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Subject: Waiver of Bylaws
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Author Messages
NicoleC5
(Arizona)

Posts:23


12/20/2019 3:12 PM  
Hello Members,

I am writing from the state of Arizona. Our community has been missing bylaws for about ten years and we have been conducting our HOA business without their guidance for an equal amount of time. My question is, recently an owner found the bylaws and want's the community to abide by them. Did our community waive our rights to bylaws? Do these bylaws govern? Do we need to restate them? If we restate them do we need membership approval because it would be considered an amendment? Any insight would be helpful.

Thank you.
JohnC46
(South Carolina)

Posts:9660


12/20/2019 3:15 PM  
Nic

My first blush is if they apply/fit then use them even if a bit different than how you have been running things.
MelissaP1
(Alabama)

Posts:9444


12/20/2019 3:41 PM  
By-laws are typically INTERNAL documents of the HOA. They do not require to be filed in many states. Easily changed and adaptable.

Now you could be referencing to "Covenants & Restrictions" or what is called "CC&R's". Those are similar but different than by-laws. CC&R's run with the title. They do require being filed with the county. The document is also considered PUBLIC. Which means they should be available at the local courthouse in the records department. Sometimes can find them online. The By-laws may be filed with them if your lucky.

The Articles of Incorporation is how the HOA is incorporated. That is also a PUBLIC document. It is filed at the STATE level. Which they may also post them online to be viewed. A HOA can be non-profit or a for-profit corporation. Most are non-profit.

So what are you referencing? Have you read them and seen how your HOA can make changes? I would consult a lawyer on formerly changing and filing them. No reason the HOA can't modify them per the requirements to be changed. Do not use a Real Estate attorney. Best to use a Lawyer familiar with HOA or contractual/corporate laws.

Former HOA President
CathyA3
(Ohio)

Posts:1116


12/20/2019 3:55 PM  
Do you mean reINstate them?

I don't think you need to. Bylaws don't change unless HOA takes steps to modify them, which you have not done. They've been in effect as written all of this time. The only reason to take any action is if you believe that the bylaws are out of date and need to be modified.

If they're OK, I recommend putting copies on your community web site, if you have one, along with copies of the CC&Rs so that any homeowner can see them. You may also want to put something about this in your minutes and note that, now that the text of the bylaws has surfaced, the board will conduct future business in accordance with them.
CathyA3
(Ohio)

Posts:1116


12/20/2019 3:59 PM  
Posted By CathyA3 on 12/20/2019 3:55 PM
Do you mean reINstate them?

I don't think you need to. Bylaws don't change unless HOA takes steps to modify them, which you have not done. They've been in effect as written all of this time. The only reason to take any action is if you believe that the bylaws are out of date and need to be modified.

If they're OK, I recommend putting copies on your community web site, if you have one, along with copies of the CC&Rs so that any homeowner can see them. You may also want to put something about this in your minutes and note that, now that the text of the bylaws has surfaced, the board will conduct future business in accordance with them.




Forgot to add: I assumed that your bylaws don't have any kind of language stating that they expire after some time period unless renewed. If there's nothing like this, you should be fine.
NicoleC5
(Arizona)

Posts:23


12/20/2019 3:59 PM  
Im sorry yes, i did mean reinstate them.

My concern for wanting to do so is because they have been out of circulation for so long, and owners come and go, is that we would be changing contractual rights with owners. My initial thought is to have approval from the community, one because they are outdated, and two because it would significantly change the internal operation of business.
CathyA3
(Ohio)

Posts:1116


12/20/2019 4:02 PM  
Posted By NicoleC5 on 12/20/2019 3:59 PM
Im sorry yes, i did mean reinstate them.

My concern for wanting to do so is because they have been out of circulation for so long, and owners come and go, is that we would be changing contractual rights with owners. My initial thought is to have approval from the community, one because they are outdated, and two because it would significantly change the internal operation of business.




OK, I change my answer. You have good reasons to both update the bylaws and get the community involved.
NicoleC5
(Arizona)

Posts:23


12/20/2019 4:05 PM  
Every owner has been supplied with the CCR's but the bylaws have not been circulated within the community for about ten years. Owners come and go, and we have been operating without them and following a more relaxed approach. The reason why I believe they should be reinstated is because it significantly changes the operation of internal business. We haven't had a proper election in years, because our community has always operated "if you want to be on the board, you're on the board." I feel like the approach should be as if we are adopting new bylaws that need to be approved by the community so everyone is aware of the contractual change within the community.
CathyA3
(Ohio)

Posts:1116


12/20/2019 4:12 PM  
Posted By CathyA3 on 12/20/2019 4:02 PM
Posted By NicoleC5 on 12/20/2019 3:59 PM
Im sorry yes, i did mean reinstate them.

My concern for wanting to do so is because they have been out of circulation for so long, and owners come and go, is that we would be changing contractual rights with owners. My initial thought is to have approval from the community, one because they are outdated, and two because it would significantly change the internal operation of business.




OK, I change my answer. You have good reasons to both update the bylaws and get the community involved.




Golly, I need to quit clicking before I stop thinking. :-)

In your position I would be thinking exactly as you are. If you're going to be updating your bylaws, you'll need to get the association's attorney involved at some point. He/she can make sure the new bylaws comply with state law and that they're written in proper legalese so that they're enforceable. It's OK to get feedback from the community. Most homeowners lack the expertise to draft new bylaws themselves, but they can offer opinions on what they think works well now and what they would not want from your out-of-date bylaws.
NicoleC5
(Arizona)

Posts:23


12/20/2019 4:15 PM  
Hahahahah...there are just so many scenarios to think of its hard to keep track. However, I believe that transparency is always the better option when it affects so many people. I am an individual that believes the BOD works for the owners, and if you're not working for them you're in the wrong business. There are also so l little rights for homeowners these days, its nice to give back when you can. Its tough business trying to keep everyone happy, but in democracy majority rules.
GeorgeS21
(Florida)

Posts:2890


12/20/2019 4:18 PM  
In my opinion, you should be very pleased you have turned up your Bylaws - they are still your Bylaws.

Just get less relaxed. Btw, I would consider relaxed to be a scary word wrt to HOAs.

Once you get structure back, then consider changing your Bylaws if needed.



NicoleC5
(Arizona)

Posts:23


12/20/2019 4:20 PM  
To be completely honest I am not happy they turned up at all. I would have liked to start from scratch because sometimes working with a clean slate is easier than a complete remodel. It would be so much easier to adopt new bylaws that fit the communities needs now.
CathyA3
(Ohio)

Posts:1116


12/20/2019 4:35 PM  
Posted By NicoleC5 on 12/20/2019 4:20 PM
To be completely honest I am not happy they turned up at all. I would have liked to start from scratch because sometimes working with a clean slate is easier than a complete remodel. It would be so much easier to adopt new bylaws that fit the communities needs now.




I hope a lawyer or two comments, but I vaguely remember seeing instances where courts have said that the way things had been done for years basically became "the law". Sort of the same concept as common law. Which would support the idea of continuing to do things as you've been doing them while you work to re-write the bylaws. It may be worth asking the question of someone who knows before you upend your normal procedures.
GeorgeS21
(Florida)

Posts:2890


12/20/2019 4:38 PM  
Nicole,

Nice try. While it would be easier (an opinion) it would not reflect the truth that even you accept, which is that the Bylaws have been found.

Make it easy, unassailable and fair ... just start running your community in accordance with your Bylaws and then determine what, if anything, needs to be done.

Btw - please give us a rundown or what would change? Be as specific as possible.
GeorgeS21
(Florida)

Posts:2890


12/20/2019 4:38 PM  
Whoops - sorry.

Did you say you were a board member?
NicoleC5
(Arizona)

Posts:23


12/20/2019 4:44 PM  
Hi George,

I’m not sure what you mean by “nice try.”

And to tell you the truth I don’t accept them as our governing bylaws because when I bought units in the building the only governing document I received were the CCR’s. Those rules our association do follow.

What I believe in is complete transparency and I think all owners have the right because we have waived our rights to determine the best way our association should be ran to create and promote harmony amongst the members.

AugustinD


Posts:3647


12/20/2019 4:46 PM  
Posted By NicoleC5 on 12/20/2019 3:59 PM
Im sorry yes, i did mean reinstate them. My concern for wanting to do so is because they have been out of circulation for so long, and owners come and go, is that we would be changing contractual rights with owners. My initial thought is to have approval from the community, one because they are outdated, and two because it would significantly change the internal operation of business.
I echo what GeorgeS21 said. In particular:

-- By using the actual, original Bylaws, the HOA is not "changing contractual rights with owners." Instead, the HOA is merely observing the correct rights.

-- Nor can your HOA just "waive" the actual, original (recently found) Bylaws going forward.

-- There is no legal mechanism to "re-instate" Bylaws that are already, all by themselves in the present, effective, as a matter of law.

-- If you want new Bylaws, fine. Your HOA should follow the procedure for amending as given in the Bylaws themselves.

-- I think you are going to have to elaborate on what would change were the HOA to comply with the present (recently found) Bylaws. As it stands now, if you are not following these Bylaws rules for elections (for one), then it is possible any election you run subsequently will be unlawful.

-- Someone should check to see what (1) the county clerk has on file for your HOA. It may include the Bylaws. In which case the Bylaws have been "publicly noticed" and are lawful. (2) what the Arizona Secretary of State has on file for the corporation that is your HOA. Sometimes the filings with the Secretary of State include the Bylaws.
NicoleC5
(Arizona)

Posts:23


12/20/2019 7:25 PM  

By using the actual, original Bylaws, the HOA is not "changing contractual rights with owners." Instead, the HOA is merely observing the correct rights.
BECAUSE THEY WERE NEVER PROPERLY HANDED OVER OWNER TO OWNER AND MANY HAVE COME AND GONE, MOST PEOPLE GET THIS INFORMATION PRIOR TO BUYING. ESSENTIALLY YOU ARE ENTERING INTO AN AGREEMENT WHEN YOU PURCHASE THE PLACE, AND IF YOU'RE TOLD THEY'RE ARE NO BYLAWS, WELL THEN THEY'RE ARE NO BUYLAWS.

Nor can your HOA just "waive" the actual, original (recently found) Bylaws going forward.
BECAUSE WE HAVE NOT OPERATED WITH THEM, I BELIEVE WE MAY HAVE WAIVED OUR RIGHT TO ENFORCE THEM.

There is no legal mechanism to "re-instate" Bylaws that are already, all by themselves in the present, effective, as a matter of law.
WHEN YOU AMEND BYLAWS I BELIEVE YOU'RE REINSTATING THEM, AND SO IT WOULD BE UP TO OUR CCR TO GOVERN THE PROCESS WITH THE AMENDEMNT PROVISION WHICH REQUIRES MEMBERSHIP APPROVAL.

I think you are going to have to elaborate on what would change were the HOA to comply with the present (recently found) Bylaws. As it stands now, if you are not following these Bylaws rules for elections (for one), then it is possible any election you run subsequently will be unlawful.
FOR ONE OUR BYLAWS DO NOT DICTATE HOW MANY HOA MEETING WE SHOULD HAVE. IT WOULD NOT BE IN OUR BEST INTEREST TO HAVE ONLY ONE ANNUAL MEETING.
TWO: OUR VOTING RIGHTS WOULD SIGNIFICANTLY CHANGE BECAUSE CURRENTLY ALL HOMEOWNERS CAN VOTE IN ELECTIONS EVEN IF YOU'RE DELINQUENT IN ASSESSMENT DUES (WHILE I DON'T AGREE WITH THIS ON A GENERAL LEVEL, I THINK FOR CERTAIN REASONS, SUCH AS A REMOVAL OF THE BOD, ALL MEMBERS SHOULD BE ALLOWED TO VOTE.

Someone should check to see what (1) the county clerk has on file for your HOA. It may include the Bylaws. In which case the Bylaws have been "publicly noticed" and are lawful. (2) what the Arizona Secretary of State has on file for the corporation that is your HOA. Sometimes the filings with the Secretary of State include the Bylaws.
I HAVE ONLY CHECKED THE RECORDER'S OFFICE WHICH THEY DO NOT HAVE TO BE RECORDED IN ARIZONA.

THANK YOU FOR THE INSIGHT AND HELP.
GeorgeS21
(Florida)

Posts:2890


12/20/2019 7:37 PM  
Are you a board member?

Again, to be frank, it sounds like you are crusading ... and, given the lack of specificity about what you are fighting against in your Bylaws, we can’t tell what your real issue is.
GeorgeS21
(Florida)

Posts:2890


12/20/2019 7:44 PM  
I’ll comment on the two specifics you offer:

Annual meeting - once per year is normal. I’ve seen communities with more, and been on the board of one in which we reverted to once per year. More is too hard, and unnecessary. Decisions in between are more rationally left to the board.

Loss of voting rights due to being in arrears is common, as well. For obvious reasons.

If the above represent the core of your issues, then, if I were on your board, I would fight against your intent.
AugustinD


Posts:3647


12/20/2019 8:25 PM  
NicoleC5,

-- I doubt that any contract from, say, buyer to seller, will be violated if the HOA suddenly announces, "Oops on us. The board found the original Bylaws. The HOA is required by law to comply with them. All future elections and other business governed by the Bylaws will be run pursuant to the Bylaws."

-- If the Bylaws say members delinquent may not vote in elections, and the HOA continues to let these delinquent members vote, the HOA is vulnerable to a lawsuit.

-- Typically within the Bylaws is the procedure for amending the Bylaws. Within the CC&Rs is the procedure to amend the CC&Rs.

-- After hearing from folks here at hoatalk, your Board should probably talk with a HOA attorney. Have a list of questions for the attorney.
GenoS
(Florida)

Posts:3916


12/20/2019 9:32 PM  
Posted By NicoleC5 on 12/20/2019 7:25 PM
BECAUSE THEY WERE NEVER PROPERLY HANDED OVER OWNER TO OWNER AND MANY HAVE COME AND GONE, MOST PEOPLE GET THIS INFORMATION PRIOR TO BUYING. ESSENTIALLY YOU ARE ENTERING INTO AN AGREEMENT WHEN YOU PURCHASE THE PLACE, AND IF YOU'RE TOLD THEY'RE ARE NO BYLAWS, WELL THEN THEY'RE ARE NO BUYLAWS.

As a point of reference, in Florida it doesn't matter whether or not a buyer is presented with all of the governing documents before buying into an HOA (It's different for condos). The owners are obligated by law to follow them, whether or not they were made aware of them prior to purchase. There is a required disclosure summary that has to be given to the prospective purchaser, but then it's on them to find out what the documents are and obtain copies. If the CC&Rs say "no dogs" and a buyer comes in with a dog and claims "I NEVER KNEW ABOUT THAT!" then guess what? The dog has to go. A verbal claim that "there are no bylaws" is not somthing anyone should rely on to be true.
NpS
(Pennsylvania)

Posts:3987


12/21/2019 7:05 AM  
Nicole

What exactly do your CC&Rs say about the ByLaws?

Sikubali jukumu. Read all posts at your own risk.
GeorgeS21
(Florida)

Posts:2890


12/21/2019 7:15 AM  
NpS,

I understand you’re trying to connect the doc dots, but based on what the OP has said, do you really think it will matter?
NpS
(Pennsylvania)

Posts:3987


12/21/2019 8:00 AM  
What I got from the OP so far is that she would rather start with a clean slate than accept the old bylaws that were recently found. Also, for many owners, those old bylaws were not part of the information provided to buyers when homes changed hands.

Some of her assumptions are wrong IMO - like - if you didn't get the bylaws when you bought, then they don't apply to you. Not sure if this is exactly what she is saying, but to tell you the truth, I don't want to respond to this opinion or that opinion before I have a better understanding of the documents that the OP would like to see waived.

The first question is - Are the old bylaws still valid? And since the source of authority for the bylaws is the CC&Rs, I think it makes sense to know what those CC&Rs (which apparently did get transferred from sellers to buyers) say.

Also, I'm not familiar with AZ HOA laws and the relative priority of Documents vs Statutes as stated in those laws. So I'd like to understand a bit more about the documents themselves.

Sikubali jukumu. Read all posts at your own risk.
AugustinD


Posts:3647


12/21/2019 9:03 AM  
Posted By AugustinD on 12/20/2019 8:25 PM
NicoleC5,
-- I doubt that any contract from, say, buyer to seller, will be violated if the HOA suddenly announces, "Oops on us. The board found the original Bylaws. The HOA is required by law to comply with them. All future elections and other business governed by the Bylaws will be run pursuant to the Bylaws."

-- If the Bylaws say members delinquent may not vote in elections, and the HOA continues to let these delinquent members vote, the HOA is vulnerable to a lawsuit.


At this point, I think what I wrote above is wrong. The source of the OP's concern appears to be the Arizona HOA statute. See https://amemanagement.net/css/documents/arizona_planned_community_act_portrait.pdf and
https://www.azleg.gov/ars/33/01806.htm . Section 33-1806 requires a HOA home seller (less than 50 units) or the HOA (50 or more units) to provide, among other things, a copy of the Bylaws to a purchaser. Then the following statement is supposed to be signed by both the seller and the purchaser and returned to the HOA within 14 days of (yada):

[part of Subsection A]
"I hereby acknowledge that the declaration, bylaws and rules of the association constitute a contract between the association and me (the purchaser). By signing this statement, I acknowledge that I have read and understand the association's contract with me (the purchaser). I also understand that as a matter of Arizona law, if I fail to pay my association assessments, the association may foreclose on my property."

The statute goes on to say:

"A purchaser or seller who is damaged by the failure of the member or the association to disclose the information required by subsection A of this section may pursue all remedies at law or in equity against the member or the association, whichever failed to comply with subsection A of this section, including the recovery of reasonable attorney fees."

The OP wrote that the HOA has been allowing members who are delinquent in the payment of their assessments to vote in elections. Evidently the (recently found) Bylaws say otherwise.

Was a contract formed between the HOA (or a seller) and a purchaser, pursuant to Section 33-1806? I think so. Can the HOA (or a seller) now take away voting rights, on account of being behind on assessments, from people who purchased and were not given a copy of the Bylaws? I say, "not lawfully." It seems to me that all the folks who purchased into the HOA and were not given a copy of the Bylaws must be grandfathered, such that they never lose their voting rights on account of delinquency in the payment of the HOA assessment.

Else I cannot think of anything else in Bylaws that might 'damage' a HOA member and so give the HOA member a cause of action in court.


NpS
(Pennsylvania)

Posts:3987


12/21/2019 9:10 AM  
Thanks Augustin for the AZ statute info.

Your post raises some other questions that may be relevant:

- More or less than 50 units in the HOA?

- When was the HOA built? Does it predate the AZ statute? What does the statute say about preexisting HOAs?

Sikubali jukumu. Read all posts at your own risk.
KerryL1
(California)

Posts:7390


12/21/2019 9:14 AM  
I agree with those who say you must abide by these bylaws. You also need your HOA attorney's advice to restate or amend them. (I don't think "reinstate" is the word you want here.) Your bylaws will say in them the % of voter approval needed to amend/restate them.

Nicole, AZ has a lot of statutes about HOAs. AZ also has corporation codes, which also control your HOA. Your board should be abiding by these regarding, for example, your elections. These also tell you about board meetings. So if your bylaws do not say a how many meetings your board (now the members/homeownrs) must have in a year, you should abide by corporations codes.

I believe AZ HOA statutes say the board must have open meetings and that Owners may comment on every agenda item. Your old bylaws won't say that, but the state statutes overrule your bylaws.

Bylaws usually aren't of much interest to Owners as they're about meetings, elections, officers, number of directors or a range, terms for board members. In other words, bylaws don't usually affect the everyday lives of Owners the way that rules & regs or parts of the CC&Rs do.

It sounds, Nicole, like your boards approach has been indeed very relaxed. sometime this indicates a small HOA. Can you tells the size of yours and the number of directors?

I, like George, also would like to know the specific bylaws that trouble you.
AugustinD


Posts:3647


12/21/2019 9:25 AM  
Posted By NpS on 12/21/2019 9:10 AM
- More or less than 50 units in the HOA?
I too was pondering the implications of the 50 unit rule. Just talking here: Suppose the HOA is subject to the statute and has less than 50 units. So the seller was obliged to provide the Bylaws but did not. Who can the purchaser take legal action against? I say the HOA is likely still on the hook, as it either has not made the Bylaws available or was deceptive about their existence or similar. Rather than tarry over the point, I think it would be best to just grandfather the delinquent owners who purchased before the Bylaws were discovered.

Hopefully there are no close elections in the near future.

Posted By NpS on 12/21/2019 9:10 AM
- When was the HOA built? Does it predate the AZ statute? What does the statute say about preexisting HOAs?


Section 33-1801 covers applicability. I looked it over. I agree it's not certain yet that this statute applies.
NicoleC5
(Arizona)

Posts:23


12/21/2019 9:30 AM  
We are a condominium complex of 41 units.

The owners are responsible to pass along the bylaws and ccr's but the BOD is also responsible to maintain records. Our previous three boards were not aware of any bylaws as they oversaw the operations. That being said, our approach has been very relaxed, regarding elections, meaning we never had any (whoever wanted to be on the BOD could be, because most of our owners live out of state and participation was always difficult) and when we did have a vote about something anyone could vote.

I had a previous BOD who is also a real estate agent sell one of my units, along with others in the community and he never provided bylaws and always said we don't have any.

It is my opinion, because we have only been governed by CCR's for so long that we have waived certain provisions, if not all, of our bylaws. In Arizona you are only required to have an annual meeting, which in my opinion is not enough. I would like to see an HOA meeting once a month.

Please let me know if this is enough information or if more is needed. And thank you everyone for the critical thinking.
NicoleC5
(Arizona)

Posts:23


12/21/2019 9:31 AM  
The HOA was formed in 2006
NicoleC5
(Arizona)

Posts:23


12/21/2019 9:34 AM  
The most important part of the bylaws that is currently troubling me is the voting eligibility and number of HOA meetings. We also have outdated provisions about unanimous written consent which is overridden by AZ Open Meeting Laws.

We have had a BOD consisting of one to three members throughout my time being an owner in the complex.

AugustinD


Posts:3647


12/21/2019 10:30 AM  
Posted By NicoleC5 on 12/21/2019 9:30 AM
We are a condominium complex of 41 units.
...
It is my opinion, because we have only been governed by CCR's for so long that we have waived certain provisions, if not all, of our bylaws. In Arizona you are only required to have an annual meeting, which in my opinion is not enough. I would like to see an HOA meeting once a month.


-- The Arizona Condominium Act applies. Section 33-1201 says it applies to all condos, regardless of the date established. Section 33-1260 of the Condominiums Act says exactly the same as what I quoted above. https://www.azre.gov/hoa/documents/Condominium_Act.pdf

-- CathyA3 made the point that some "courts have said that the way things had been done for years basically became 'the law.' " Nicole appears to feel confident that the Bylaws have been waived due to continued disregard. From where I am sitting, the only thing Nicole's posts lack is some reinforcement from case law. Here is one to get the ball rolling:
http://www.kscourts.org/cases-and-opinions/Opinions/Unpublished/Ctapp/2017/20170414/115586%20.pdf. From the latter:

"Corporate bylaws may also be waived by a continued disregard thereof by the parties for whose benefit they were enacted. Schraft, 236 Kan. 28, Syl. ¶ 2 (citing 18 Am. Jur. 2d, Corporations § 173); 18A Am. Jur. 2d, Corporations § 271. Bylaws may be amended informally as may be evidenced by a course of proceeding or conduct on the part of a corporation inconsistent with the bylaws purporting to be amended. 18A Am. Jur. 2d, Corporations § 269. "Acquiescence in the corporate act for an unreasonable length of time also constitutes an estoppel." 18B Am. Jur. 2d, Corporations § 1725. "Estoppel involves an assertion of rights inconsistent with past conduct, silence by those who ought to speak, or situations where it would be unconscionable to permit persons to maintain a position inconsistent with one in which they have already
acquiesced." Schraft, 236 Kan. at 36."

-- Yes, this is Kansas, and "We're not in Kansas anymore, Toto." But increasingly I see case law from one state in fact being used in other states often. I will take a look at Arizona case law.
AugustinD


Posts:3647


12/21/2019 10:51 AM  
More reinforcing (mightily) Nicole's position:
-- https://www.muchlaw.com/insights/article/corporate-bylaws-use-them-or-lose-them

-- As quoted in Schraft v. Leis, Kansas, 1984, https://law.justia.com/cases/kansas/supreme-court/1984/55-954-1.html:

"Corporations have power to waive provisions of their bylaws introduced for the protection of the company, and they may do so expressly or impliedly. Also, corporate bylaws may be waived by a continued disregard thereof by the parties for whose benefit they were enacted." 18 Am.Jur.2d, Corporations § 173, pp. 703-04.

See also 8 Fletcher, Cyclopedia of the law of Private Corporations § 4200, pp. 730-31 (rev. perm. ed. 1982). The use of the bylaws, therefore, was waived by both parties.

-- I googled for some of the phrases above quoted from Am. Jur. 2d Corporations. Only the Kansas case came up. But the Illinois-based web site suggests there is more case law on the point.

-- As far as I am concerned, anything in Nicole's HOA's Bylaws that is different from what the condo has been doing for years is now waived. Members wanting to use certain sections of the Bylaws never before used are estopped from doing so.

-- What to do? See an attorney. Because the procedures for amending the Bylaws were never followed in the past, so the amendment section is now waived. Maybe amend the Declaration to state that, as of such-and-such date, the Bylaws dated ____, 2020 are hereby adopted?

NicoleC5
(Arizona)

Posts:23


12/21/2019 10:58 AM  
Thank you so much.
I have had a difficult time finding case law to support in Arizona but did come across in other states. Thank you so much for your contribution to the arguments.

In this scenario I feel like an easy fix by just saying the rules apply would be doing our community a disservice as it would allow a cause of action for someone to pursue.
AugustinD


Posts:3647


12/21/2019 11:21 AM  
Posted By NicoleC5 on 12/21/2019 10:58 AM
In this scenario I feel like an easy fix [that just says the newly discovered Bylaws] apply would be doing our community a disservice as it would allow a cause of action for someone to pursue.


I agree that adopting all or many of these (recently discovered) Bylaws now is legally wrong and invites litigation.

Here's what looks like thee seminal Arizona case law on Boards waiving bylaws through a course of conduct: Hernandez v. Banco De Las Americas, 116 Ariz. 552 (1977), https://law.justia.com/cases/arizona/supreme-court/1977/12946-pr-0.html . Both this 1977 Arizona decision and the 2008 Illinois appeals court decision Kern v. Arlington Ridge Pathology (cited in the link I provided above) cite the Washington Supreme Court decision Bay City Lumber Co. v. Anderson, 8 Wash. 2d 191, 111 P.2d 771 (1941).

GeorgeS21
(Florida)

Posts:2890


12/21/2019 11:45 AM  
Nicole,

While I believe your bylaws are still in effect, it would be great if you could let us know who your lawsuit goes.

All - I suspect, again, there is more information that would weigh heavily in a lawsuit.
KerryL1
(California)

Posts:7390


12/21/2019 1:30 PM  
Well, Augustin's research & arguments are persuasive. But, does it matter that many perhaps all buyers did sign saying they agree that the bylaws apply to them and that they understand them?

It's good to see Augustine correct earlier statements.

Given Nicole's board's relaxed attitude, I wonder if they are even abiding by AZ corp. codes and AX HOA statutes. It seems to me those need attention also to avoid legal action.
AugustinD


Posts:3647


12/21/2019 3:09 PM  
Posted By KerryL1 on 12/21/2019 1:30 PM
But, does it matter that many perhaps all buyers did sign saying they agree that the bylaws apply to them and that they understand them?
The above is certainly one issue. But I think the issue that trumps this is that, even if all members did receive a copy of the bylaws, it's clear the board has not been complying with many-to-all of the Bylaws for many years. Per the case law, this invalidates these Bylaws.

Posted By KerryL1 on 12/21/2019 1:30 PM
Given Nicole's board's relaxed attitude, I wonder if they are even abiding by AZ corp. codes and AX HOA statutes. It seems to me those need attention also to avoid legal action.
I agree.
NicoleC5
(Arizona)

Posts:23


12/21/2019 6:52 PM  
After doing diligent research our HOA has many discrepancies that will need to be addressed. It will require patience and a lot of guidance to get this place in order.

I really appreciate the help I received here today.

Thank you especially to Augustin who was able to look past controversy and go above and beyond answering my questions.

MelissaP1
(Alabama)

Posts:9444


12/22/2019 4:12 AM  
I just don't see why your HOA can't now get together and modify the by-laws. That's all I see that needs to be done. Just do what is required to make changes by whatever majority vote is required and update them. Not a bad idea to take the time out to review the CC&R's and Articles of Incorporation while your at it.

Will say to keep in mind that by-laws are INTERNAL HOA documents. They aren't considered "Public" as CC&R's and Articles are. Plus not every state requires them to be filed. Although many times they are found on file with the CC&R's. So this may just be all internal changes within your HOA to make or not make. The choice is up to the membership.

Former HOA President
JeffT2
(Iowa)

Posts:547


12/22/2019 10:52 AM  
I seem to have quite a different opinion. I'm not buying that bylaws, or parts of the bylaws, go away or can be waived. Condominium bylaws are required by law, and must have provisions for elections and the method for amending the bylaws. Case law for other types of corporations does not apply to the unique characteristics of condominiums.

The correct course of action is to accept the current bylaws, and to use the provisions in the bylaws to amend them if desired.

What percentage of owners are delinquent? The COA should work to get all the owners current and then it won't have an impact on voting (and this discussion becomes moot).
GeorgeS21
(Florida)

Posts:2890


12/22/2019 10:55 AM  
Jeff,

Your thought process is reasonable.

My thought is the OP has a predisposition against this logical and simple and legal approach.

Dead end.
NpS
(Pennsylvania)

Posts:3987


12/22/2019 11:33 AM  
Just wondering if anyone else finds this thread weird like I do.

When I first read the post about an association that hadn't used the recently found bylaws for at least ten years, my first thought was that this was a 30, 40, or 50 year old community. But no. We later learned that it's a condo that was formed in 2006. That would mean that the Association stopped using the bylaws 3 years after formation. Huh.

The OP also believes that the bylaws are no longer in effect. Really? If I spoke with an original owner - (IMO it's reasonable to assume that at least 1 original buyer out of 41 still owns a unit after 13 years) - would that original owner agree that the bylaws didn't exist or were not in effect? I doubt it. Like many associations, the majority of owners don't get involved. Some might still have copies of the original docs they received 13 years ago. Why would they think that the bylaws they received back then had been revoked or whatever? I'm sure that no one informed them otherwise.

The OP thinks that recognizing the recently found bylaws would open the Condo to litigation. Maybe. But it's more likely IMO that claiming the old bylaws don't apply would open the Condo to even more litigation.

As many here have said - Why not just amend what you've got? Any of you who have been able to make changes in your documents already know, change isn't easy - especially when so many people don't want to participate.

When asked what needs to change, the OP said that there should be more than one meeting a year. My guess is that the OP doesn't know the difference between a Board meeting and a Homeowners meeting. That's not someone I would want leading the charge on a community-wide change. Perhaps others would like to speak on the distinction between types of meetings for the OP - But for me, I'll just say that it's a red flag.

As to outdated provisions that are overridden by open meeting laws, those don't need to be revised, rescinded, waived, or anything else. The statute applies no matter what the documents say. On matters of statutory override, the docs get ignored.

As to allowing non-current members to vote - I'm not sure what's going on here. I'll get back to it at the end of this post. But --- If there's nothing critical to vote on, and if no major expenditure is involved, and if anyone who's interested is invited to become a member of the board, and there is no indication of foul play -- then I can see where it might be inconvenient to check and see who's current and only allow them to vote. Certainly on a significant vote where the outcome matters, I can see being more stringent and checking who's current. Like removal of BOD members. But that's the exact circumstance where the OP says that everyone's vote should count. Another red flag for me.

On Augie's finding AZ statutes, I express my gratitude. On Augie's finding AmJur Black Letter Law, I find nothing close to supporting "waiver" under the OP's circumstances. In all of the cited cases, all of them involved commercial enterprises in crisis - a bank, a lumber yard, etc. All of the challenges involved the distribution of funds to individuals - typically in the form or compensation. After the fact, some of the owners wanted to challenge those payments because some bylaw or another should have stopped the distribution of funds. Those challenges lost. But consider the circumstances - Every one of the individuals involved was intimately aware of the events. They were closely held companies. That's nothing like a Condo - where most of the people are in the dark about what goes on. Those unaware owners waived nothing. Why should the rules that they expected to be in place be thrown out because the BOD members happened to be clueless?

Now to my real question -- What's the underlying motivation involved here?

My HOA is more than 90% owner-occupied. No one owns more than 1 unit. But, if things started to change -- Let's say that we went from less than 10% rentals to 50% or more -- I would be concerned because the interests of resident-owners can be so different than the interests of absentee-owner-landlords. Let's say that one person started buying up multiple units, I again would be concerned because I don't want one person to have that much say in what goes on here. There's nothing against this happening, but I would still be concerned.

All I know about the OPs situation is that she owns multiple units. That's a red flag for me personally although it may be perfectly fine in another association. Then again, as I said at the beginning of this post, something seems very weird to me. What is the underlying objective? Is there tension between remote & resident owners or single & multiple unit owners? Just wondering.



Sikubali jukumu. Read all posts at your own risk.
AugustinD


Posts:3647


12/22/2019 12:15 PM  
Posted By JeffT2 on 12/22/2019 10:52 AM
Case law for other types of corporations does not apply to the unique characteristics of condominiums.


Condominiums typically have a Declaration and Articles of Incorporation that typically state the condominium is a lawful corporation subject to the state's Nonprofit Corporation Act. Why is that?

The law is always what the court says tomorrow. But for now, I disagree with Jeff's blanket assertion. I believe that, for one, it is a big legal deal that NicoleC5's condo has been letting delinquent members vote for years and has been operating as if there are no bylaws.

NpS, I think NicoleC5 came here unusually well-prepared on the main question. The heading of the thread is right from case law. She thought "waiver" might apply. Indeed before starting the thread, it sounds like she bumped into a bit of case law on same. She wisely (? one can only hope) came here to sound out the forum.

CathyA3's comment about 'course of conduct' also rung a bell for me.

NicoleC5's posts also indicated familiarity with the Arizona statute section saying a buyer could take action against a seller or the HOA (depending) if the buyer was shortchanged by not getting the Bylaws.

Without NicoleC5's twisting anyone's arm, my thinking on this reversed.

I agree NicoleC5's posts are confusing regarding the meetings issue. But people here encourage short posts; not disclosing the names of one's hoa or condo; and so on. One can only post so much without the audience getting lost in the minutiae. Or sure, maybe NicoleC5 does not understand the difference between a meeting of the members and a meeting of the board. Given that her condo has not run a directors' election for years and has had no bylaws from which to work, this is not all that surprising. (I am taking her at her word. The threads where everyone wildly speculates annoy.)

I cited four appeals court decisions (some of which cite each other) from four states: Kansas, Illinois, Washington and Arizona. I think the Illinois decision Kern v. Arlington Ridge Pathology has the most generalities. I do not see your reasoning as to why these "rules," regarding a course of conduct with regard to Bylaws, would not apply to a condominium.

The decisions also emphasize that Bylaws were ignored with the consent of shareholders. This is exactly what has happened at NicoleC5's condo.

To me, the issue is about Bylaws. The fact that the corporation here is a Condo has zero bearing.

I am happy to agree to disagree. Meanwhile, I think the practical value of forums like hoatalk often lies in its helping participants prepare for meetings with their attorneys. Mission accomplished? I believe so.
JohnC46
(South Carolina)

Posts:9660


12/22/2019 12:28 PM  
I agree. There is some underlying thing going on.

Nicole. What is about the "old" Bylaws you do not like?
GeorgeS21
(Florida)

Posts:2890


12/22/2019 2:20 PM  
Remember ... A positive place for community association leaders to share ideas and learn.

Nicole never answered my question about whether she was in the Board for her condo. Odd, or simply convenient.

Lots happening with Nicole ... that has zip to do with the purpose of this forum, in fact is likely counter to the purpose of this forum.

And, Augustin, we all appreciate your thoroughness, but I personally believe the corporation in question being a COA is certainly germane.
NicoleC5
(Arizona)

Posts:23


12/22/2019 2:38 PM  
Once again thank you to Augustin that has a very clear understanding of my position and why I am here.

I am here to have a conversation and educate myself about the current situation our Association is faced with.

It is very controversial and I didn't want to open pandora's box with all the details. I wanted to stick with a simple approach, because things can get very muddy. However, even here I feel like things are getting a little muddy.

George, I am not sure why you keep trying insult me with your veiled comments? Does it matter if I am on the BOD or an active member in the community? I am here to learn. I read and put together my own conclusions and now I am reaching out to collect the opinion of others. Why do you have a problem with this?



GeorgeS21
(Florida)

Posts:2890


12/22/2019 2:50 PM  
I am not trying to insult you, but it does matter if you are on the Board. The first red flag for me relates to posters answering questions - if they don’t, it means something.

The forum collects lots of non Board association members with preconceived notions looking for affirmation of their gripe with their association. Feeding this is not the stated and supported purpose of this forum.

Some of the members of this forum disagree with the purpose of the forum ... turning the forum into a free for all place to continue to run down the concept of associations. Meh - I guess we all still learn from this.

Please keep us advised.
JohnC46
(South Carolina)

Posts:9660


12/22/2019 3:06 PM  
I believe Nicole is hiding her real reason/need.
AugustinD


Posts:3647


12/22/2019 3:07 PM  
Posted By GeorgeS21 on 12/22/2019 2:50 PM
I am not trying to insult you, but it does matter if you are on the Board.

The first red flag for me relates to posters answering questions - if they don’t, it means something.

The forum collects lots of non Board association members with preconceived notions looking for affirmation of their gripe with their association. Feeding this is not the stated and supported purpose of this forum.


Are you saying the reason it matters whether Nicole is a board member is because then you can assign motivations to why she is posting?

I cannot tell which side Nicole is on: Does she think the recently discovered Bylaws should be implemented? If this happens, then Nicole asks, 'Couldn't a member who was previously allowed to vote while in arrears on HOA assessment now successfully win a lawsuit?'

If the recently discovered Bylaws are not implemented (on account of lawful waiver, due to many years of not using the Bylaws yada; see case law), then Nicole seems to be asking, "Do we write a new set of Bylaws?" I cannot tell which side she is on.

To me, trying to divine someone's motivations is the stuff of gossip. It is not honest debate. It does not yield anything of value.
AugustinD


Posts:3647


12/22/2019 3:08 PM  
Posted By JohnC46 on 12/22/2019 3:06 PM
I believe Nicole is hiding her real reason/need.


Gossip.
JohnT38
(South Carolina)

Posts:350


12/22/2019 3:13 PM  
Just to be clear she has stated what side she is on:

"The reason why I believe they should be reinstated is because it significantly changes the operation of internal business. We haven't had a proper election in years, because our community has always operated "if you want to be on the board, you're on the board." I feel like the approach should be as if we are adopting new bylaws that need to be approved by the community so everyone is aware of the contractual change within the community."
JohnC46
(South Carolina)

Posts:9660


12/22/2019 3:28 PM  
Posted By JohnT38 on 12/22/2019 3:13 PM
Just to be clear she has stated what side she is on:

"The reason why I believe they should be reinstated is because it significantly changes the operation of internal business. We haven't had a proper election in years, because our community has always operated "if you want to be on the board, you're on the board." I feel like the approach should be as if we are adopting new bylaws that need to be approved by the community so everyone is aware of the contractual change within the community."




John

I read it different. She says she wants the original Bylaws adopted but by a vote. I believe she wants the vote to be a no, thus continue to operate as they have. Whereas I believe they are the original Bylaws, there is no need to vote. Adopt them as they are as they are the legal Bylaws. You want to change them later, all well and fine.

Maybe I am giving Nicole credit for be a conniver when she is not, If so, my bad.
GeorgeS21
(Florida)

Posts:2890


12/22/2019 3:42 PM  
Rereading, it sounds to me like she wants to start over with new set of Bylaws, ignoring the current (albeit just refound) Bylaws.

From the beginning this has seemed an easy one ... short going to court, which I assess these folks are not going to do, the current Bylaws hold. They must be followed to make modifications.

Nicole us trying to skip a step ... two of her stated reasons are nonsensical. The first was wanting to have more than one annual meeting ... an annual meeting is if members and it is annual because its purpose is to elect a board, and, the second reason? Wanting those members in arrears to be able to vote? She also may be confusing Board and member meetings?

I, too, suspect there is more going on ... or, perhaps just confusion wrt our reading of Nicole’s story, or perhaps Nicole is confused.
JohnC46
(South Carolina)

Posts:9660


12/22/2019 3:58 PM  
George

I believe they have no present Bylaws but just operate as they "think" is right so it is not a case of our "present" Bylaws or our "found" original Bylaws.

This says, to me, they have been making it up as they go.
GeorgeS21
(Florida)

Posts:2890


12/22/2019 4:00 PM  
John,

Didn’t Nicole say they found their bylaws?
PaulJ6


Posts:0


12/22/2019 5:05 PM  
Posted By NicoleC5 on 12/20/2019 3:12 PM
Hello Members,

I am writing from the state of Arizona. Our community has been missing bylaws for about ten years and we have been conducting our HOA business without their guidance for an equal amount of time. My question is, recently an owner found the bylaws and want's the community to abide by them. Did our community waive our rights to bylaws? Do these bylaws govern? Do we need to restate them? If we restate them do we need membership approval because it would be considered an amendment? Any insight would be helpful.

Thank you.




By "missing", you mean the board or whoever simply misplaced them and now found them?

If so, those bylaws have been valid and are still valid.

If you want to change them, you would need to follow the procedures in the bylaws for changing them (likely a board vote or owner vote).
PaulJ6


Posts:0


12/22/2019 5:05 PM  
Posted By NicoleC5 on 12/20/2019 3:12 PM
Hello Members,

I am writing from the state of Arizona. Our community has been missing bylaws for about ten years and we have been conducting our HOA business without their guidance for an equal amount of time. My question is, recently an owner found the bylaws and want's the community to abide by them. Did our community waive our rights to bylaws? Do these bylaws govern? Do we need to restate them? If we restate them do we need membership approval because it would be considered an amendment? Any insight would be helpful.

Thank you.




By "missing", you mean the board or whoever simply misplaced them and now found them?

If so, those bylaws have been valid and are still valid.

If you want to change them, you would need to follow the procedures in the bylaws for changing them (likely a board vote or owner vote).
NpS
(Pennsylvania)

Posts:3987


12/22/2019 6:16 PM  
Posted By NpS on 12/22/2019 11:33 AM
Just wondering if anyone else finds this thread weird like I do.

When I first read the post about an association that hadn't used the recently found bylaws for at least ten years, my first thought was that this was a 30, 40, or 50 year old community. But no. We later learned that it's a condo that was formed in 2006. That would mean that the Association stopped using the bylaws 3 years after formation. Huh.


Maybe you consider what I said to be "gossip". I don't.

I cannot think that any Condo would stop using its bylaws just 3 years after formation.

I see one "red flag", I get over it. But as I said in my lengthy post, I saw many "red flags". The more red flags I see, the more I would like to understand what is really going on.

Gossip. No.

Cautious about getting drawn into supporting an undisclosed agenda. Absolutely.


Sikubali jukumu. Read all posts at your own risk.
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