Amending By-Laws.

Started by DanL1 • 21 replies • 2580 views

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DanL1 (Florida)
Posts: 9

Posted:

Our HOA BOD would like to add an amendment to the By-Laws which would better define a section in the C&R's. There has been push back from a homeowner who says we are over stepping what this section in the C&R's states and that the board is interpreting more than what is stated. This section pertains to maintaining of a homeowners own property. Is the board asking for trouble by going this route?

TimB4 (Tennessee)
Posts: 21,062

Posted:

Dan,

The board can never please everyone. By formalizing your clarification by making an amendment to a governing document (vs. a policy resolution), it prevents reinterpretation by each board (unless they also want to amend the document).

I wouldn't discount any members objection without first researching it and truly try to see it from that members point of view. I would also run the proposed amendment through the Association's attorney to get legal advise on the specific wording and potential conflicts with existing laws that may have been missed.

You gave no information on the actual statement or the clarification. Specific advise on that can't really be given without knowing what the documents say. Perhaps posting the section you are trying to clarify and asking for opinions on how we would interpret the passage would allow you to see if the interpretations follow along the same path.

Tim

DanL1 (Florida)
Posts: 9

Posted:

Tim,

Thanks for the information. The section of interest is as follows:

"Each owner shall maintain all portions of that owners lot, including adjacent curb and road areas, in good condition free and clear of excess leaves, grass and debris."

The board has no other mechanism in the C&R's to fall back on when a homeowner decides to store excessive personal items likes grills, toys, chairs, etc. on their front and side yards. We're only looking to limit the amount of "stuff" so that there is a somewhat clean appearance. We were thinking that we could add a statement to the By-Laws that would be clearer and include wording limiting the amount of stuff that can sit there for weeks and months. What do you think? Are we reach too much? Thanks!

JanetB2 (Colorado)
Posts: 4,219

Posted:

Hi Dan:

There is some confusion in what you stated as you mentioned both the By-Laws and the CCR’s.

To amend the By-Laws under FL statutes the following would potentially apply.

Check your Articles of Incorporation … many HOA’s in FL fall under Chapter 617 and if your association falls under this chapter is states:

617.0206Bylaws.—The initial bylaws of a corporation shall be adopted by its board of directors. The power to alter, amend, or repeal the bylaws or adopt new bylaws shall be vested in the board of directors unless otherwise provided in the articles of incorporation or the bylaws. The bylaws may contain any provision for the regulation and management of the affairs of the corporation not inconsistent with law or the articles of incorporation.

However, if the issue is actually amending the Declaration of CCR’s (for an HOA, not Condominium) then the following sections would apply along with your governing documents:

720.306Meetings of members; voting and election procedures; amendments.—
(1)QUORUM; AMENDMENTS.—
(a)Unless a lower number is provided in the bylaws, the percentage of voting interests required to constitute a quorum at a meeting of the members shall be 30 percent of the total voting interests. Unless otherwise provided in this chapter or in the articles of incorporation or bylaws, decisions that require a vote of the members must be made by the concurrence of at least a majority of the voting interests present, in person or by proxy, at a meeting at which a quorum has been attained.
(b)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.
(c)Unless otherwise provided in the governing documents as originally recorded or permitted by this chapter or chapter 617, an amendment may not materially and adversely alter the proportionate voting interest appurtenant to a parcel or increase the proportion or percentage by which a parcel shares in the common expenses of the association unless the record parcel owner and all record owners of liens on the parcels join in the execution of the amendment. For purposes of this section, a change in quorum requirements is not an alteration of voting interests. The merger or consolidation of one or more associations under a plan of merger or consolidation under chapter 607 or chapter 617 shall not be considered a material or adverse alteration of the proportionate voting interest appurtenant to a parcel.

From your response to Tim I would imagine you are looking at amending your CCR’s.

TimB4 (Tennessee)
Posts: 21,062

Posted:

To me, that section is pertaining to the condition of the lawn, surfaces of the lot and has nothing to do with personal property. I would suggest that you amend the covenants to something similar to a passage we have in ours:

"No baby carriages, velocipedes, bicycles or other articles of personal property shall be permitted, when not in use, to remain outside the enclosed rear area of the premises. All such articles when left outside the enclosed area, may be impounded and a charge will be made for their return."

Tim

DanL1 (Florida)
Posts: 9

Posted:

Tim,

To amend our C&R's, I believe we need 51 percent approval from the homeowners. It sounds like we have no grounds for enforcement as the C&R's stand now and can only add a passage like you listed when we get 51 percent approval.

TimB4 (Tennessee)
Posts: 21,062

Posted:

Dan,

Although it is something you could place in your bylaws, the appropriate place for such language would be in the CC&Rs.

I would start a campaign informing the membership of the proposed amendment with it's pros and cons and bring it to a vote.

Tim

JanetB2 (Colorado)
Posts: 4,219

Posted:

Hi Dan:

I think you will be surprised at the number of homeowners who will be on board regarding an issue of this nature. Give it a try and see what happens.

Darn Tim … I actually had to look up the definition for “velocipedes” and found out it is human powered land vehicle.

PamelaM5 (Florida)
Posts: 85

Posted:

You might also want to add something about where trash and recycling cans are stored,as long as you're at it.

JeanneK3 (Maryland)
Posts: 562

Posted:

DanL:
You don't have to go through the expense of amending bylaws for what you are trying to do. Just put more stringent language with penalties in your rules and regulations which the board can do without a vote of the community.
Nevertheless, I would poll your homeowners as to what they think of the idea. I think you'll find most are in favor of it. If not, start a campaign telling them about maintaining property values,etc. They'll come around.
Jeanne

DanL1 (Florida)
Posts: 9

Posted:

Tim,

Our association of 170 homes, generates little to no interest from the homeowners, until something is needed or a violation notice is given out. Infact, our association of 20 years is on life support. The reason our BOD was looking at amending the By-Laws to include some wording on maintaining lots of personal property being scattered about, is because the board can per the Articles. Would never get close to 51% to a meeting to amend the C&R's. The BOD would have to go door to door and beg.

DanL1 (Florida)
Posts: 9

Posted:

Jeanne

We don't currently have a Rules and Regulations document. Only ByLaws, C&R's, and Fine Schedule. What does it take to developed a Rules and Regulations Document? Thanks!

Dan

TimB4 (Tennessee)
Posts: 21,062

Posted:

Dan,

Rules govern the common area. Guidelines establish a standard that is used when exterior changes are made to the property. Your Architectural committee would use the guidelines when approving or disapproving a request.

Some rules border on new regulations, like trash cans must be returned to their storage area by 7 p.m. the evening of trash collection. However, a rule can not typically place a new condition or restriction on an individual property. If they do they run the risk of being overturned if challenged in a court of law.

To create rules and guidelines, the procedure would typically include:

1) Committee of homeowners established to develop draft document
2) Board reviews the document and makes changes
3) Board publishes the draft document and holds a general membership meeting to get feedback
4) Board reviews the document and makes changes based on feedback
5) Board requests legal review and advise on the document
6) Board reviews documents and makes changes based on legal advise
7) Board adopts the document as a policy resolution
8) Board publishes the document and gives each current member and all new members a copy
9) Board enforces new rules/guidelines

Dan,

I understand the easier path is to create the new restriction as a bylaw amendment. However, this leaves the issue open to possible legal challenge. I'm not saying it won't stand up if challenged, I'm saying the safer path would be to make it an amendment to the CC&Rs.

If you don't have the participation do what all other Boards do - solicit proxies for the meeting. You solicit proxies by going door to door, sending a proxy form with a self addressed stamped enveloped to return them in, lots of flyers explaining the issue and mentioning the meeting, phone calls, etc. You put in the leg work and collect enough proxies from those who typically don't show up to the meetings so you have your quorum and, via the proxies, usually enough votes to have the proposal be adopted.

Tim

JoanneD1 (Arizona)
Posts: 447

Posted:

Based on past experience, I would try to change the CC&R's because other than your state statutes, those are at the top of the governing chain and of course you would have to get your legal person involved so that you do it right. Don't have time to read the entire thread, but from your first posting, I have the impression that you are talking about an owner maintaining a common area such as the curb and road. If the owner is putting debris there, I can't imagine that there isn't something that addresses that in your documents. It is not easy to change CC&R but I would advise you to do a sales campaign BEFORE the actual vote and inform your members why you feel there is a need. You can also NEVER create a rule that will be in conflict with the CC&R or the state statutes. The bottom line on any of this is in order to manage and govern properly......anyone on a board or even a committee must KNOW THE GOVERNING DOCUMENTS. ALL MUST BE ON THE SAME PAGE. Our community is over 30 years old and boy have times changed since then!

DanL1 (Florida)
Posts: 9

Posted:

Tim,

Thanks for the details. A few members on our board want to go the By-Laws route. Myself, certainly not as well as informed as I should be, have a uneasy feeling about going down this road. I appreciate everyones guidance. I have decided to present your approach. Not sure how it will go down at our next meeting. If it looks like I'm still the odd man out on this, I will need to step down. I don't have the stomach to do things improperly.

Thanks,

Dan

TimB4 (Tennessee)
Posts: 21,062

Posted:

Dan,

Again, it's not necessarily improper to pass it in the Bylaws. It just has more potential issues going that route.

I understand your concern about doing things improperly. If the Board chooses to use the Bylaw route, then have them put it to a vote and vote against it. That way there is a record. I hope you reconsider leaving your board. You have demonstrated what all Boards need, members who are willing to put in the research to see how things are done properly.

If you leave your Board, you will lose the ability to interject the appropriate way of doing things. By having the issue up for a vote and voting against it, you have established, for the record, that you believe it should be a different way.

Best way for me to explain it is: Just because the battle is lost doesn't mean you can't win the war.

You association needs you to help keep the Association on course. Based on your post you agree with the rule just not the methodology. Perhaps, if the board can't agree on the course of action, you can propose that the Board seeks legal advise as to how the restriction should be worded and where it should be placed. Yes it will cost $300 or so, but it could be worth it in the long run.

Tim

DanL1 (Florida)
Posts: 9

Posted:

Tim,

I appreciate the words of encouragement! We are a small volunter board, with a small budget. We don't have an attorney on "standby" nor does our board have protections like D&O insurance. As president, I have spent more time than I expected trying to resolve/dealing with violations and now a drainage issue in our development. Even if I vote against this possible amendment to the By-laws and still it passes, I certainly would have to be involved if it is enforced upon a homeowner who may be in violation of it, then they disapprove of how it suddenly appeared and decides to go down the legal road. If you recall, there is a homeowners who refuses to limit the amount of personal items scattered in their front and side yards. So even if I vote against it, it passes, is enforced, then legally challenged, and I'm the President of the HOA, I believe I will be sucked into this legal headache that I disagreed with, and with no protections. Not sure if that's worth it. I agree with you that it needs to be carefully worded and placed in it's proper place along with guidance from an attorney before I'm comfortable with it.

Thanks!

Dan

JoanneD1 (Arizona)
Posts: 447

Posted:

I don't want to throw water on anyone's parade, but if you have contentious folks in your HOA, there is no way in heck I would serve on anything WITHOUT the protection of insurance!!! You need to have a special assessment for it or whatever or put yourself at risk! The government does nothing as far as helping HOA and disputes that develop. Even though we have the insurance and a statement about the board not being able to be sued in the CC&R's.....they can still find a way. We had a sleazy attorney that lived here and we filed a personal judgment against him and he filed an outrageous counterclaim that we had to drop because we were warned by legal that his guy could turn a crank on us and it would not cost him a penny, but could bleed us for a ton. Sometimes the systems don't seem fair.

TimB4 (Tennessee)
Posts: 21,062

Posted:

Dan,

I concur with Joanne. Every Association should have the following insurance as a minimum:

Liability - Protects the Association if someone gets injured on the property or in other cases where the Association is liable for damage.

Directors and Officers (D&O) - Protects the Directors and officers if they are personally sued. Also protects the Association in various legal actions.

Crime (or a fidelity bond) - Protects the Association if a Director, Officer or Employee decides to take the money and run.

If your Association, no matter how small it is, doesn't have these three policies (or one policy that covers all three) then they need to get them asap.

Although it isn't necessary, typically the registered agent for the Corporation (the HOA) is a lawyer in a law firm. This lawyer usually doesn't require a retainer but will offer advise on an hourly fee and charged when services are rendered. Therefore, it's possible that your Association has an attorney but no one is aware of it.

Tim

DanL1 (Florida)
Posts: 9

Posted:

Tim,

Our association does carry liability insurance. Many of our board members believe that a volunter HOA board can not be sued in our state (FL). I have researched this and have found information both ways. I'll look into who the register agent is for our non profit corporation. Thanks to you and Joanne for all of you help!

Dan

JoanneD1 (Arizona)
Posts: 447

Posted:

I will keep referencing the fact that you must know your governing documents and the state laws because they are the playbook for governing your HOA. All it takes is one owner to cause you great headaches and doesn't it always seem to be that one no matter what. My HOA is very sensitive to litigation because we have owners of means who have attorneys on retainers so it is no sweat for them to fire something off and here is a perfect example of what I am talking about. Our CC&R's say that mechanicals must be shielded from view. Our HAVC units are mounted on the roof tops. Well over the years, there have been replacements and the shielding has not been maintained. We wrote a letter to a new owner and his return response was from his lawyer on retainer along with 33 photos of other units in the community that showed some parts of the ac Units. This owner's units could be seen from the public parkway when passing our community, while the others were not. Anyway, this hot shot said he would file a discrimination suite unless we made everyone cure the problem. So who wins when you have to deal with these kinds of attitudes? The lawyers of course! We took no action on anyone. That wasn't right either.The most difficult task of an HOA board in my opinion is enforcement.......when to, how to, how much, how little........fairness!

JanetB2 (Colorado)
Posts: 4,219

Posted:

Hi Dan:

It is my understanding in FL currently there are minimum insurance standards for condominiums, but not HOA’s. However, there is also the current legislation being considered for both condos and HOA’s as noted in the following article:

http://www.floridacondohoalawblog.com/2011/03/articles/legislation-1/2011-florida-legislative-session-opens-today/

SB 1516/HB 1195: For both condos and HOAs, this bill would:
• Require insurance companies to notify all owners (by certified and regular mail) if the board cancels or does not renew its required insurance coverage (50 units or less) and enable a majority of the voting interests to direct the board to obtain substitute coverage.

I would agree with Tim in that to protect the HOA, board members, and association members that all HOA’s should potentially have insurance unless there are indemnifications in the laws offering protection against lawsuits. If I were you I would carefully read your By-Laws to determine exactly what they state with regards to being able to sue the board members. My understanding in FL there can be potential indemnification in the documents, but if not stated it could also be bar the door, if someone does sue as it is potentially wide open.

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