Get 2 months of free community web site hosting from Community123.com!
Tuesday, August 20, 2019
Get 2 months of free community web site hosting from Community123.com!
Only members have access to all features.
Click here to join HOATalk for Free! Members click here to login and access all features.
Subject: Adopting New Covenants vs. Amending Current Covenants
Prev Next
Please login to post a reply (click Member Login on the menu).
Author Messages
ChadH3
(Alabama)

Posts:3


07/16/2019 4:53 PM  
Does anyone have any experience adopting a completely new set of covenants rather than amending the original document?

We're a fairly large subdivision, currently around 350 lots (the Master Plan calls for around 600 lots if the development is built out to completion). We're still operating off of the original covenants, by-laws, and articles of incorporation that were set by the developer.

There are some ticky-tack things that we, as a board, would like to see removed but one of our larger issues is the way the current covenants are written the ACC is made up solely of the developer (and anyone he appoints) and the ACC has the right to waive any violation of the covenants. So essentially developers can do whatever they want to and we don't have the power to enforce covenants on them. Another issue is the original developer isn't building houses any more but selling land to other developers to build on and us not having control of the ACC could present issues.

Our covenants require 2/3 of lot owners approval to amend the covenants. However, our by-laws state that 20% of members constitute a quorum and the vote required to transact business is set at a majority of that quorum. In my interpretation of the by-laws, we could theoretically vote to adopt a new set of covenants that would replace the current version with a simple majority vote at a meeting where a quorum is achieved.

Would certainly appreciate anyone's thoughts and past experience. Thanks!
MelissaP1
(Alabama)

Posts:8396


07/16/2019 5:23 PM  
I don't think you need to reinvent the wheel here. We were able to remove all references to the developer in our documents. Where necessary it was replaced by the board. As in the final decisions of the ACC could be overturned by the board if need be. We also eliminated the 2 type voting system of A and B. One vote per owner/member.

Our documents made it a requirement to have a special meeting to take a vote to change our documents. We were able to circumvent that by drafting an additional form. It had on it that you agree to give up your right to vote at a special meeting. That way we could collect votes outside of that requirement and go door to door.

Do not use a Real Estate Attorney. You are dealing with a non-profit corporation. So it's best to deal with a lawyer familiar with corporate laws than real estate. You will need a lawyer not only to help draft changes but to assist in filing. There are filing fees associated with making the changes. Of course cost of reproducing may need to be factored in if wanting to give hard copies or electronic. Although CC&R's and Articles of Incorporation are considered PUBLIC documents. By-laws are internal and can be filed with the CC&R's if you all want to.

I'd have a separate sheet just covering the list of changes being made. It's much easier for people to read than whole documents.

Former HOA President
DouglasK1
(Florida)

Posts:1428


07/17/2019 5:53 AM  
Covenants are attached to a deed, you can't attach new ones without the property owner's (and possibly mortgage holder's) permission. If you want changes, you need to amend the covenants using the procedure they provide.

Escaped former treasurer and director of a self managed association.
ChadH3
(Alabama)

Posts:3


07/17/2019 7:23 AM  
Posted By DouglasK1 on 07/17/2019 5:53 AM
Covenants are attached to a deed, you can't attach new ones without the property owner's (and possibly mortgage holder's) permission. If you want changes, you need to amend the covenants using the procedure they provide.



That makes sense however the future phases are not currently platted out by the City and while the developer still owns that land is not currently part of the HOA. The current process is when he plats the next phase, that phase is then annexed into the HOA. So currently the "property owner" is made up of homeowners and all the common areas have been deeded to the HOA. This development is 15 years old which I see now that I didn't include in the original post. We are several years removed from the Declarant Control Period.
DouglasK1
(Florida)

Posts:1428


07/17/2019 8:12 AM  
The covenants are usually attached to the deed when the developer subdivides a larger property into lots. At that point the developer still owns the lots, and most likely would not accept new covenants to be attached. When the lots are purchased by owners, they have the existing covenants, and again, an outside party (the HOA) can not unilaterally attach new covenants.

Escaped former treasurer and director of a self managed association.
JohnC46
(South Carolina)

Posts:8550


07/17/2019 8:33 AM  
Chad

% needed for a quorum is one thing but typically to change a Covenant/Bylaw the % called for is that % of all owners, not just those at a meeting unless every owner was at the meeting.

The 2/3rds you mention is 2/3rds of all owners, not just those at a meeting, approving as in voting yes. 2/3rds of 350 is 234 so 234 would have to vote yes.

George made a good point. Your developer probably has a voting right for the lots (one vote per lot) they own. In your case it could be you need 2/3rds of 600 with the developer having 250 votes. The developer is the one that can swing the vote.
ChadH3
(Alabama)

Posts:3


07/17/2019 8:54 AM  
Posted By JohnC46 on 07/17/2019 8:33 AM
Chad

% needed for a quorum is one thing but typically to change a Covenant/Bylaw the % called for is that % of all owners, not just those at a meeting unless every owner was at the meeting.

The 2/3rds you mention is 2/3rds of all owners, not just those at a meeting, approving as in voting yes. 2/3rds of 350 is 234 so 234 would have to vote yes.

George made a good point. Your developer probably has a voting right for the lots (one vote per lot) they own. In your case it could be you need 2/3rds of 600 with the developer having 250 votes. The developer is the one that can swing the vote.



Hi John, Thanks for your reply!

Our By-Laws state quorum is 20% of members and the vote required to transact business is a majority vote with a quorum present. As far as our HOA is concerned the 250 some odd future lots are irrelevant because those lots have not been platted with the city and are not in the county deed book. Right now they're just a few large pieces of property that border the current subdivision but have yet to be subdivided and annexed into our HOA. So the developer, as it stands today, doesn't have much voting power at all. If he were to get those other phases all platted, then it would be a different story but then he would also be paying much more dues which I don't think he can afford to do right now.
JohnC46
(South Carolina)

Posts:8550


07/17/2019 11:06 AM  
Chad

Needing 20% of members for a Quorum to be able to conduct business is quite common and identical to ours. Conducting business means BOD Elections, making financial reports, Committee Reports, Q&A with the BOD, etc. It does not mean changing Covenants nor Bylaws.

To change Covenant or Bylaws you need 2/3rds of all owners voting yes.
Please login to post a reply (click Member Login on the menu).
Forums > Homeowner Association > HOA Discussions > Adopting New Covenants vs. Amending Current Covenants



Get 2 months of free community web site hosting from Community123.com!



News Articles Provided by: Community Associations Network
News, articles and blogs about condos/HOA's

Only members have access to all features.
Click here to join HOATalk for Free! Members click here to login and access all features.







General Legal Notice:  The content of forum messages are from the posting member and have not been reviewed nor endorsed by HOATalk.com.  Messages posted by HOATalk or other members are for informational purposes only, are not legal or professional advice and do not constitute an attorney-client relationship.  Readers should not act upon this information without seeking professional counsel.  HOATalk is not a licensed attorney, CPA, tax advisor, financial advisor or any other licensed professional.  HOATalk accepts ads from sponsors but does not verify sponsor qualifications nor endorse/guarantee any sponsor's product or service.
HindmanSanchez Legal Notice:  (For messages posted by HindmanSanchez) This message has been prepared by HindmanSanchez for informational purposes only and does not constitute legal advice. This information is not intended to create, and receipt of it does not constitute an attorney-client relationship. Members of HOATalk.com should not act on this information without seeking professional counsel. Please do not send us confidential information unless you speak with one of our attorneys and get authorization to send that information to us. If you wish to initiate possible representation, please contact an attorney in our firm. Our attorneys are licensed to practice law in the state of Colorado only.

Legal Notice For Messages Posted by Sponsoring Attorneys: This message has been prepared by the sponsoring attorney for informational purposes only and does not constitute legal advice. This information is not intended to create, and receipt of it does not constitute an attorney-client relationship. Readers of HOATalk.com should not act on this information without seeking professional counsel. Please do not send any sponsoring attorney confidential information unless you speak with the sponsoring attorney or an attorney from the sponsoring attorney’s firm and get authorization to send that information to them. If you wish to initiate possible representation, please contact an attorney in the firm of the sponsoring attorney. Sponsoring attorneys that post messages here are licensed to practice law in a specific state or states as indicated in their message signature or sponsor’s profile page. (NOTE: A ‘sponsoring attorney’ is an attorney that is a HOATalk.com official sponsor and is identified as such in the posted message or on our sponsor page.)

Copyright HOA Talk.com, A Service of Community123 LLC ( Homeowners Association Discussions )   Terms Of Use  Privacy Statement