12/2012 7:57 PM  
Janet

Allow me to play the devil's devil's advocate...any such thing..LOL

As an example, a vehicle with business signs on it. Is it a commercial vehicle verus an identical vehicle with no signs on it? I say if it has a sign on it, it is a commercial vehicle. If such, some HOA's would not allow it to be parked outside in ones own driveway overnight where as I could have an identical vehicle (less the signs) parked overnight in my driveway. This was a real life, past HOA issue.

I say interpertations can be "clarified/modified" without CC&R changes. My guide line would be make a new rule, probably not. Clarify an existing one, probably yes.

Of course, I could be wrong.

JanetB2
(Colorado)

Posts:1962


02/12/2012 8:18 PM  
Hi John:

LOL … would depend on what the document states specifically. Essentially it depends on the “plain” language stated in the governing documents.

The point I am making is that CCR’s and associated Amendments voted by all which are attached to and running with everyone’s property supersede any potential rules and regulations OR resolutions which a small number (a.k.a. board) implement and which might not be legally binding. I would hate to see an association spend a lot of money to pursue litigation for a board rule vs. CCR and possibly not win. If attached to property it potentially “if reasonable” is absolute … if not attached to property and properly disclosed via filed with country records, then possibly HOA would not win.

Important rule in most states is ... items attached to property and properly disclosed most likely will win.
DorothyO
(Washington)

Posts:251


02/13/2012 8:48 AM  
As our Constitution, contrary to what many, including our esteemed brethren sitting on our Supreme Court aver, is not written in stone, is meant to be fluid, is not written in "plain" language, and is meant to be interpreted to serve each generation while maintaining its original integrity. It is our toughest, and to those of us who love "figuring *&#% out," our most rewarding challenge. Our country's original governing documents were not voted on by us, and neither were the original governing documents of my HOA, and I suspect many of our associations in which we now live. In fact, they weren't "voted" on by anyone. They were written by Mr & Mrs. Developer before the first lot was sold and built on. They were also written in boiler-plate language, which several other association's governing documents share. As these types of documents are intentionally written in generalities, while still maintaining obvious specifics, it will always be up to those who govern and who are governed to interpret the original language in the way it best serves the community. It cannot possibly be construed that in my traditional rural, agricultural, blue collar community that no trucks for personal use will be allowed. Certainly in the twenty years of existence this "plain?" language covenant has never been enforced as such, nor any absence of enforcement challenged. While the statute "attached to property", is the Big Kahuna, again, there is always that wonderful gem of a spoiler, that which is "reasonable."

Now, it is true, that as a Resolution adopted by this particular Board, it can also be reversed by any consequent Board, hence, the potential for mischief in tinkering with the original documents without full association participation, at the hands of a few self-serving, dim-wits. And because Resolutions are not binding they are not required to be filed in the County Auditor's Office with the CC&R's, and in our case the Bylaws as well. So, any potential homeowner would only get this part of the governing documents via the real estate agent, or the seller, both of whom are given a full copy of all these governing documents as soon as a house is listed. My community is small, only 42 houses, so this is not an onerous task to achieve.

Vaclav Havel declared himself neither an optimist nor a pessimist, because he is not sure everything ends well, or that everything will end badly, but a realist. So, while I am always on high alert for the next possible lawsuit, having complete faith in the feckless nature of most of us, I have also a molecular fealty to the power of reason. Marrying the two for a successful "Union" is our highest task.

DorothyO
(Washington)

Posts:251


02/13/2012 9:07 AM  
P.S. John, I would move to South Carolina in the blink of an eye. I'm a Southern girl at heart, and it's the only place you can get real grits, thank you very much! LOL back atcha.
D
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