Unauthorized ARC guidelines

Hi RgV:

Welcome to HOAtalk.

Tim is from Virginia and very knowledgeable regarding the state statutes. I will let him more fully answer your questions; however, as an example the below statute provides that no matter what a board implements the members can reverse, if so desired by the majority.

§ 55-513. Adoption and enforcement of rules.

A. Except as otherwise provided in this chapter, the board of directors shall have the power to establish, adopt, and enforce rules and regulations with respect to use of the common areas and with respect to such other areas of responsibility assigned to the association by the declaration, except where expressly reserved by the declaration to the members. Rules and regulations may be adopted by resolution and shall be reasonably published or distributed throughout the development. A majority of votes cast, in person or by proxy, at a meeting convened in accordance with the provisions of the association's bylaws and called for that purpose, shall repeal or amend any rule or regulation adopted by the board of directors. Rules and regulations may be enforced by any method normally available to the owner of private property in Virginia, including, but not limited to, application for injunctive relief or damages, during which the court may award to the association court costs and reasonable attorneys' fees.

1)Can notice be given electronically if the by-laws say US Mail or in person?

VA § 55-515.3 would be the controlling document here. It says that "Unless the declaration expressly provides otherwise" that electronic notice can be given. Per VA § 55-509, Declaration is defined as "any instrument, however denominated, recorded among the land records of the county". In other words the CC&Rs.

Since the Bylaws are not the CC&Rs, then electronic delivery can be done (unless it deals with foreclosure proceedings, enforcement actions or assessment liens.

2)Is notice proper if 25% of the people never receive it and there is no assurance it didn't go into the junk folder for other users?

Proper notice is given if it is sent/published to the membership. Just as notices published in newspapers are legal even though there is no assurance that interested parties read or even subscribe to that paper, there is no requirement on the Association that the membership received, read, understood or tossed any notice.

VA § 55-515.3 Item F does require that the Association must make reasonable accommodation, at its expense, for anyone who does not have the capability or desire to conduct business using electronic transmission. however, the way it's worded sounds like the burden is on the individual to notify the Association of this vs. the Association determining on their own if someone does not have access.

3)The bylaws talk about noticing members and votes by members but the BM seems to equate members with lots. More than one member may be on a deed although typical voting is 1 vote per lot, the by-laws clearly says members when discussing changes to the ARC guidelines.

I suspect somewhere in your governing documents that the term "member" is defined and "voting rights" are also defined. Typically, these equate to lots. If one lot is owned by more than one individual (or by a company), then the owners of the lot must determine among themselves who will register the vote.

In my Association, these items are defined within our CC&Rs and, to some extent, restated in the Articles of Incorporation and The Bylaws. I would recommend that you review your governing documents to determine if the terms are defined within them.

Only one proxy was allowed per lot and all members did not sign the proxy. In fact because they were done electronically only one member could have completed a proxy.

I am of the expectation that your Association is incorporated as under the VA Non-Stock Corporation Act. Therefore, VA Non Stock Corporation act, § 13.1-847 addresses proxies. Per this act, and per VA § 55-515.3, proxies may be submitted electronically.

Any member may appoint a proxy. § 13.1-847 specifies that the proxy is valid when it is accepted by the Corporation (i.e. the Association).

4)Can a proxy be used to vote for an issue that was not properly noticed in the agenda soliciting the proxy (especially if the by-laws state that all ARC guideline changes must be noticed for 30 days in writing before a vote of the members)?

VA law specifies that a vote can be cast by proxy. The issue of proper notice, quorum requirements and ballots would be the determining factors in certifying the vote on any issue.

5) Shouldn't existing variances to the new rules be grandfathered?

Ahh, this is the stickler with any guideline change. Technically, (as I personally found out) for civil issues to be grandfathered, the grandfathering must be specifically mentioned. Please note, this is not the same as having something previously approved.

Lets say you installed a shed on your property. In accordance to your governing documents, you asked for and received permission from your Association prior to the installation. The following year your Association adopts a guideline that sheds are not allowed. Since you asked for and received permission, as long as that existing shed is kept in good repair and working order - your shed is fine. However, based on the guidelines, you should not expect permission to replace the shed or install a larger/smaller shed when yours wears or is destroyed.

This would also be applicable to any items that were on your house when purchased providing that the Association did not identify them as being non-compliant. VA § 55-509.5 Paragraph A, Item 9, requires that such a statement be made within the disclosure package.

Now, if you had a garden flag in the front of your home and failed to get permission (because there was no guideline about garden flags) and the new requirements now specify no garden flags, you would be in violation of the guidelines. WHY? Mainly because you failed to get permission before installing it and your CC&Rs say any changes to the exterior of your home requires permission.

Note the Virginia Property Owners Act does specify that the rules shall be reasonably published or distributed throughout the development. Posting them on the website may be considered reasonable. Personally, I would print them and deliver them to the members.

6) What is the best way to stop the BM from enforcing the new ARC guidelines until proper input from the members is achieved, notice is properly provided and a fair vote can be had amongst all owners?

First you need to identify what needs to be challenged. I see two possibilities.

A - Challenge the Guidelines

You stated "At the meeting the Pres indicated that the new rules where final (based on the BM vote two weeks earlier). VA law § 55-513 (part of the VPOAA) specifies that the Board has the authority to adopt rules and guidelines unless "expressly reserved by the declaration to the members".

Again the Declaration is defined as the CC&Rs and not the Bylaws. Therefore, it appears that their may be a conflict between your Bylaws and the Virginia Property Owners Act (VPOAA). When this happens, the VPOAA will control.

Based on what you have posted, I believe that this is what the Board is basing their authority on. Lets expect this is the fact and move on from there.

VA law § 55-513 also states that the membership can abolish the rules by "A majority of votes cast, in person or by proxy, at a meeting convened in accordance with the provisions of the association's bylaws and called for that purpose, shall repeal or amend any rule or regulation adopted by the board of directors."

Therefore, to remove those guidelines, the membership needs to call a special meeting and vote on removing them.

You need to follow the specifics in your governing documents to call a special meeting but the typical method is as follows:

1) Circulate a petition for signatures of owners (one per lot)to call a special meeting for the purpose of abolishing the new guidelines and return to the old guidelines.

2) Once you have the number of signatures required by your governing documents (I prefer to have more than enough) send the petition to the Board of Directors via certified mail with a copy to the registered agent and a copy to the property manager stating that in accordance with the VPOAA, § 55-513, and your governing documents the membership, represented by the petition, desires to call a special meeting for the purpose of abolishing the guidelines adopted by the Board and to return to the previous guideline that were adopted by the membership. Specify a date for the meeting be held (remember any notice requirements).

The Board will need time to verify the names on the petition - therefore they should have printed names along with signatures and lot numbers.

3) The Board should or you can arrange a meeting site, date and time and draft an agenda.

4) Notice of meeting is published (you should personally mail it to all members at your expense if you believe the web site is not well read).

5) YOU should solicit proxies from all members (going door to door).

6) Day of meeting:
Confirm quorum requirement
Hold Discussion
Distribute ballots
Close polls, collect and count the ballots
Announce vote
Inform membership of results

B - Challenge the Process

Contact an attorney and challenge the adopted guidelines based on the following:
1) Your bylaws control vs VA Law § 55-513
2) Association is in violation of notice requirements by only using electronic methods

Option B will cost you and the Association a lot of money in legal fees and court costs and you might not win. I would suggest using Option A.

Hope this helps.

Tim

BTW: To prevent a similar issue in the future, I would recommend that start a separate campaign to amend your CC&Rs to include the guideline passage you said were in your bylaws as this would nullify that section of VA law § 55-513 which gives the Board the right to adopt the guidelines.

Wow, thanks Tim this is great. I have a significant amount of work to do to review all of this.

Breaking this down into smaller pieces in order to manage it, let me ask a few follow-up questions.

First lets talk about notice. The CC&R specifically states "written notice of any meeting...shall be sent to all Members not less than 30 days not more than 60 days in advance of the meeting."

The CC&R then contains a section called "Architectural Control" which lists the original ARC Guidelines.

The CC&R then states that "an amendment may be proposed by the Boardof Directors or at least 20% of either voting class of Members. No proposed amendment shall be effective unless it has been adopted by an affirmative vote or written agreement of at least 51% of the Members. Notice of the subject matter of a proposed amendment shall be included in the notice of any meeting of the Association at which the proposed amendment is to be considered, and shall be served upon all Owners in a manner hereinafter provided for service of notices."

The CC&R states that written notice of any meeting called for the purpose of taking any action authorized under this Sectiondefines Notice as follows "All notices required to be served upon Owners pursuant to this Declaration or the By-Laws shall be sufficient if delivered to the Lot or mailed to the Owner at the Lot mailing address by regular mail... the effective date of the notice shall be the date of delivery to the Lot and a date 5 days after deposit in the mail in case of notice sent by mail."

Note: The CC&R uses the term Member or Owner. The CC&R defines Owner as a record owner of the lot excluding any persons having merely a security interest. All Owners are considered Members, however Members are only allowed to 1 vote per Lot they own. Multiple Owners of a single Lot shall be deemed one Owner for puroses of the Declaration.

Looking strictly at the CC&R and not the By-Laws, here are my notice follow-up questions:
1) It clearly lists US mail and hand delivery period, it does not provide for any other means such as facsimile, email, telephone, other means of notice (e.g., time travel, warping, etc.). I would think that the specific wording that recognizes two forms of delivery would have to trump an assumption that other means not listed could be used. I got the sense from Tim's comments that VA allows electronic unless it is otherwise stated. Well if it is affirmatively stated that there are only two means doesn't that exclude all others.

2) Notice has to be provided to all Members. There are two issues here. One if members means all persons listed on the deeds than most lots will than 2. The HOA only allows one email registration to their web site. Second, not everyone is register on the web site so email do not cover all Members even if you assume that Members only mean one person per lot.

3)If you consider additions to the ARC guidliens in the CC&R to be changes, then these have to be voted on by the members at a meeting after receiving proper notice. The annual meeting notice did not meantion the ARC guidelines at all. Any proxies that were given therefore for the annual meeting could not be presumed to agree to votes on the ARC guidelines. In addition, the Board approved the new guidelines and never let the members vote so the lack of notice may be a moot issue in this respect.

4) How you you confirm delivery of an email. The guidelines deal with delivery dates for mail and hand delivery. Email can go into a junk folder, be blocked bby a spam filter or the owner could have changed and the new onwers never registered with the association so the email is the pror owner's email. Without a confirmation receipt it seems pretty loose even despite the fact you are not serving all Owners (regardless of how you define Owner).

To be fair, a later section of the CC&R states that thh Board "may adopt, amend and enforce complaince with any reasonable rules and regulations relative to the operation, use and occuancy of the Lots and Community Facilities consistent with provision of this Declaration." It's my position that since the ARC Guidelines are specifically set forth in the CC&R and there is a specific procedure to amend the CC&R then those procedures trump the Board's ability to create a new ARC Guideline. Note: the new material is label "New ARC Guidelines". Clearly the Baord can make up rules, but it would be inconsistent to think they could change something unilaterially that the CC&R says must be a 51% member vote. Do you all agree?

This is enough for one chunk. I would also note that the CR&R incoprorates the By-Laws and the By-Laws go on ot sates specifically that the notices SHALL be mailed to the last known address of record using US mail or hand delivered.

RgV,

As you know State and Federal laws continually change (adopted, amended, abolished). In private life and within the corporate world there is an order of precedence of what law/document trumps another when there is a conflict between two or more laws/documents. The law or document that has precedence is called the controlling document. Sometimes the laws or documents themselves will specify what will be the controlling document if there is a conflict. Within HOAs the typical order of precedence is:

Federal Law - like Fair Housing Act, etc.
Federal Regulations - Like FCC satellite regulation.
State Law - Like VA Property Owners Association Act (VPOAA)
County Regulations - Like Building codes
City Ordinances - Like Towing/Parking
Declaration of Covenants Conditions and Restrictions - Your CC&Rs
Articles of Incorporation - The Document creating the corporation known as your HOA
Bylaws - The list of procedures on how the Corporation is to be ran
Resolutions - Decision made by the Board of Directors

1) It [CC&Rs] clearly lists US mail and hand delivery period, it does not provide for any other means such as facsimile, email, telephone, other means of notice (e.g., time travel, warping, etc.). I would think that the specific wording that recognizes two forms of delivery would have to trump an assumption that other means not listed could be used. I got the sense from Tim's comments that VA allows electronic unless it is otherwise stated. Well if it is affirmatively stated that there are only two means doesn't that exclude all others.

Most CC&Rs are created with a standardized form and language that covers the basics (a boilerplate). The VPOAA was amended in 2010 to include § 55-515.3. Use of technology, which allows for the use of electronic methods.

Since that section of law defers control to the Declaration if your Declaration specifies that notices will be mailed or hand delivered, then this is what is required to be followed. I've only seen method of notice delivery mentioned in Bylaws and not the CC&Rs.

IF your CC&Rs do have method of delivery stated then your Association must follow the method of delivery in the CC&Rs. Electronic delivery can be done in addition to mailings.

HOW TO CORRECT - Once you have confirmed that it is the CC&Rs and not the Bylaws that mention the method of notice, Start with a certified letter to the Board mentioning your concern that the Board is in violation of the CC&Rs as it applies to meeting notice. Identify that although VA § 55-515.3 does allow electronic methods it defers control to the Declaration of Covenants, Conditions and Restrictions. Since the CC&Rs, identify article/section, specify notice will be by US Mail or hand delivered failure to use that method could affect the validity of any decision made at meetings where proper notice was not given. Ask that they verify this with the Association's attorney and take any necessary steps to correct. Send a copy of that letter to the registered agent.

NOTE: Expecting that the Board used VA law § 55-513 as the basis for passing the guidelines, any notice requirement unmet will probably not nullify the new guidelines.

2) Notice has to be provided to all Members. There are two issues here. One if members means all persons listed on the deeds than most lots will than 2. The HOA only allows one email registration to their web site.

As my wife says to me at times, your over thinking this issue. The Association is required to send notice to the members address on file with the Association. If there are more than one owner of a property, it is up to the member to inform the board of more than one address not for the Board to locate the members.

I personally have 6 different e-mail accounts. I would not expect (nor would I want) anyone to send the same info to all addresses.

HOW TO CORRECT - Mention the issue to the Board and ask how they handle instances of more then one owner of a property and each have separate mailing addresses. I suspect that their answer would be the same as my Association - the two owners identify one party to be the representative of the owners and the Association and the Association deals with that one individual.

Second, not everyone is register on the web site so email do not cover all Members even if you assume that Members only mean one person per lot.

This is typical of all Associations. The phrase - you can lead a horse to water but you can't make them drink, comes to mind. Associations can make the information available but can't force the membership to read, understand or participate in the process.

I do understand what you are saying and you believe that if notification was made by mail there would be a larger turn out at meetings. Understand that it costs money to print and mail notices. Therefore, the Board may be trying to cut expenses by using the website as the only means of notification. They are probably doing this with good intentions.

If your CC&Rs specify the notification notice then once you inform the board of your findings and they confirm the findings - this may no longer be an issue.

3)If you consider additions to the ARC guidelines in the CC&R to be changes, then these have to be voted on by the members at a meeting after receiving proper notice. The annual meeting notice did not mention the ARC guidelines at all. Any proxies that were given therefore for the annual meeting could not be presumed to agree to votes on the ARC guidelines. In addition, the Board approved the new guidelines and never let the members vote so the lack of notice may be a moot issue in this respect.

RgV, You are expecting that the new guidelines were an amendment to the CC&Rs. If this is the case, then you would be correct that the issue could be challenged on improper notice - providing you found members who were not aware of the meeting.

HOWEVER, Based on your postings and VA law, I suspect that your Board did not amend the CC&Rs. They adopted a resolution creating additional guidelines and rules as authorized in VA law and (per your recent post) your CC&Rs.

There is a major difference between the two methods. Amending the CC&Rs requires membership approval. Adopting a resolution only requires Board approval. Per your posting, the Board mentioned that the guidelines were adopted by the Board, which indicates that it was a resolution.

NOTE: If there is a conflict between the resolution and the CC&RS, the CC&Rs would control.

4) How you you confirm delivery of an email. The guidelines deal with delivery dates for mail and hand delivery. Email can go into a junk folder, be blocked bby a spam filter or the owner could have changed and the new owners never registered with the association so the email is the pror owner's email. Without a confirmation receipt it seems pretty loose even despite the fact you are not serving all Owners (regardless of how you define Owner).

How do you confirm delivery of first class mail? There is no receipt that first class mail was delivered or read. US Mail can get lost in a machine, improperly delivered, stolen, returned due to change of address or the owner can toss the mail like junk mail without opening it.

The burden of proof is in the sending not on the receipt.

Clearly the Baord can make up rules, but it would be inconsistent to think they could change something unilaterially that the CC&R says must be a 51% member vote. Do you all agree?

I concur that the Board could not legally amend the CC&Rs without a membership vote. However, they can (and do) adopt resolutions and guidelines that are in addition to the CC&Rs.

So this [improper notice] basically means the Annual Meeting was not properly noticed or conducted and the Board is not valid. I'm not sure this by itself overturns the Board approval of the new ARC Guidelines which apparently happened prior to the Annual Meeting.

I would have to agree that if proper notice was not given the election could be challenged. To challenge the election you will need to consult a local attorney and possibly file a legal action if a request for a new election is denies or goes unanswered.

NOTE: Expecting that the new guidelines were a resolution adopted by the Board prior to the annual meeting, then the new guidelines would still be legal.

In other words the Board can not circumvent the requirments of the CC&R by simply calling an ARC restriction a rule. The fact is the new restrictions are labeled "New ARC Guidelines". Anyone buying this?

If you are not aware, CC&Rs and Guidelines might perform the same function but they are two very different things.

CC&Rs are the covenants, conditions and restrictions you agreed to comply with. Amending the CC&Rs require membership approval.

Guidelines are the standardizations the Board established to give guidance on what changes would be authorized or (usually) denied. They can typically be changed by Board of Directors. This is where the Association might say your house has to be painted a certain color.

Sometimes, the Association causes the confusion. Lets take the example that you want to paint your house purple. the CC&Rs specify that you must get permission to make any exterior changes. The guidelines say houses must only be painted white. You didn't read your documents and painted the house purple. Shortly after you get a letter from the Association saying "you are in violation of the guidelines for painting your house purple" when in reality, you would be in violation of the CC&Rs for not getting permission prior to painting your house purple. The guideline only specified to the approving authority not to approve any request to paint a house purple.

About 8 years ago an owner replaced their mailbox (which was run over) with a much nicer quality mailbox on a metal pole. . . The prior ARC Guidelines stated that Owners did not need to get ARC approval to replace mailboxes provided "the new mailbox looked is similar". . . . Flash forward four year, we now have new guidelines which specifically state "No metal posts" -- Is the owner in violation?

Possibly. Let me ask you a few questions:

1. What is the exact wording of the info about mailboxes?
2. What document is that wording located?
3. What is the exact wording of the new guideline?
4. Did the old wording mention anything about posts.

I ask because there are technicalities that need cleared up. Based only on your posting, the guidelines said permission was not needed for new mailboxes providing that they were similar. When you buy a replacement "mailbox" at the store you are purchasing the box itself and not what the box is mounted to. If the guideline did not mention posts (or what the mailbox was attached to) then it's possible that the new guideline is not in conflict with the old. It is just clarifying a gray area about what the mailbox is attached to.

Without reading the documents, I can't say for sure.

The new guidelines drop many of the prior statements which previously indicated approval was not required and now state unless otherwise indicated that approval is not required, approval is required for all changes to the property.

Again, without reading the documents in question, it's difficult to comment. I will only say that to change the CC&Rs require membership approval but to adopt additional guidelines or clarify gray areas of the CC&Rs can be done with a resolution without membership approval.

If I can't get enough members on Board, it may come down to blowing up the Board (i.e., since they were not properly elected at an annual meeting), which means they will not have the quorum required to prosecute the "new violations". Obviously this is a lose-lose result which doesn't serve the community very well. I'm trying to schedule a meeting to see if Stalin will consider letting a new committee rewrite the ARC guidelines with Member notice and input this time.

For what your saying here, it can only be done through the court system. This will cost you and the Association (which you will be required to pay your fair share of) time, energy and money. This is a decision that can only be made by you as you are the only one that needs to determine how much it's worth to you. I'm glad you realize that it's a lose-lose situation.

Again, expecting that the guidelines were a properly adopted resolution - this action will not abolish the guidelines.

OTHER OPTIONS - Resolutions can be adopted, modified or abolished by any board. Recommend you get a group together and run for the Board. IF elected, and you have enough like minded people on the board, you can abolish the guidelines or rewrite them. Of course, the board following yours can do the same thing.

BTW, the new ARC Guidelines state that the Association can enter a Lot and make changes to bring it into compliance (without a court order) and charge the Owner for the cost. This seems like a law suit waiting to happen.

My governing documents say the same thing. I will mention that we were given legal advise to not use this method of enforcement unless we absolutely have to and we were encouraged to check with him prior to using it.

They recommend using what is authorized in VA law - § 55-513, $10 per day up to 90 days (it's unclear if the 90 day clock can start again if you hold another hearing).

Hope this helps (it took me 1.5 hrs to research and write it),

Tim

RgV,

I wanted to add one more comment in regards to what you posted about VA § 55-508. Applicability.

You Stated:

"First, VA 55-508 restricts the applicability of 55-515.3. "This chapter shall not be construed to affect the validity of any provision of any declaration recorded prior to July 1, 1998...." "This chapter shall not be construed to affect the validity of any provision of any prior declaration; however, to the extent the declaration is silent, the provisions of this chapter shall apply...." Our declaration (CC&R) was filed in 1990. Second, the CC&R is not silint on how notice must be provided (i.e., it provided two means US Mail and Hand delivery). The same requirements are listed in the By-Laws which are specifically incorporated by reference in the CC&R.

Whenever you read a legal document you need to realize that most of them are based on the conditional statements. Similar to the conditional programing method of "if, then, else". If something occurs Then this shall happen else (unless/otherwise) this shall happen.

Your posting failed to acknowledge the first condition of the Law This chapter shall apply to developments subject to a declaration, as defined herein, initially recorded after January 1, 1959. What the passage you quoted referred to was the VA Subdivided Land Sales Act § 55-336. Developements prior to 1998 could have been structured under that act or the VPOAA. That paragraph is saying that a Declaration under the Land Sales Act is still valid.

IF your development is subject to a Declaration recorded after 1959 Then then they are subject to the VPOAA Unless the declaration was recorded prior to July 1, 1998 under the Subdivided Land Sales Act.

IF the development was under the Subdivided Land Sales Act THEN this law will not invalidate provisions of that declaration UNLESS the declaration specifically says the VPOAA applies.

Here is a link to a different thread within HOAtalk that discusses how to read laws:

http://www.hoatalk.com/Forum/tabid/55/view/topic/postid/103015/Default.aspx

Tim

I did find a prior resolution which states that electronic notice can not be used to serve ntice until a member has provied written approval for the Association to use it.

Do you think someone will agrue that by signing into the web site you have provided written permission for electronic notice? I would think that it would have to be a little more obvious than that if you we granting approval of electronic notice.

Thoughts?

Oh on the humorous side, the electronic version of the ARC guideline that the Board approved last month, which were only emailed and posted on the web site, indicate that anyone who doesn't have electronic access can request the Association send them a hard copy by US Mail. That's a good thing to know.

The Boaard agreed that the new ARB guidelines should only apply on a going forward basis to the extent there are new items not previously covered. Does anyone have any resolution wording which addressed grandfathering of existing conditions when the ARB guidelines are modified?

This resolves a major issue with the Board's action. Hopefully this also indicates a willingness on the part of the Board to work these issues out amicably.

Thanks. It's interesting that you indicate it was approved by the members. Our Board is taking the position that it can impose new ARB Guidelines without membership consent, despite the CC&R containing a section listing ARB guidelines and requiring amendments need member approval. See my other post, I'm not skilled enoughnto provide link. They propose a Board resolution to incorporate the grandfathering provision.

Also the old guidelines said certain changes did not require ARB approval or were silent to a action which would leave you to believe that it didn't require approval. The new guidelines say all changes require ARB approval unless specifically indicated that they do not. Many of the items that previously said no approval required, now require approval. In addition, there are new items that are not structural in nature that now require ARB approval (e.g., where your house numbers must be located and prohibitions against numbers in any other location). I'm going to they a modify your wording to reflect that a new requirement will only be imposed on a forward looking basis.

Any thoughts?