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Changing Governing Documents

As many are aware, amending a condominium association or a homeowner association’s governing documents, be it declarations/master deed or bylaws, can be a trying experience that should not be undertaken lightly.

Step 1: Spell out what needs to be changed, added or removed.  This may seem obvious,

but there may be varying thoughts on this issue.

Step 2: Make sure there is a unified consensus by a majority of the board of directors on what needs to be done.

Step 3: Form a committee to explore the best method of obtaining the desired results.

 

Next Step

The information for changing the governing documents is almost always found within those governing documents under the “Amendment” section.  The following language is typical of what is usually found:

“Except as is otherwise specifically authorized herein, this Declaration may be amended only by the vote of not less than sixty-seven percent (67%) of the votes allocated to Home Owners.”

It is not uncommon for required voting percentages to be 80% or even 90% of the entire membership.  If the amendment is to change the common elements interest it is not uncommon to require 100% approval of the membership and 100% approval of all mortgagees.

“this Declaration may be amended only by the vote, cast in person or by proxy, at a meeting duly held in accordance with the provisions of the Bylaws.”

Generally speaking a meeting must be held for the amendment to be ratified.  However depending on certain situations as may be determined by the association’s attorney, there are methods for facilitating mail-in ballots.

 

The Association’s Legal Counsel

Although most governing documents spell out the amendment process, it is always advisable to have the association’s attorney guide this process.  Efforts to save on legal fees can usually be offset by wasted time and effort for legal missteps that accompany this process.  One misstep can void months of work if a legal aspect is missed.

It goes without saying that the association’s attorney should have in-depth experience in this process.  The attorney will interpret what exactly needs to be done and outline the process for clarification.  The attorney will draft and record the amendment and provide guidance along the way.

 

Reasons NOT to Amend Documents

Language that is obsolete or not relevant is usually fine left in place and not worth the effort to amend.

To conform to state statute changes; since generally state statutes supersede the governing documents, an amendment may not be necessary.  However there can be exceptions to this when your association may need to adapt a state statute.

To amend governing documents to specifically address issues that are currently left up to interpretation. For example: the documents currently ban vicious dogs from the association. It may be pointless to define the particular breeds that are deemed vicious.

 

Copyright – William Douglas Management, Inc. 2016