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Subject: Bylaws - Modifiable by Board or Membership?
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GeorgeS21
(Florida)

Posts:659


06/12/2018 7:57 AM  
Hi, again, All,

Recall my HOA, of which I am a Board member and Secretary, lost all records from just after the formation (1995) until 2015 - apparently, the President at the time died suddenly and his home was cleared/cleaned by relatives very quickly. Apparently, the Association had been operating under a set of Bylaws dated 1998 - the original Bylaws from the developer were dated 1995. There is no record of the original Bylaws being modified - the 1998 version, according to some of the original residents, "just appeared."

Neither the original Bylaws, nor the 1998 version are noteworthy in any way - differences in the number of Board members (3 with allowance to increase to 10 "from time to time" via a bylaws amendment vs 5-9), approval criteria of future Bylaws (by the Board vs by 3/5 of the community at an annual meeting), annual meetings in original and annual and quarterly meetings in the 1998 version (they MAY have meant Board meetings, but it doesn't say that although it infers it later), quorum (51% of membership vs "by the members present"), little stuff like Sergeant and Arms and Chairman of the Board in the 1998 version but not in the 1995 version, and a big item - the original Bylaws are silent on Board meeting attendance, where the 1998 version notes clearly "The meeting shall be closed to the general membership."

The Board discussed the way forward over two meetings - we searched for any records from any current or past resident and found almost nothing. Accordingly, I volunteered to rewrite (with another volunteer) the Bylaws. The entire Board agreed we should only modify them where there was a legal reason (i.e. excluding members from attending Board meetings), or because something in the 1998 version was grossly inaccurate or uncharacteristic of common accepted Bylaws (i.e. there being positions of Sergeant at Arms or Chairman positions), or to repair language issues. In other words, given the lack of records circumstances, try and maintain the tone of the original and the rewrite, but fix the things that needed to be fixed.

There are a few areas where I could use your input:
1. with 189 single family homes of demographically older residents, what is a good number of bodies for a Board?
2. I would like to specify that only Officers can be on banking authorization lists
3. Should the new Bylaws allow modification by a percentage of the Board, or of the Membership (almost no one attends and remember, this is a VOLUNTARY association (dues are voluntary) and mandatory CCRs
4. What about the quorum requirements? Since so few attend the annual meeting, is it best to simply allow a majority vote of those attending?
5. Should I call out the interval for Board meetings? Having so few as quarterly has allowed this neighborhood to drift off topic and focus - monthly is a way better solution, I think.
6. The 1998 version calls out only the ACC (it is in the CCRs) and an audit committee - should I add in things like Social, Beautification, etc, (we have all of these) that might keep future Boards focused?
7. Should the Bylaws contain reference to Roberts Rules of Order?
8. Anything else you feel is warranted in our circumstances.

Thanks, as always!
AugustinD


Posts:1126


06/12/2018 8:15 AM  
My opinions:
1. either three or five board members
2. I would specify any director or officer may sign checks.
3. To let board's spontaneously change bylaws sounds capricious. Require a membership vote.
4. 20% quorum for member meetings, in person or by proxy. Majority of directors present for board meetings.
5. Monthly, with quarterly report of finances
6. The only committee I would call out is the ACC. Reserve the right for the board to appoint other ad hoc committees from time to time.
7. Yes. Cite the current edition of Roberts Rules as the way meetings will be conducted.
8. Terms of directors? Compensation of officers and directors?

CjC
(Maryland)

Posts:138


06/12/2018 8:24 AM  
We require BOD meetings quarterly, but they are free to meet as often as they like. This way we can skip December (which is too busy to get on anyone's schedule) and usually July when everyone is on vacation. We aren't in violation of the rules this way and can schedule extra as needed.
GeorgeS21
(Florida)

Posts:659


06/12/2018 8:30 AM  
Augustin,

Term is one year and zero compensation.
GeorgeS21
(Florida)

Posts:659


06/12/2018 8:33 AM  
Just occurred to me - given this is a voluntary Association, should I call out what constitutes a Member? (i.e. payment of dues)

Should I call out that Board members must be members of the Association in good standing - i.e. have paid dues? Would they be automatically dropped from Board role, or would it require a vote?
GeorgeS21
(Florida)

Posts:659


06/12/2018 8:50 AM  
OK - here's another interesting item .... do we really want to call something like this out? Seems like this is a legal issue - how would the Board adjudicate if there was a disagreement between JT owners?
++++++++++++
"Section 3. When a lot or house within the subdivision is owned in joint tenancy or tenancy in common, the membership as to such property shall be joint and the right of such membership (including the voting power arising therefrom) shall be exercised only by the joint action of all owners of record of such property within the subdivision."
GenoS
(Florida)

Posts:2430


06/12/2018 11:30 PM  
George, I don't know if this directly applies to your situation but I found it yesterday while searching for something else. You may find it useful if you haven't seen it before. -->Do Voluntary Civic Associations Have Authority to Enforce Their Covenants and Restrictions Over Real Property?<--
GeorgeS21
(Florida)

Posts:659


06/13/2018 7:03 AM  
Thanks, Geno.

Yes, that summary is one if the better written ones. I used it earlier as a reference for board education on the topic.

Our PUD has all the mentioned turnover language from the original declarant, so we are good to go there. We also have about five years to refile to avoid the MRTA issue.
JanetB2
(Colorado)

Posts:4151


06/13/2018 9:49 PM  
Posted By GeorgeS21 on 06/12/2018 7:57 AM
Hi, again, All,

Recall my HOA, of which I am a Board member and Secretary, lost all records from just after the formation (1995) until 2015 - apparently, the President at the time died suddenly and his home was cleared/cleaned by relatives very quickly. Apparently, the Association had been operating under a set of Bylaws dated 1998 - the original Bylaws from the developer were dated 1995. There is no record of the original Bylaws being modified - the 1998 version, according to some of the original residents, "just appeared."

Neither the original Bylaws, nor the 1998 version are noteworthy in any way - differences in the number of Board members (3 with allowance to increase to 10 "from time to time" via a bylaws amendment vs 5-9), approval criteria of future Bylaws (by the Board vs by 3/5 of the community at an annual meeting), annual meetings in original and annual and quarterly meetings in the 1998 version (they MAY have meant Board meetings, but it doesn't say that although it infers it later), quorum (51% of membership vs "by the members present"), little stuff like Sergeant and Arms and Chairman of the Board in the 1998 version but not in the 1995 version, and a big item - the original Bylaws are silent on Board meeting attendance, where the 1998 version notes clearly "The meeting shall be closed to the general membership."

Sorry .. your documents CANNOT violate your State Statues. Most states now require owners to be notified regarding BOD meetings and are allowed to attend.

The Board discussed the way forward over two meetings - we searched for any records from any current or past resident and found almost nothing. Accordingly, I volunteered to rewrite (with another volunteer) the Bylaws. The entire Board agreed we should only modify them where there was a legal reason (i.e. excluding members from attending Board meetings) ... Better check your State Laws because most likely illegal to exclude members from attending your BOD meetings, or because something in the 1998 version was grossly inaccurate or uncharacteristic of common accepted Bylaws (i.e. there being positions of Sergeant at Arms or Chairman positions), or to repair language issues. In other words, given the lack of records circumstances, try and maintain the tone of the original and the rewrite, but fix the things that needed to be fixed.

There are a few areas where I could use your input:
1. with 189 single family homes of demographically older residents, what is a good number of bodies for a Board? I would recommend 5 to 9 with your size of HOA. You always want an uneven number to avoid any tie votes
2. I would like to specify that only Officers can be on banking authorization lists. I would also recommend having two signatures on checks. This helps prevent one person from engaging in any fraudulent activity.
3. Should the new Bylaws allow modification by a percentage of the Board, or of the Membership (almost no one attends and remember, this is a VOLUNTARY association (dues are voluntary) and mandatory CCRs If the original bylaws required membership approval ... potentially that is what I would go with until such point as you have he membership agree to BOD approval. However, this also would depend on your State Statutes and what they state. Potentially you need to seek the advice of an attorney.
4. What about the quorum requirements? Since so few attend the annual meeting, is it best to simply allow a majority vote of those attending? What do your State Laws dictate on this issue?
5. Should I call out the interval for Board meetings? Having so few as quarterly has allowed this neighborhood to drift off topic and focus - monthly is a way better solution, I think. With the size of your HOA quarterly meetings should be fine (unless any emergency arises) ... keep in mind the BOD and your Committees are volunteers and if you abuse them with regards to their free time and have them over extended you will LOOSE those volunteers.
6. The 1998 version calls out only the ACC (it is in the CCRs) and an audit committee - should I add in things like Social, Beautification, etc, (we have all of these) that might keep future Boards focused? LOL ... Do you have VOLUNTEERS for all the committees you want to implement?
7. Should the Bylaws contain reference to Roberts Rules of Order? That would be up to you and whether any violate your State Laws.
8. Anything else you feel is warranted in our circumstances.

Thanks, as always!



JenniferG11
(Texas)

Posts:458


06/13/2018 10:31 PM  
Posted By AugustinD on 06/12/2018 8:15 AM
My opinions:
1. either three or five board members
2. I would specify any director or officer may sign checks.
3. To let board's spontaneously change bylaws sounds capricious. Require a membership vote.
4. 20% quorum for member meetings, in person or by proxy. Majority of directors present for board meetings.
5. Monthly, with quarterly report of finances
6. The only committee I would call out is the ACC. Reserve the right for the board to appoint other ad hoc committees from time to time.
7. Yes. Cite the current edition of Roberts Rules as the way meetings will be conducted.
8. Terms of directors? Compensation of officers and directors?





You referenced above the need for 51% owner approval. That is what our governing documents say is required to change by-laws. To amend the Declaration, our state law says a minimum of 67% but our particular Declaration calls for 75%.

For us it is a massive effort, as you said about yours, few wish to participate, but laws are laws. Changing them by just the board opens you up to suits/breach of contract claims.

GeorgeS21
(Florida)

Posts:659


06/14/2018 8:14 AM  
I left out an item should have included ...that the original Bylaws for which we have an audit trail allow the BOD to modify the Bylaws. The 1998 version dropped this. This may be normal for turnover from a developer to the first Board so the new Board could get things rolling.

Our intent is to ensure we are compliant with state laws (no o, and as aligned as reasonable with the 1998 version, even though we have no idea where they can from. Kinda finding a middle ground.

The community is rather apathetic, partially due to the age demography. Getting 51% of members as a quorum would likely be impossible - perhaps this is why it was dropped in the 1998 version?

By specifically including additional committees, our intent was to increase motivation - see my comments on apathy 😀
RichardP13
(California)

Posts:3057


06/14/2018 8:44 AM  
Posted By GeorgeS21 on 06/14/2018 8:14 AM
I left out an item should have included ...that the original Bylaws for which we have an audit trail allow the BOD to modify the Bylaws. The 1998 version dropped this. This may be normal for turnover from a developer to the first Board so the new Board could get things rolling.

Our intent is to ensure we are compliant with state laws (no o, and as aligned as reasonable with the 1998 version, even though we have no idea where they can from. Kinda finding a middle ground.

The community is rather apathetic, partially due to the age demography. Getting 51% of members as a quorum would likely be impossible - perhaps this is why it was dropped in the 1998 version?

By specifically including additional committees, our intent was to increase motivation - see my comments on apathy 😀



Membership, not the Board, should have final say on modifications to their governing documents, CCRs, Articles of Incorporation and Bylaws. There is a logical reason why the road must be challenging. No different than amending our own Constitution.
JenniferG11
(Texas)

Posts:458


06/14/2018 1:12 PM  
Posted By GeorgeS21 on 06/14/2018 8:14 AM
I left out an item should have included ...that the original Bylaws for which we have an audit trail allow the BOD to modify the Bylaws. The 1998 version dropped this. This may be normal for turnover from a developer to the first Board so the new Board could get things rolling.

Our intent is to ensure we are compliant with state laws (no o, and as aligned as reasonable with the 1998 version, even though we have no idea where they can from. Kinda finding a middle ground.

The community is rather apathetic, partially due to the age demography. Getting 51% of members as a quorum would likely be impossible - perhaps this is why it was dropped in the 1998 version?

By specifically including additional committees, our intent was to increase motivation - see my comments on apathy 😀




I think you might have that backwards? You said originally 'BOD' could modify by-laws by themselves, and that was 'dropped' in 1998, which would mean it reverted to membership approval. I can't see your docs, but the Declarant usually has powers that are not passed on beginning with the first annual meeting and thereafter.

So, when I look at mine, I see several amendments the Declarant made, no approval required, but thereafter it is.

A Resolution can be done w/o owner approval in certain circumstances. Changes required by state and federal law, to correct typographical and similar errors, and to exercise powers directly given in the by-laws.
GenoS
(Florida)

Posts:2430


06/14/2018 2:12 PM  
Is there reason to believe that the 1998 Bylaws were ever officially adopted? Maybe they were proposed but were voted down or failed to gain enough support to pass. Without certainty that the 1998 Bylaws were legitimately enacted, I'd ignore them and work from the originals since there's no doubt that they were, at some point, at least legally in place. If there's no record of the 1998 change then I think they could be considered tainted. They just can't "show up" and have any claim of legitimacy without some other supporting evidence.
RichardP13
(California)

Posts:3057


06/14/2018 2:17 PM  
Posted By GenoS on 06/14/2018 2:12 PM
Is there reason to believe that the 1998 Bylaws were ever officially adopted? Maybe they were proposed but were voted down or failed to gain enough support to pass. Without certainty that the 1998 Bylaws were legitimately enacted, I'd ignore them and work from the originals since there's no doubt that they were, at some point, at least legally in place. If there's no record of the 1998 change then I think they could be considered tainted. They just can't "show up" and have any claim of legitimacy without some other supporting evidence.



Unless the community was still under developer control as the OP alluded to.
JenniferG11
(Texas)

Posts:458


06/14/2018 2:33 PM  
Posted By GenoS on 06/14/2018 2:12 PM
Is there reason to believe that the 1998 Bylaws were ever officially adopted? Maybe they were proposed but were voted down or failed to gain enough support to pass. Without certainty that the 1998 Bylaws were legitimately enacted, I'd ignore them and work from the originals since there's no doubt that they were, at some point, at least legally in place. If there's no record of the 1998 change then I think they could be considered tainted. They just can't "show up" and have any claim of legitimacy without some other supporting evidence.




Yes, here everything has to be recorded at the county or it's invalid. Our docs do not require owner approval for rules and regs changes, as long as they don't change by-laws or the Declaration, but they are still recorded at the county.

JoyceR2
(Virginia)

Posts:128


06/14/2018 5:10 PM  
Check with your county land records. From my knowledge the By-laws should be a matter of record with the county & any changes should be documented & filed with the county to be legal.
GeorgeS21
(Florida)

Posts:659


06/14/2018 8:46 PM  
Turnover to Board from developer normal - Bylaws were included and no issues. Those original bylaws allowed the Board to change the Bylaws.

The 1998 Bylaws were known of by a couple of board members when I joined this year. No one knows how they came to be - records from 1995 to around 2010-2012 completely missing - only some financials from 2012 to 2015. Complete records from 2015. So, the Board decided to amend the original bylaws per the authorization in those original bylaws. That’s what we are working on now.

Neither the original nor the 1998 unknown version is noteworthy or complicated. Biggest issue is to whether to continue to allow the Board to modify future versions or some percentage of a very apathetic voluntary membership. Pros and cons to either. I like membership involvement, but it is more difficult.

Obviously, lots of typos and language usage to be fixed.

There are no bylaws recorded - common now, but not in the 1990s.

JenniferG11
(Texas)

Posts:458


06/14/2018 11:03 PM  
Posted By GeorgeS21 on 06/14/2018 8:46 PM
Turnover to Board from developer normal - Bylaws were included and no issues. Those original bylaws allowed the Board to change the Bylaws.

The 1998 Bylaws were known of by a couple of board members when I joined this year. No one knows how they came to be - records from 1995 to around 2010-2012 completely missing - only some financials from 2012 to 2015. Complete records from 2015. So, the Board decided to amend the original bylaws per the authorization in those original bylaws. That’s what we are working on now.

Neither the original nor the 1998 unknown version is noteworthy or complicated. Biggest issue is to whether to continue to allow the Board to modify future versions or some percentage of a very apathetic voluntary membership. Pros and cons to either. I like membership involvement, but it is more difficult.

Obviously, lots of typos and language usage to be fixed.

There are no bylaws recorded - common now, but not in the 1990s.





Ours were recorded in 1981. As were all amendments by the developer and the BODs that followed. This is not a new trend, it was negligence if anyone failed to do that before. Have you looked at your state laws regarding all these matters?
GeorgeS21
(Florida)

Posts:659


06/15/2018 6:00 AM  
In Florida, it is still not common for Bylaws to be recorded. More are done, now, but certainly not in the 1990s. I’m making this statement from the perspective of three neighborhoods in north Florida as there may be differences in occurrence between different parts of the state and different types and sizes of neighborhoods.

Declarations, CCRs were and are commonly recorded and ours were..
GeorgeS21
(Florida)

Posts:659


06/15/2018 9:12 AM  
Found another item in the 1998 Bylaws that was not in the original Bylaws - under Powers and Duties of the Board of Directors ...

"(h) recommend the purchase or sale of property of the Association to the Members. "

The community has a common area entrance with a sign and some lighting. It also owns (the property holders, not the Association), an approximately one acre park that was deeded to the 189 property holders - it is recorded as an "undivided interest" - and notes also that that it cannot be commercially developed.

Given the above, is there a reason to retain the ability power to recommend the purchase or sale of property?
JenniferG11
(Texas)

Posts:458


06/15/2018 2:48 PM  
It's always recommended to engage an attorney when one wants to amend by-laws.
GeorgeS21
(Florida)

Posts:659


06/15/2018 3:19 PM  
I don’t think an attorney is needed in basic activities like this ...hopefully, we’ll get a clean and simplified set together with lots of critical assessment by the Board.

CC&Rs definitely need legal review!
JenniferG11
(Texas)

Posts:458


06/15/2018 4:24 PM  
Posted By GeorgeS21 on 06/15/2018 3:19 PM
I don’t think an attorney is needed in basic activities like this ...hopefully, we’ll get a clean and simplified set together with lots of critical assessment by the Board.

CC&Rs definitely need legal review!




I feel an obligation to stress that an attorney is needed to make sure that 1) you have the power to amend by-laws w/o owner approval, and 2) that no by-laws or even rules and regs do not run afoul of state law.

There is a lot of hoopla here regarding claims of by-law changes being made w/o proper owner approval and our VP actually wanted to sue the people who made such changes. Breach of contract, I think.

Also if your docs or state laws require any sort of insurance (perhaps not, being an HOA, but if) you wouldn't want to fail to carry whatever that is.
GeorgeS21
(Florida)

Posts:659


06/15/2018 6:36 PM  
Have liability insurance as well as D and C insurance.

Pretty clear we have the ability to amend - we’ve done our homework.

Again, this is pretty basic stuff.

JanetB2
(Colorado)

Posts:4151


06/15/2018 11:05 PM  
Florida State Statutes note for Non-Profit Corporations (which most HOA’s are registered as a Non-Profit Corporation ... are you???)

Title XXXVI
BUSINESS ORGANIZATIONS
Chapter 617
CORPORATIONS NOT FOR PROFIT
View Entire Chapter
617.0206 Bylaws.—The initial bylaws of a corporation shall be adopted by its board of directors. The power to alter, amend, or repeal the bylaws or adopt new bylaws shall be vested in the board of directors unless otherwise provided in the articles of incorporation or the bylaws. The bylaws may contain any provision for the regulation and management of the affairs of the corporation not inconsistent with law or the articles of incorporation.

If the ORIGINAL bylaws provided for “homeowner” approval at an annual meeting or any other such meeting ... then Homeowner Approval will be needed to amend. Sorry the bickering can go on forever ... but no matter what you must abide by the State Statutes.
GeorgeS21
(Florida)

Posts:659


06/16/2018 7:36 AM  
Janet - see the posts in this thread.

The original Bylaws specify the Board to amend. The 1998 unknown source Bylaws specify the Association - in our opinion, these are "tainted" by having zero proof they were approved by ANYONE - i.e. zero records and no one remembers them being updated.

The amendment we are working on is almost exactly the same as the originals - with modifications to ensure we are compliant with Florida law - and, cleaning up some cumbersome language - while increasing the number of Directors from three (original) to five-seven (we haven't decided yet).
JenniferG11
(Texas)

Posts:458


06/16/2018 4:23 PM  
Posted By GeorgeS21 on 06/16/2018 7:36 AM
Janet - see the posts in this thread.

The original Bylaws specify the Board to amend. The 1998 unknown source Bylaws specify the Association - in our opinion, these are "tainted" by having zero proof they were approved by ANYONE - i.e. zero records and no one remembers them being updated.

The amendment we are working on is almost exactly the same as the originals - with modifications to ensure we are compliant with Florida law - and, cleaning up some cumbersome language - while increasing the number of Directors from three (original) to five-seven (we haven't decided yet).




I hope you mean 5 or 7, as you don't want an uneven number. And if you decide on 7, a provision to allow 5, for if you can't GET 7 people. We are in the midst of deciding that too.
GeorgeS21
(Florida)

Posts:659


06/16/2018 8:24 PM  
Yes - odd number!

Five is easier.
JenniferG11
(Texas)

Posts:458


06/16/2018 9:46 PM  
Posted By GeorgeS21 on 06/16/2018 8:24 PM
Yes - odd number!

Five is easier.




Will you expand on your reasons why 5 is better, so I can add them to our discussions here? Some favor the ability to have 7. Because the work is too much for only 5, in their opinion.

The proposal was phrased as minimum of 5, maximum of 7. I asked who would decide at any given election whether we have 5, 6, or 7, and in a case like this year, with 6 total candidates, it seems they'd all be elected if they got at least one vote, then we'd have an even number (ugh) and who would break the ties? They don't know. I think we ought to know before deciding on that. :-)
GeorgeS21
(Florida)

Posts:659


06/17/2018 5:15 AM  
In theory, the smallest odd number would be ideal ...other than 1.

Having work spread makes sense, but that should, in a perfect world, be accomplished by committees vice Board Members.

Five allows all four common Officer positions be Dirctors, as well.

If a larger than 5 or 7 is nominated, then Bylaws could specify that the 5 or 7 with the largest number of votes would be elected.
GeorgeS21
(Florida)

Posts:659


10/16/2018 9:09 AM  
Status!

The Board approved the Bylaws on 2 Oct. It is in the minutes with unanimous vote of a quorum.

We decided to go with a majority of members to amend in the future. Since this is a voluntary HOA, we could not set a specific number. (as an aside re voluntary HOAs, what if we amended the Bylaws every other year? Would generate dues payment in order to be able to vote ;-)?)

I adapted a commonly used form in Florida used to prove who is recording - the usual notarization with names, titles of two Board members, etc. and how it came to be that the Board members were recording the Bylaws, including the date and approval of said Bylaws.

We will get notarized and then record - we discussed whether to record or not, but thought, given the history of the Association and the loss of 15 years of records, that it made sense.
GeorgeS21
(Florida)

Posts:659


10/16/2018 12:33 PM  
BUMP - status added!
GeorgeS21
(Florida)

Posts:659


10/16/2018 12:33 PM  
BUMP - status added!
GenoS
(Florida)

Posts:2430


10/16/2018 7:57 PM  
Good job, George!
GeorgeS21
(Florida)

Posts:659


10/16/2018 8:09 PM  
Any thoughts re the process?
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