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Subject: Rule Change Without Meeting
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EricB13
(Illinois)

Posts:10


05/22/2020 5:26 AM  
Our board decided to change the rules and regulations regarding the ability for homeowners to have temporary 15ft pools in our yards due to the Clubhouse Pool being closed.

They never sent a meeting notice or anything, and the community manager said they would ratify the change at the next meeting in June.

Does this process seem correct? All other rule changes in the past have obviously been discussed on the floor and then voted on. It seems out of order since they already sent an email blast out notifying residents of the change.
SheilaJ1
(South Carolina)

Posts:164


05/22/2020 6:45 AM  
Don’t know about your state but most states allow decisions in lieu of a meeting. This is very common as long as it’s noted in the next minutes that the action of the rule took place. It actually doesn’t have to be in the minutes, ours just has a separate form.

About the rule itself, in the current climate, pools are being allowed they come under seasonal equipment and actually don’t require a rule at all.

Let the kids have their pools if they can even find one.
AugustinD


Posts:3364


05/22/2020 6:50 AM  
Posted By EricB13 on 05/22/2020 5:26 AM
Our board decided to change the rules and regulations regarding the ability for homeowners to have temporary 15ft pools in our yards due to the Clubhouse Pool being closed.

They never sent a meeting notice or anything, and the community manager said they would ratify the change at the next meeting in June.

Does this process seem correct? All other rule changes in the past have obviously been discussed on the floor and then voted on. It seems out of order since they already sent an email blast out notifying residents of the change.


If it were not for the pandemic, then for one thing what the board is doing is likely an unlawful amendment to the covenants.

I presume the board is rightly concerned about spreading disease at the community pool. Yet the covenants undoubtedly require the HOA to maintain the pool and keep it available to owners. I think the 15-foot pools are a compromise. In ordinary times, one could likely successfully challenge this in court, and I ordinarily would encourage taking the slow but often sure steps to do so. But for this coming summer season, I understand the board's ignoring the rules and covenants to some extent when it comes to COVID-19 related issues.

Feel free to elaborate on your concerns.
CathyA3
(Ohio)

Posts:953


05/22/2020 7:47 AM  
Posted By AugustinD on 05/22/2020 6:50 AM


If it were not for the pandemic, then for one thing what the board is doing is likely an unlawful amendment to the covenants.




Maybe - it depends what the OP's CC&Rs say.

If they prohibit above ground pools, then I think the board would need to consider whether this refers to permanent structures (by which I mean something that remains in place for multiple years) or if a 15-foot pool could be considered temporary and seasonal as Sheila suggested. With a community pool, it's likely these private pools are temporary and may not be a violation of the covenants.

Or if the board decides that these pools would actually be a violation, this could be viewed as a pre-emptive announcement that they would not enforce this particular covenant for this summer only.

Of course the board also needs to consider if they're setting a precedent. But I think most of us hope and believe that the covid-19 pandemic will eventually end and that life will go back to normal at some point.
CathyA3
(Ohio)

Posts:953


05/22/2020 8:01 AM  
Forgot to mention re: the decision without meeting - if these are not allowed in Illinois but there is some state restriction on gatherings for some reason, it may be that the state ruling would take precedence.

We did not have our annual meeting during the first quarter this year, which is a violation of our bylaws but complied with my state's ban on gatherings. Ignoring such public health orders may open the association to liability if covid-19 is present in your community. (We're already seeing lawsuits as a result of the pandemic, although I haven't seen any HOA-related ones yet. Lawyers' opinions on an HOA's liability have been mixed.)
AugustinD


Posts:3364


05/22/2020 8:10 AM  
Posted By EricB13 on 05/22/2020 5:26 AM
They never sent a meeting notice or anything, and the community manager said they would ratify the change at the next meeting in June.
As CathyA3 is suggesting, this may have been a 'corporate action without a meeting.' Every state I have looked at says this is allowed as long as the vote by the directors is unanimous, with all directors providing consent in writing (email?), and typically to be documented in the next meeting's minutes.

I also keep in mind that there is likely going to be a run on above-ground pools, since nationwide, rec centers (indoor and outdoor) are expected to remain closed. I think I have a high standard for boards, and I want them following the covenants. But in this pandemic, so far I am not seeing anything in this thread deserving of strong criticism. On the contrary, I see what may be wisdom coming from the OP's board.
KerryL1
(California)

Posts:7217


05/22/2020 8:52 AM  
Pretty sure IL is an open meeting state. It also might be that action without a meeting is only for emergencies as clearly the case in CA and perhaps others (VA?).

I do not see why this board couldn't have had a properly-noticed zoom open meeting and voted at it.

Now IL and probably this HOA's bylaws may allow Emergency Meetings, but I don't think this temporary rule change is an "emergency," at least as defined for CA HOAs.

CA does allow for making Emergency Rules to be implemented right away vs. sending a proposed rule out for 28 comment period by owners. In CA, the Emergency Rule is only 2 good for 120 days. Perhaps IL has such a law too.

Having said all that, it does not seem to be an unreasonable change given our trying times. And I can't tell yet, if it does oppose their CC&Rs. The OP motions Rules & Regs.
EricB13
(Illinois)

Posts:10


05/22/2020 12:00 PM  
The situation around pools is something that I personally don't understand based on the language from the declarations and then elaborated more in the rules and regulations.

Here is the Declaration language: "No owner or occupant shall construct a swimming pool of any type or size, whether permanent or temporary, on any of the lots except with the written consent of the Board. A portable child's swimming pool not greater than six feet in diameter may be maintained and situated on a deck, patio, or an enclosed area of each dwelling unit."

Based on that, the declaration is stating that the ability to have a pool with written consent of the board.

Here is the rules and regulations: " The following provisions are supplementary to the existing swimming pool requirements as stated in the governing documents: 1) no owner/occupant shall construct a swimming pool of any type or size, whether permanent or temporary. 2) A portable child's swimming pool not greater than six feet in diameter may be maintained and situated on a deck, patio, or an enclosed area of each dwelling unit."

Our association lawyer has maintained that the Board has the ability by simple 2/3 board majority to change the rules and regulations. It's actually been an ongoing discussion in our community to have the Board change the RULES to allow for blank approval of above ground pools. They've already been allowing in-ground pools.

So long story short, they said it was on the May agenda which we never got sent, that meeting was cancelled, and then they decided to allow the temporary 15ft pools and will ratify it at the June meeting.
AugustinD


Posts:3364


05/22/2020 12:00 PM  
Posted By KerryL1 on 05/22/2020 8:52 AM
Pretty sure IL is an open meeting state.
This appears to be so, under Illinois's HOA Act, 765 ILCS 160 et seq.
Posted By KerryL1 on 05/22/2020 8:52 AM
It also might be that action without a meeting is only for emergencies
This does not appear to be so, as far as Illinois statutes are concerned. From Illinois's Nonprofit Corporation Act, specifically 805 ILCS 105: "(a) Unless specifically prohibited by the articles of incorporation or bylaws, any action required by this Act to be taken at a meeting of the board of directors of a corporation, or any other action which may be taken at a meeting of the board of directors or a committee thereof, may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be approved in writing by all of the directors... "
CathyA3
(Ohio)

Posts:953


05/22/2020 12:26 PM  
Yes, the board does have the right to change rules and regulations. However, the CC&Rs have to be amended, and this requires an affirmative vote of the membership (usually needs a super-majority such as 67% or 75%).

It does sound like the board is within its rights to pre-emptively approve above ground pools. Whether the issue was urgent enough to justify an action in writing according to IL law is an open question.

The problem all of us are having right now, though, is that HOA laws were written without envisioning something like covid-19, which leaves boards to do the best they can with the sometimes inadequate tools at their disposal.

From the outside, it appears to me that this is a good-faith attempt to do what the board believes is in the best interest of the community - pool season will be upon us before a June meeting could take place, and they likely didn't want to make people wait.
KerryL1
(California)

Posts:7217


05/22/2020 12:47 PM  
Thanks for the IL action- without- a -meeting citation, Augustin--I know states vary a lot on this.

what I'm seeing now is that this HOA apparently has a Rule that is in conflict with the Declaration, i.e., the latter does permit pools with board consent; the Rule does not. It would seem the Rule isn't valid as the Declaration takes precedence over Rules.

So the board can make/change rules, which is common. At their closed meeting, they further decided to give blanket approval for these temporary pools. Seems like their decision is in agreement with the Declaration.

That hey cancelled meeting, etc., is similar to what we did in April--board wasn't comfortable yet with some sort of remote open meeting, so postponed a regular meeting 3 weeks so we directors could get up to speed on Zoom.

AugustinD


Posts:3364


05/22/2020 12:48 PM  
Posted By EricB13 on 05/22/2020 12:00 PM
Our association lawyer has maintained that the Board has the ability by simple 2/3 board majority to change the rules and regulations.
Do either the Bylaws or Declaration say 2/3rds of the directors must agree to the change? Normally a simple majority of the board is all that is needed to change rules, with the caveat that the rules have to be consistent with the CC&Rs.
Posted By EricB13 on 05/22/2020 12:00 PM
It's actually been an ongoing discussion in our community to have the Board change the RULES to allow for blank approval of above ground pools.
For what it is worth, by my reading the Board could lawfully do this.
Posted By EricB13 on 05/22/2020 12:00 PM
So long story short, they said it was on the May agenda which we never got sent, that meeting was cancelled, and then they decided to allow the temporary 15ft pools and will ratify it at the June meeting.
As long as the vote outside of a meeting was unanimous and documented with written consent (pursuant to the Illinois Nonprofit Corporation Act), this sounds lawful to me.

Also if folks there are wondering if the covenant on swimming pools is ambiguous or contradicts itself, I say no: Constructing a pool is different from going out and buying a portable child's pool six feet in diameter or smaller.

If you are wondering whether the Board-written rules and regs giving blanket approval denotes "written permission" of the Board, I say yes, legally it does.
AugustinD


Posts:3364


05/22/2020 12:52 PM  
Posted By KerryL1 on 05/22/2020 12:47 PM
what I'm seeing now is that this HOA apparently has a Rule that is in conflict with the Declaration, i.e., the latter does permit pools with board consent; the Rule does not. It would seem the Rule isn't valid as the Declaration takes precedence over Rules.
Respectfully, I disagree with your interpretation. The Board, via its rules, previously decided to deny owners approval to construct a pool. Right now, I see this as consistent with the CC&Rs.
JohnC46
(South Carolina)

Posts:9461


05/22/2020 2:29 PM  
Rules, Covenants, Bylaws are 3 very different subjects. A BOD can make rules with no input/voting from owners. That said, rules cannot override Covenants nor Bylaws but many try to use them to do so.
KerryL1
(California)

Posts:7217


05/24/2020 7:53 AM  
You're right, Augie!
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