What takes precedence when amending the association’s documents?

For the pass year and half (1½), I have read (on this discussion forum) what I believe to be the correct order of precedence, in which associations are expected to follow when conducting association business. (Amending the governing documents)

PLEASE, correct me “IF” I’m wrong.(Apparently I don’t have a clue) State law has “weight” over any and all governing documents and the CC&R supersedes the By-laws and RR. Therefore “IF” the Bylaws (lower percentage) states who is eligible to vote on a particular subject matter and the CC&R (greater percentage), which would the board be duty-bound to follow?

Our association has been working very diligently to become a POA (as many of you may know). The BOD and the majority of the residents feel that proceeding forward will, help to increase property values and benefit those who own property here, for many years to come. Except those (Lot owners) not eligible to cast a vote (members not in good standings) who will essentially vote against all purposed amendments, because the purposed amendments have a direct affect on their particular life style.

Our first attorney told the board (which we conveyed to the community) that to amend the CC&R we must receive 2/3 approval (I agreed with), by written ballot (as stated in the CCR&E) from the total association to proceed, when opting from HOA to POA.

We recently hired a new HOA attorney (specializes in Property Owners Associations) His interprets the governing document was that the board can exercise its right to suspend any Lot owners right to vote, (attached) if we so choose, (according to the By-laws) therefore not requiring the board to receive ballots from 2/3 of the total association. (186 lot owners)

As much as the attorney’s advice would benefit the board’s ability to promote the POA, I personally don’t feel that his interpretation is correct. What can I do? I have spent many hours online looking for help and reading our governing documents, attempting to gather PROOF to present to the PM and the other two board members of his misinterpretation?

I certainly don’t have the “legal interpretation” the attorney has conveyed. I’m just ONE homeowner/board member without the ability to provide legal advice; therefore the board is likely to adhere to the advice received by the attorney.

I would appreciate any information as too the clarification of our HOA attorneys advice.

What can, the BOD do, is there any thing we can do? Should we continue collecting ballots from ALL lot owners or can we/should we collect ballots from ONLY eligible voters as stated in the governing documents.

I’ll spend a considerable amount of time reviewing/re-reading previously written post pertaining to this particular subject (looking for help) as I’m familiar with the fact that this subject has been discussed previously. I myself have questioned several times before.

Thank you all as always.
Chuck W.

Chuck, to amend the Declaration I recommend getting 2/3 of every owner of record. The By-laws deal with members, not owners. So when voting for items related to the HOA those not in good standing may not count. But when dealing with owners every owner has the right to vote on amendments which affect their deed.

RogerB

That is my sentiments exactly. With what I have learned from all of you and from reading the governing documents myself, I believe that ALL deeded lot owners are eligible to vote regardless of their delinquent statue, however the PM, the other board members and the attorney thinks otherwise. They are ready to count those ballots we have received thus far and APPROVE the POA, which is ultimately what I want as well, BUT I don’t believe it will be legally amended.

I don’t want our procedure to be of any question in later years, which is why I continue to question his advice.

Thanks for the confirmation.
Chuck W.

HaroldS

Apparently our new attorney has been told (by PM) how difficult of a time we have had collecting ballots from members of the community. (for or against)

The attorney has told our PM, “Let’s see someone challenge me on it?” He is interpreting our governing documents in a way that is favored by the majority of homeowners; otherwise he wouldn’t be as confident as he is to proceed with his interpretation, expect me and those it will directly affect!

It’s obvious to me, that “I’ve brought a knife to a gun fight” I feel that amending our covenants will indeed prosper the majority of lot owners. I just don’t want to achieve our long term goal illegitimately.

Thanks
Chuck W.

GloriaM

From what I’m to understand is that he is saying that because the board has the right to suspend their voting privileges for not being a member in good standings, which will lessen the percentage needed to amend the governing documents.

I understand and some what agree with his philosophy, however I don’t feel it is legal.

Thanks for you input
Chuck W.

Susan, I have a question re: From SusanW: "PS - Bylaws can be MORE restrictive than State, but not less. So if the State says that amendments must pass by 2/3 vote, the bylaws can't say simple majority." Susan, do you know if this law/rule applies to all states, even Florida? Thanks for your help!

Hi Dana,
What the State Statute says is that -720;306-- "Unless otherwise provided in the governing documents or required by law, and other than those matters set forth in paragraph (c), any governing document of an association may be amended by the affirmative vote of two-thirds of the voting interests of the association".

The key word and your answer is the word "UNLESS" If you have less than 2/3rds in your ByLaws, then that is within the Statutes allowances

Charles: Without adding to the confusion of 'who can vote' and 'who cannot vote' when amending the CC&Rs, I want to offer you something to check in your docs which should help.

Just to confirm that the Association document, the Declaration, is a legally filed document with the state/county in which you reside. The Declaration runs with the legal deed of the Unit Owner. When reviewing the Declaration portion of your CC&Rs be diligent to see if it states ...to AMEND the Declaration (the proposal must be presented) to ALL UNIT OWNERS. A unit owner is always a unit owner; however, he may not be a 'member in good standing', which is not the concern for this situation.

When you hold the vote (either by meeting, or mail/proxy), then it must be determined what PERCENTAGE is required for an amendment change to PASS. If it's simple majority of what votes have been received, then that's easy; if the DECLARATION DOC speaks to ...'may be amended by the vote of Unit Owners holding a percentage of the votes', that's where the proxies are useful to gain the 'magic number' of Yes votes to pass. Our doc states 67% of Unit Owners/votes in the Association to pass.

There may be some confusion with the percentage of members in good standing vs. all members having the right to vote. But if the document states UNIT OWNERS, there is no question that All (one vote per Unit) are to be given the right to vote.

I have been reading and re-reading our own Declaration and this is what I am passing on to you; however, we're not in Georgia. I personally would review your Declaration carefully, bring it to the rest of the Board, and then speak to the attorney with your findings. Once the attorney states HIS legal counsel along with what the State of Georgia dictates on amending the DECLARATION, formally request that he put his findings and the process for you to follow in writing to the Board/Association, and move forward knowing that you have covered all bases.

This project, for you, has been a long time 'in labor' and still, it has not been 'birthed', but with your persistence, you will succeed. I wish you Good Luck!

Donna,

You said - "Now, regular Board meetings like monthly do not need any quorum or numbers present so ignore any of that for a quorum. If 2 or 3 attend, that is okay"

Did you mean to say that Board meetings do not require a quorum to conduct business?

CharlesW1

The amendment requirements for the CC&R should be stated in the document itself. Normally, the language is strictly interpreted, meaning that the words say what they mean and no more or less.

If the CC&R does not define the amendment requirements, there may be a default requirement in statutory or case law in your state.

The state law might have two different forms: one, to define minimum requirements; or two, defining default requirements unless otherwise specified in the CC&R.

My recollection of case law in several states and in legal literature is that for an amendment to be binding on all owners, it must be approved by at least a majority of owners. Your state might be different.

If none of the above exists, the association should consider filing a declaratory action in Circuit Court to seek a court determination of amendment requirements.

Normally, bylaws are subordinate to the CCR&E and therefore cannot be used to define the amendment requirements of a superior document.

The advice of your new attorney needs careful inquiry. Ask the attorney to identify the statutory and case law to support the opinion given. His advice should argue both pro and con for what is being recommended. It should also include the likely ruling of a court of appeals if litigated by a group of owners/members. Unless the board is specifically granted the authority for amendment you describe in the CC&R or the law, I guess is that the board wouldn't have a leg to stand on. But of course, the attorney would continue to collect more fees for defending the prior advice.

Charles: I do not understand why the Board and the legal counsel cannot read clearly and understand what your own official documents state. The attachment you have posted does not leave it to be questioned.

..."this Declaration may be amended upon the affirmation vote or written consent of the OWNERS OF AT LEAST TWO-THIRDS (2/3) OF THE LOTS AND THE CONSENT OF THE DECLARANT. Amendments to this Declaration shall become effective upon recordation unless a later date is specified therein. The consent of the Declarant to any amendment shall be evidenced by the execution of said amendment by Declarant.
The consent of the REQUISITE NUMBER OF OWNERS TO ANY AMENDMENT SHALL BE EVIDENCED BY THE EXECUTION OF THE AMENDMENT BY SAID OWNER, or, in the alternative, the sworn statement of the President or any Vice President or the Secretary of the Association attached to or incorporated in the amendment, which sworn statement states unequivocally that the consent of the required number of Owners was obtained and that any notices required by this Declaration, the Bylaws, the Articles of the Incorporation and the Georgia Law were given."

Based on the above, I, personally, would not pay from assessment funds to an attorney who insists on not following what is clearly stated as to who is eligible to vote to change the Declaration--OWNERS OF RECORD/DEED HOLDERS. Eligibility to amend the Declaration is based on being an owner, period. End of story.

CharlesW1 - Gotta tell ya, I'm a bit tired of all this. You now say that you don't feel that lessening the percentage needed to amend the governing documents is legal, or something to that effect. Didn't you start out on HOAtalk, way back when, that it wasn't right for people who weren't current to have a say?