What takes precedence when amending the association’s documents? > HOA Forum

Unanswered

Active Topics

Forums

Forums > Homeowner Association > HOA Discussions

Subject: What takes precedence when amending the association’s documents?

Prev Next

You are not authorized to post a reply.

Page 1 of 2

Author

Messages

CharlesW1
(Georgia)

Posts:826

12/07/2007 7:08 AM
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.
Attachment: 11278442171.htm Attachment: 11278453154.doc
Charles E. Wafer Jr.

DonnaS
(Tennessee)

Posts:5671

12/07/2007 7:22 AM
Hello Charles, The second attorney is a specialist and that is what he is hired to do--to get this change done and to do it right. The only thing that I question-(and I am not an expert, that is why I question) is that you are changing your Articles of Incorporation also from a HOA to a POA. That has something to do with the Deeds also and to change any owners deed, I would think that you would need their input. Don't you just hate these people who cannot pay their fees so that they can be counted as a member in good standing of our communities?

RogerB
(Colorado)

Posts:4686

12/07/2007 8:05 AM
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.

CharlesW1
(Georgia)

Posts:826

12/07/2007 8:10 AM
Posted By DonnaS on 12/07/2007 7:22 AM Hello Charles, The second attorney is a specialist and that is what he is hired to do--to get this change done and to do it right. The only thing that I question-(and I am not an expert, that is why I question) is that you are changing your Articles of Incorporation also from a HOA to a POA. That has something to do with the Deeds also and to change any owners deed, I would think that you would need their input. Don't you just hate these people who cannot pay their fees so that they can be counted as a member in good standing of our communities? DonnaS I fully comprehend that he specializing in POAs however, the last attorney hired had also gave the board “legal advice” which had proven to be an invalid interpretation. I’m willing (as the attorney claimed) to amend the covenants based upon his interpretation. I’m just concerned that his interpretation isn’t any more correct, then the last. I posed this very same question to our property manager and he stands by the opinion of the attorney, regardless of what I have told him. I even asked him “what recourse do we have based on the legal advice we receive from the other attorney?” and he told me- “ that this attorney likes to “push the envelope and he is an POA expert were the other attorney was just an HOA attorney”,…………. Oh…….OK, so he knows how to be deceptive and manipulative when reading OUR governing documents. I feel that this attorney is interpretation our governing documents in a way that many are in favor of, not what is legally every Lot owner’s right. I think it is absurd that a lot owner (who is delinquent) has a say in anything involving property values within the community, however is SHOULD be their right as a deeded property owner, because essentially their property values will be effected also. I guess! Chuck W.

Charles E. Wafer Jr.

CharlesW1
(Georgia)

Posts:826

12/07/2007 8:26 AM
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.

Charles E. Wafer Jr.

HaroldS
(Arizona)

Posts:904

12/07/2007 8:47 AM
I don't know why, if your CC&Rs require 2/3 to make changes, but your bylaws do not, and you know the CC&Rs over rule the bylaws, why is your new attorney quoting the bylaws as "gospel"? I would wonder about his "qualifications." Is he just telling the rest of the board what they want to hear? But leaving them open to a lawsuit by ignoring the CC&Rs? It sounds like you are alone in this fight. Good luck. Harold

CharlesW1
(Georgia)

Posts:826

12/07/2007 9:08 AM
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.

Charles E. Wafer Jr.

GloriaM
(North Carolina)

Posts:829

12/07/2007 9:51 AM
Charles: The board upon holding a hearing does have the right to suspend an owners vote. Your second attorney quoting the decrease in the percentage was almost correct. You have to hold the hearings before fines or suspension can be dealt out. We have amended many governing documents and have reduced the 2/3rd using the above legal method.

CharlesW1
(Georgia)

Posts:826

12/07/2007 10:24 AM
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.

Charles E. Wafer Jr.

SusanW1
(Michigan)

Posts:5202

12/07/2007 2:52 PM
I would check your state laws about taking away the voting rights of members. You can refuse them privileges, common area use, and "perks", but voting rights are explicitly tied in with being a "member". I know it does not seem fair, but UNLESS it is stated in your State laws, CCRs, bylaws or covenants that a person who is in arrearage with dues/assessments cannot vote, they retain voting rights. This lawyer is probably banking on the idea that if someone calls an objection to the vote because of a few members not being allowed to vote, the objection has to be at the meeting time when the vote takes place. He is also banking on the idea that those "denied voters" would not have made a difference in the outcome of the motion passing, anyway. 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.

DanaA
(Florida)

Posts:117

12/07/2007 2:58 PM
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!

SusanW1
(Michigan)

Posts:5202

12/07/2007 3:05 PM
Dana, Your board could not vote to NOT put stamps on letters. Why? Because it's a Federal law! The Board could not vote to recind that law or amend it. But the Board could vote to require that all Associaton leters have a stamp, plus a sticker, on the envelope. They got MORE restrictive than the Federal Law. It's a matter of following the HIGHER law, first.

DonnaS
(Tennessee)

Posts:5671

12/07/2007 7:27 PM
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

DanaA
(Florida)

Posts:117

12/08/2007 5:41 AM
Thanks, Donna. I checked our bylaws which were written prior to 720, although we did revitalize our documents last year under 720. Our bylaws state a quorum for the transaction of business as 1/3 of the ownership interests. 1/3 seems awfully low, particularly for amendments, don't you think? However, amendments are specifcally addressed in the bylaws with this quorum. This concerns me. I am thinking out loud here as we are looking at a major rewrite of our documents. We have 175 homes. We could, effectively, if owner apathy prevails and we have a low turnout, have 1/3 of the membership as our quorum, which is approx 58 homeowners of 175, who could vote yes for the rewrite with new and changed CCRs, and it will pass. Majority means 51%, right? If 51% of 1/3 can approve - this is effectively 1/6 of our membership voting yes , which is only 30 homeowners voting yes to pass rewrite- of 175 homeowners. Correct, or am I missing something? Thanks, important. Dana

PaulM
(Pennsylvania)

Posts:1347

12/08/2007 6:48 AM
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!

DonnaS
(Tennessee)

Posts:5671

12/08/2007 1:27 PM
Hi Dana, You are making too much work out of this so lets sort it out. Your Quorum requirements for any meeting is 1/3 or 58 members & proxies to be present to hold your annual or "special meeting" If you have a proper quorum, then you can vote for Board members at an election. Your Annual meeting -- Whoever has the most votes from the quorum present and proxies , is then your winner or winners for the Board positions. Doesn't need more than 1/2 +1 to get voted in (29) is 1 half of the minimum required to attend (quorum) To change the CC&RS, you will need the MAJORITY (because that is what your ByLaws say) of the entire membership. This has nothing to do with a quorum. Your majority of 175 members is 88 positive votes. (175x50% +1) That number then to enact the amendment changes is 88 "YES" votes. 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 If I did not do this clear enough, let me know and I will be happy to rewrite it. I hope that this helps.

SusanW1
(Michigan)

Posts:5202

12/09/2007 1:26 PM
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?

DonnaS
(Tennessee)

Posts:5671

12/09/2007 3:54 PM
Susan, That is correct. There only has to ba a quorum of the Board members. Sometimes, we get only a handful of members to show up but the Board always has things to do and items to vote on. If BOD's had to wait for either a quorum or majority of residents to take any actions, nothing would ever get done.

DonN
(Michigan)

Posts:357

12/09/2007 5:49 PM
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.

Don Nordeen Governance of Property Owners Associations

JoeW1
(New York)

Posts:728

12/09/2007 6:24 PM
Posted By CharlesW1 on 12/07/2007 10:24 AM 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. 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?

CharlesW1
(Georgia)

Posts:826

12/10/2007 4:39 AM
Posted By SusanW1 on 12/07/2007 2:52 PM SusanW1 I will forward your response to my question, to the other board members. I personally will look into the state laws to see “IF” a deeded lot owner has the Right to vote regardless of their financial statue in the HOA. I appreciate the advice as always. Thanks Chuck W.

Charles E. Wafer Jr.

CharlesW1
(Georgia)

Posts:826

12/10/2007 4:58 AM
Posted By PaulM on 12/08/2007 6:48 AM PaulM I understand exactly what you are saying. I appreciate the idea and suggestion. I will certainly look into that possibility also and keep you posted to my findings. Thanks as always Chuck W.

Charles E. Wafer Jr.

PaulM
(Pennsylvania)

Posts:1347

12/10/2007 5:35 AM
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
(Georgia)

Posts:826

12/10/2007 6:50 AM
Posted By DonN on 12/09/2007 5:49 PM DonN GREAT ADVICE, I will certainly look to see “IF” there is any case law provided within my state, first and foremost. Then I will resort to the CCR&E’s for any additional information. I agree with you that amending the governing documents should be at least a majority of the deeded lot owners, but NEVER ALL LOT OWNERS, IMHO! Thanks for “shedding some light” on this particular situation for my community. Chuck W.

Charles E. Wafer Jr.

CharlesW1
(Georgia)

Posts:826

12/10/2007 7:25 AM
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? JoeW1 OH PLEASE, STOP ALREADY! You’re opinion/advice and/or suggestions are always intriguing to read. However, your blatant disregard is very clear to all who read your posts nor is it relevant in any way shape of form. I’m not willing to defend my opinion to you or anyone else, it isn’t worth my time or energy. I have stated (“way back when”) I feel (still feel) that members who are delinquent shouldn’t have a say, that was in reference to quorum, not amending the governing documents. Please refrain from “PULLING” my statements out of context! Maybe I should be a bit more detailed in my posts to avoid this particular confrontation in future posts. Have a pleasant week! Chuck W.

Charles E. Wafer Jr.

JoeW1
(New York)

Posts:728

12/10/2007 8:18 AM
CharlesW1 - If you are going to exclude delinquent accounts from quorum, how do you include delinquent accounts in amending the governing documents? At some point there has to be a concrete resolution rather than constant interpretation, and re-interpretation on the same topic. That is my point regarding my comment to your post. I'd love to see your attorney bill, and to me that is rather annoying and I would not envy living in your association that relies on a PM and attorney so much. Why not just stick to the higher threshold of community input regardless of delinquent or not and simply move on already?

CharlesW1
(Georgia)

Posts:826

12/10/2007 8:24 AM
Posted By PaulM on 12/10/2007 5:35 AM PaulM I too have questioned this very same thing several times. I keep being told by our PM who is consulting by the attorney that the board has the right to restrict any member’s right to vote based upon being delinquent with their assessments and/or fines.(as stated in our By-laws) That is exactly how I’ve interpreted what is written, but my interpretation isn’t favored among the other board members or property manager. Too clarify, what is stated in the By-laws CANNOT be used to amend the CC&R or can they?! I wouldn’t think so, but then again I’m not an HOA/POA attorney or PM, just a volunteer BOD. Thank as always Chuck W.

Charles E. Wafer Jr.

RogerB
(Colorado)

Posts:4686

12/10/2007 8:48 AM
Chuck, one more time. The Board can restrict a MEMBERS right to vote; they can not restrict an OWNERS right to vote on amending the Declaration. The By-laws can not be used to amend the Declaration. The By-laws can only used to amend the By-laws. The Declaration is used to amend the Declaration unless there is no amendment process specified in the Declaration. If not specified the process is defined by the state or a court.

CharlesW1
(Georgia)

Posts:826

12/10/2007 9:14 AM
Posted By JoeW1 on 12/10/2007 8:18 AM CharlesW1 - If you are going to exclude delinquent accounts from quorum, how do you include delinquent accounts in amending the governing documents? At some point there has to be a concrete resolution rather than constant interpretation, and re-interpretation on the same topic. That is my point regarding my comment to your post. I'd love to see your attorney bill, and to me that is rather annoying and I would not envy living in your association that relies on a PM and attorney so much. Why not just stick to the higher threshold of community input regardless of delinquent or not and simply move on already? JoeW1 As I have previously posted. I feel that those at an annual meeting should constitute quorum. In other words those present, if ONLY 2, then so be it. But the BOD shouldn’t have to acquire 25% present of eligible votes present or by proxy, to have an annual meeting to elect a new BOD, that is just absurd! IMO As far as amending the governing documents. I’ve always interpreted them the same way, from the very begin. We consult our HOA attorney whenever we feel it is necessary, besides we’ve paid a retainer which entitles us to ask for legal advice as often as necessary. We can ask as many questions without incurring additional expenses. So we will continue to ask for such legal advice as long as we are not charged any additional fee’s on top of the retainer fee. The BOD has made every attempt to “give the resident what they want” which is an increase in their property values and I (and the board) feel that opting from an HOA to a POA will help with such requests. Thanks for the clarification. Chuck W.

Charles E. Wafer Jr.

CharlesW1
(Georgia)

Posts:826

12/10/2007 9:37 AM
Posted By RogerB on 12/10/2007 8:48 AM Chuck, one more time. The Board can restrict a MEMBERS right to vote; they can not restrict an OWNERS right to vote on amending the Declaration. The By-laws can not be used to amend the Declaration. The By-laws can only used to amend the By-laws. The Declaration is used to amend the Declaration unless there is no amendment process specified in the Declaration. If not specified the process is defined by the state or a court. RogerB That is exactly what I have been proclaiming to the other board members, for months, but since I’m not an attorney, my opinion doesn’t seem to matter much. I have even when to the extent of discussing the matter with the HOA president, in hopes she would address my concerns to the PM, who then could question the HOA attorney, but that hasn’t helped either. Thanks for that clarification; I expected that a long time ago. Chuck W.

Charles E. Wafer Jr.

You are not authorized to post a reply.

Page 1 of 2

Forums > Homeowner Association > HOA Discussions > What takes precedence when amending the association’s documents?