ACC & Covenants Ambiguity

Kelly,

I'm a little confused on what you are saying about a "append/adopt a Covenants Clarification Matrix". Is this an amendment to the covenants or a resolution?

Basically, Resolutions are decisions/rulings by the board that are proposed, adopted, modified or abolished at the board level. They can be used for clarifications or formalize specific rules or guidelines the board is allowed to adopt. There is a difference between the two.

Guidelines:

Typically CC&Rs specify that any exterior changes must have prior Association approval. Typically, Boards adopt architectural guidelines to specify what changes can or can not be done. These are in addition to anything that the CC&R's might have (as most CC&Rs don't have many specifics). Without these guidelines, the approval would typically rely on the personal taste of the approving authority. Therefore your CC&Rs might specify that no clotheslines can be installed but be silent on the paint color you can use. A Board might adopt specific colors or color style (colonial as an example) as a guideline. These guidelines would be the basis for the Association to reject a request to paint the home pink with yellow trim. The authority to create these guidelines are usually within the CC&Rs or inferred within the CC&Rs by requiring Association approval for exterior changes.

This is where your limitations on rock gardens would come into play. If a lot doesn't have permission to alter the exterior of their home by putting in a rock garden or rock border - they are in violation of the CC&Rs for not having the approval. The guidelines just tell them what will or will not be approved when an application is submitted.

Rules:

The Virginia Property Owners Act, specifically Section 55-513 establishes the authority for the Board to adopt rules. These are limited to the common area and/or areas that the Board has authority over per the governing documents.

Rules tend to be things like dogs must be kept on a leash, cars can not be parked on the street, etc.

Additionally, resolutions are used for clarification purposes. Your CC&R's might specify that no personal property can be left outside the rear yard when not in use. A resolution could be used to specify what the board considers personal property.

As I said, resolutions can be proposed, adopted, modified or abolished at the board level. This means that any board can propose, adopt, modify or abolish a resolution. To put it another way: What one board enacts another may abolish.

With this background, allow me to offer the following on your specific questions:

1. Is the new Board required to vote/pass/approve a document that will essentially serve as a legally binding document on the community at large when the majority of homeowners have expressed they do not want it?

The short answer is no.

The new board is only bound to actions of the previous board - not proposals. The new board may reject the proposal from the previous board or even modify it before adopting it. Some just chose to let the issue die and never call a vote on it. They are required to pass a budget, publish notice of meetings, hold an annual meeting, pay bills and set the annual assessment and enforce the covenants.

Typically, when it's a controversial subject, some Boards prefer to bring the vote to the membership even when they are not required to do so.

2. Can the new Board propose to have a community vote on this document as a means to ensure a fair and democratic process?

Yes. However, they are not required to do so as VA law and your own documents usually doesn't require them to.

This is why the membership should be involved in the Association or they could allow the few to impose rules on the many.

3. If so, how would that be accomplished?

The Board could do this at the general meeting or at a special meeting. If the topic is controversial, I would recommend a special meeting. The typical procedure would be:

Motion in a Board meeting to bring the document to the membership for a vote on adopting.
Motion Seconded
Motion Approved by the Board
Meeting date set
draft document published and sent to membership for review with meeting notice
meeting held
quorum noted
discussion held
ballots distributed
ballots counted
results announced
meeting adjourned
Life moves on.

4. How can the Board deal with intimidation tactics being employed by various homeowners and a current member of the Board (written and verbal threats of litigation, aggressive emails, improper and out of order email communications, etc.).

How to handle it is up to each individual board member. Some resign, some cave in, some fight, some fulfill the term of office but never run again. This is a part of life while serving on the Board.

Personally, I discovered that if the info is placed out in the open and the membership is kept informed of the facts (vs. personal opinions) then this type of stuff is usually minimized.

My board had a similar hot topic. I was for a change, a past board member was very vocal about being against the change. The board invited each of us to include an opinion paper in the proposal sent to the membership. One in favor, One opposing the issue. This allowed both sides to be heard. You might consider the same idea.

5. What can a Board do if it suspects that a current Board member is feeding information obtained from confidential Board communications to homeowners?
The honest answer is, not much. The discussions on the issue you are talking about should all be done in open meetings anyway. Keep the discussions there and not in e-mail. This way, there is nothing to forward.

Suspicion is not proof. An elected Director can only be removed in a recall election. To hold a special meeting for the recall will require the Board to present it's evidence. Since VA law is very specific on what can be considered confidential, the Board will then need to explain why the info should or shouldn't have been released. Either way, it's possible the rest of the Board will look petty and vindictive in calling such a meeting.

6. Should the Board request/invite the Association's attorney to an open Board meeting for the purpose of discussing homeowner and Board concerns?

You could. Or the Board could agree on a list of questions to propose to the attorney. Either way, it will cost money. Asking for questions to be answered might be less costly then having the attorney attend a meeting - as most charge by the hour.

Only the Board can decide if it would be money well spent and if the Association has the money to pay for it without the need for a special assessment.

7. Should the Board request/invite the Association's attorney to an executive session for the purpose of discussing Board concerns related to this document, its impact on the community, and the feasibility/advisability of proposing a democratic vote?

Since litigation was threatened, it would make sense to seek advise. However, I defer to my previous response. It can be costly to have an attorney attend a meeting. It may be better to agree on specific questions.

NOTE: If I understood correctly and it was a board member that threatened legal action, the Board should be aware that typically D&O insurance would not cover a director to director legal fight.

In this case, it might be an excellent idea to meet with the attorney in executive session. If you believe that the other director does not have a case, inviting him to the session can stop that talk in a heart beat. I say invite to the executive session because since he would be a party to the threatened legal action, the board would not need to include him (of course not inviting him can cause other issues).

Kelly, my best advise is for the Board to bring the issue to the membership and keep everything in the open. Include a supporting and opposing view when you send the meeting notice and draft document. This way it won't matter if the issue was adopted or rejected as it was done by the membership and the current and future boards can move on with other business. The board should also create a resolution (adopted by a majority vote of the board) on how any proxies assigned to the Board would be cast and include this in the mailing as well. Keeping everything above board in the open should minimize the complaints.

Tim