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Subject: Changing cc&r's and bylaws
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garry
(California)

Posts:1


07/27/2005 9:59 AM  
Hi Everyone,

I'm wondering if anyone has information about how an association would go about changing the the CC&R's of the complex to prohibit, or limit the number of rentals allowed in the complex. I've been told that if the number of rentals exceeds 20% of the total units in the complex, banks will not lend to borrowers interested in purchasing a unit that might be for sale in your complex. What is the procedure an association must follow to legally change their position regarding renters,and make it part of the R&R's of the association?
hoatalk
(California)

Posts:572


07/27/2005 2:35 PM  
Not trying to give legal advice, but here's some info to get you started: Your association's recorded Declaration should have a procedure for additions and modifications. An example I have seen is one that says amendments can only be made with approval of 80%, or more, of the home owners. Others go so far as to require the mortgage companies holding loans on the units to also approve any changes.

Your state laws also come into play, as to what you may or may not restrict (since homeowners rights come into play).

Have a look at this news article for an example of a case in Arizona:
http://www.kpho.com/Global/story.asp?S=3609446&nav=23KucHF4

Also look out for city rules as well:
http://indyweek.com/durham/2004-05-26/triangles2.html
http://www.statenews.com/article.phtml?pk=28689

So, the first step is to review the recorded documents of your association and find the amendment procedure. If you decide to proceed, you will definitely need to work with an attorney on this one.

Finally, here's a clip from the Washington Post, as well:

From: http://www.washingtonpost.com/wp-dyn/content/discussion/2005/04/14/DI2005041903130.html
"Washington, D.C.: My building recently went through a condo conversion (for lack of a better term, long story). Anyway although there were bylaws in place when we set out on this little venture, the Condo Assoc. is trying to come up with some new "rules" and bylaws. I'm on a committee about limiting rentals. First, does it matter to limit rentals and if so, is there a suggested cap? We're considering no more than 1/3 be rented at one time and that when someone moves out of a currently rented unit, that unit move to the end of the que for rentals, thus avoiding too many investor/non-resident owners. Does this make sense?
Maryann Haggerty: First: Consult with the association's lawyers to make sure you do everything absolutely by the book. Yes, it makes sense to limit rentals, if that is what owners want to do. Lenders shun buildings with too many rentals. In fact, 1/3 is probably too many. "

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JaimeW
(North Carolina)

Posts:24


08/14/2005 9:40 AM  
Being in the property management field I have seen many CCR's that state you have to have 67% membership approval to make changes. You have to prepare a document with what they state now and what you want them changed to say and supply this to each homeowner. Also, in most cases you will need to get the signature of each person that is recorded on the deed for the property. I have also seen where the signatures need to be notarized. This is where a committee is helpful in order for volunteers to walk around the communtiy getting signatures.

The answers on how to change the CCR's is in your documents.
AudreyB
(Florida)

Posts:104


08/19/2005 7:28 PM  
Jamie,

Please help me clarify what you said, I'm trying to understand. Your not suggesting volunteers walk around their communties to get signature votes are you?

Aren't 67% membership approval to make changes, to take place either at an annual or a special meeting? Not by walking the community getting sinatures for votes?

Are such door-to-door votes acceptable? My By-Laws say annual meeting or special meeting, to put forth a motion, to form a quorum to obtain 67% for amending the Articles of Incorporation and 2/3 for amending the By-Laws. No mention of door-to-door votes.

You say prepare a docuemtn with the state. What document is that? Where do you get one?

Then, rereading what you said, I think I understand, the signatures are need to make sure the homeowner's want those changes, and what the changes are to say, and to supply this to each homeowner. Before or after the vote? If the homeowner did not get a copy of what those changes are to say what can a homeowner do?

What is the proceedure to notify the homeowner's for a special meeting? Is certiefied mail required?

Thank you, Jamie,
Audj
KarenW
(Utah)

Posts:2


10/26/2005 7:10 AM  
I'm in Utah and on the Board. We are currently undertaking on the job of attempting to change our CC&Rs to restrict the number of rental properties within our 150+ home community in a beautiful golf course community.

The advice so far is right on in that your CC&R's/by-laws should guide you in the percentage of home/property owner positive votes needed in order to radify a change. Unfortunately getting any CC&R changed seems to be very difficult, not due to the technical difficulty of paperwork (registering the CC&R change) but to get the home/property owners to actually cast a vote. We have many owners that live out of state and use the property as a vacation home. We currently have a CC&R that says a property can not be rented for less than 30 days, which stops any thought of B&Bs or weekend rentals. However we have found having approximately 10% of our community as rental, our greatest number of issues and violations have come from the rental units. We held informational meetings to cover exactly what the Board was proposing and we have mailed out the ballots and actual language change...We also have a group of volunteers that are going door to door to follow up with our residents to ensure they have received the information and really encourage them to return their vote. However, we are really struggling with residents to get the needed vote in (either in favor of or against the proposal).

So as you go forward with this, understand it is not a simple task...but certainly worth the effort.
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