CCR Amendments – Votes or Written Approvals?

Started by LindaC25 • 12 replies • 2195 views

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LindaC25 (Kentucky)
Posts: 2

Posted:

We’d like to learn what the CCRs of other HOAs say about approvals for amendments to the CCRs. Do your CCRs require the “vote” of X-percent of the owners, or do they require the “written approval” of X-percent of the owners?

Also, what do your CCRs say about disallowing the votes, or approvals, of members who are in arrears or noncompliance? Have you had any experience amending the CCRs without allowing all members of the association the opportunity to participate in the approval process? How do you calculate the percentage of affirmative votes?

Thank you.

TimB4 (Tennessee)
Posts: 21,062

Posted:

Hi Linda and welcome to the forum.

Every State has different laws regarding amendments to governing documents. Please keep this in mind as you read responses to your questions and know that what is allowed in one State might not be allowed in yours.

Here are my responses:

Quote:

Posted By LindaC25 on 08/28/2011 2:16 PM

Do your CCRs require the “vote” of X-percent of the owners, or do they require the “written approval” of X-percent of the owners?

CC&Rs - approval of 51% of the members
Articles of Incorporation - 51% of the votes entitled to be cast
Bylaws - approval of 51% of members present at a meeting called for that purpose (quorum requirement for a meeting is only 10% of those eligible to vote)

Examples based on 100 lots with 95 lots eligible to vote:

CC&Rs - 51 needed to amend
Articles of Incorporation - 49 needed to amend
Bylaws - 10 needed to hold the meeting 51% of the votes cast (6 needed to amend if only 10 showed)

Quote:

Posted By LindaC25 on 08/28/2011 2:16 PM

Also, what do your CCRs say about disallowing the votes, or approvals, of members who are in arrears or noncompliance?

Non-Payment of Assessment - Board has the right to suspend voting privileges but it's not automatic.
Violation of covenants - Board has right to suspend voting privileges, but it's not automatic and per CC&Rs may only be for 30 days.

Quote:

Posted By LindaC25 on 08/28/2011 2:16 PM

Have you had any experience amending the CCRs without allowing all members of the association the opportunity to participate in the approval process?

This depends on how you are defining participation.

Do I have experience in amending our governing documents - Yes
Participation - those entitled to vote could vote. Those not entitled to vote were informed ahead of time, had the option of paying past assessments at the meeting to restore voting rights and even if they could not vote, they were given an opportunity to speak on the issue.

Quote:

Posted By LindaC25 on 08/28/2011 2:16 PM

How do you calculate the percentage of affirmative votes?

Depends on what the requirement is.

Typically a vote is based on 1 lot = 1 vote. However, if the development has multiple voting classes or some with lots allowed to cast more votes per lot than others you have to account for that. Depending on the wording in your governing documents, this may or may not be an issue.

x % of votes cast = number of yea votes divided by total number of votes cast multiplied by 100

x % of membership = number of yea votes divided by total number of lots multiplied by 100

X % of membership entitled to vote = number of yea votes divided by number of lots entitled to vote multiplied by 100

X % of votes entitled to be cast = number of yea votes divided by number of votes entitled multiplied by 100

Hope this helps,

Tim

If you care to share, is there a specific issue about how to count votes which prompted the question?

TimB4 (Tennessee)
Posts: 21,062

Posted:

Forgot to add that any fractional amount is always rounded up.

As an example - If x % equaled 48.1 the number of votes required would be 49.

PetunkaM (Florida)
Posts: 1,009

Posted:

Bylaws - 10 needed to hold the meeting 51% of the votes cast (6 needed to amend if only 10 showed)[Tim]

Tim,

you have 100 members and only 6 affirmative votes are required to amend the By-laws? Do I read you correctly? Wow!

TimB4 (Tennessee)
Posts: 21,062

Posted:

Yep. You read that correctly.

There is a requirement that a copy of the proposal be delivered to each member 15 days prior.
Until two years ago, it use to only require 25% of the votes cast.

Here is the exact language:

These Bylaws may be amended, at a regular or special meeting of the members, by approval of 51 percent (51%) of members present in person or by proxy, Provided That, the proposed amendment has been delivered to the membership, or published in the community newsletter, at least 15 days before the vote on the amendment.

Elsewhere in the Bylaws, a quorum is defined as:

The presence at the meeting of members entitled to cast or of proxies entitled to cast, one-tenth (1/10) of the votes of the membership shall constitute a quorum for any action except as otherwise provided in the Articles of Incorporation, the Declaration or these Bylaws. If, however, such quorum shall not be present or represented at any meeting, the members entitled to vote thereat shall have power to adjourn the meeting from time-to-time without notice other than announcement at the meeting, until a quorum as aforesaid shall be present or represented.

The funny thing is, per our CC&Rs to approve a special assessment or raise assessments more than 5% the quorum requirement is 60% of the votes entitled to be cast.

MarianneG (Indiana)
Posts: 170

Posted:

Our CCRs require a notice be sent to all homeowners that the proposed amendment will be voted on at the annual meeting or a specially-called meeting. A majority of total owners must approve the amendment, and our attorney advises us to get signature votes rather than a vote by raised hands.

PetunkaM (Florida)
Posts: 1,009

Posted:

Marianne, this is one time when I TRULY believe your attorney is 110% right.

PetunkaM (Florida)
Posts: 1,009

Posted:

Tim,

if this works for you fine. Theoretically speaking, in our situation I could be the only one -with five proxies in hand - to attend the meeting and pass any amendments to the By-laws. Ha.
I do thank you for the time you have taken to cite your By-laws. Needless to say I am somewhat surprised.

TimB4 (Tennessee)
Posts: 21,062

Posted:

P -

I didn't say I liked it. I'm just stating what our documents specify. I was surprised when I read it also. Fortunately we typically have a 40% participation of the membership when a meeting is called.

Linda,

As you can expect, my Association votes on all the amendments at a meeting with written ballots. Some Associations will amend the governing documents based on signatures without a definitive date for closing the polls. I don't agree with that method but since the Board establishes when the polls are open and closed it's probably seen as a legal method. As I posted earlier, a lot of this will depend on what your specific State laws (both HOA and corporate laws as most Associations are incorporated) require.

Tim

PetunkaM (Florida)
Posts: 1,009

Posted:

Linda,

Please know, what our covenants in Florida say may not be relevant to Arizona. Or, the covenants written for small developments may not be applicable to large developments. Townhouse developments differ from those of standalone homes. Recreational amenities and acreage play a huge role. It all depends what the developer had in mind and it really is -for the most part -very association specific.

LindaC25 (Kentucky)
Posts: 2

Posted:

Thank you for your comments. We’ve looked at about a dozen CCRs from other HOAs in Tucson. They all require either approval, or a signed instrument of approval, by X-percent of members or owners for amendments to the CCRs. None called it a vote. Our CCRs allow the suspension of voting rights for owners who are in arrears or out of compliance. We’re not sure if this also applies to approval of amendments to the CCRs. One of our members suggested that, since the CCRs are a contract, we can’t prevent any parties to the contract from participating in the approval process. We’d like to find out if anyone in the country has succeeded in amending the CCRs while disallowing votes or approvals by non-compliant owners.

TimB4 (Tennessee)
Posts: 21,062

Posted:

Linda,

If the language specifies x % of the membership vs. any mention about votes cast, then voting privileges would not enter into it.

If you did hold a vote on the amendment (which I think is the easiest method), everyone should be allowed to vote on it including anyone who had voting privileges suspended. I would recommend having a special meeting on those amendments vs. using the annual meeting. This way you won't have to allow some members to vote on the amendment but not on the election of directors.

Tim

LarryB13 (Arizona)
Posts: 4,099

Posted:

Linda,

The Arizona statutes are silent about amending CC&R's. You amend your CC&R's using the process described in your CC&R's.

The CC&R's for our POA require a 2/3 owner approval. We have had one proposed amendment floating around for about six years and we still cannot get enough owners to approve it.

Our CC&R's permit any owner to initiate an amendment without the approval of the BOD. If you seek a written approval you have all the time in the world to collect signatures. With a vote you have pretty much a one-shot chance. Arizona law does require that when voting on issues that the owner be allowed to vote for or against the measure. There is no such requirement if you seek written approvals; they "vote" for it by signing and against by declining to sign.

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