Interpretation of HOA law in Ohio

By-laws are not typically filed documents. Convenants and Restrictions are. (CC&R's). They are filed in your local county records department and are considered public. Your Incorporation documents are filed at the STATE level and are also public documents. By-laws are often mixed with the CC&R's and confused.

By-laws are more of the fill in the blanks of the CC&R's and can sometimes be changed simply by including that change in the meeting notes/established published rules voted on by the board. They are more fluid to change than CC&R's. CC&R's are what the owner's feet are tied to. They can required more percentage of votes of the owner's to change. Ours was 90% while the by laws and incorporation was 75%.

These documents may require a "Special meeting" for the required vote to be made. Which as you can see truly is impossible. The solution is that 2 documents can be signed. 1 for the vote. The 2nd for giving up the right to cast your vote at the special meeting. I would recommend having a lawyer draft these documents for your HOA. It worked for us to get our votes.

You may consider creating a committee to update/modify the documents to change things all at one time. Change the new documents to require 51% instead of the 75%. Remove the references to the developer if they are still in there. Change the two voting system if it's still in there. Just make changes for technology and other items the HOA may feel more comfortablee with following.

You need a lawyer and one experienced in contractual law NOT Real Estate. It's best to work a few things out amongst yourselves in a committee before depending on a lawyer to do it for you. It's your oportunity to make the rules for you NOT what the developer wanted which was profit...There are other older posts I'd recommend you read on here regarding your issue. It is discussed pretty often here.

Hi Craig:

Welcome to HOATalk.

Per the language:

Unless otherwise specified in the declaration or bylaws, the owners may amend the declaration and bylaws by the consent of seventy-five per cent of the owners, either in writing or in a meeting called for that purpose. No amendment to the declaration or bylaws is effective until filed in the office of the county recorder.

Also, because you stated that nothing is stated regarding amendments in your governing documents then the State Statute would supersede. It would be 75% of all homeowners to amend. It is made difficult to accomplish for a reason because the declaration is attached to everyone’s property and can affect the marketability of their property.

It can be done but might take individuals willing to put forth the effort and some leg work knocking on doors getting ballots filled out following proper voting procedures in your documents and/or state statutes.

In Ohio that definition would be: http://codes.ohio.gov/orc/5312

Chapter 5312: OHIO PLANNED COMMUNITY LAW
5312.01 Definitions.

(K) “Owner” means a person who owns a lot in a planned community. “Owner” does not include any person that has an interest in a lot solely as security for an obligation.

Hmmm … You can try but I do not believe that will be legal. You must have at least 75% of all owners stating yes to any change period end. If you do not have that percentage then you can be sued … my money would be on the owners who sued.

Instead I would focus on the method you have for voting. What do your documents state regarding members casting votes?

One thought is to send out a newsletter regarding what possibly needs changed so everyone can review ahead of time and be aware of any issues and recommended changes. Then depending on voting per your governing documents … can individuals knock on a door and have the ballot immediately completed or can they get a proxy to cast the ballot for the individual, etc.? We need the info for both proxies and ballots from your governing documents to maybe come up with some ideas.

Most wording I am familiar with says that X% must vote, not that X% must vote in favor of.

Let us say that 200 are eligible to vote thus the required 75% is 150 or more voting. If 51% vote yes (could be as few as 76 voting yes out of the 150) then yes is the answer.

Thus 76 out of the 200 (or 36%) controlled it as they, the actual voters not those eligible (registered to vote) voted.

Of course, I could be wrong.

I think the eligibility part is what we have to work with.... since we've went so long with people wanting things that they can't have, no one wants to do anything with the HOA. So I think what we may end up doing is giving folks a lot of notice... like 90 days or so, spell out the proposed amendments, and give them a paper ballot or allow them to vote at a meeting or 2. But with the inclusion of language that says, to be eligible to vote for this item, your vote must be received or done at the meeting as of a certain date. Mail it out 2-3 times, email it, whatever it takes.

I'm all for protecting people's right to vote however they see fit. But our HOA is going down the tubes fast, with no participation in anything. And if you are given 90 days to review something and won't spend 5 minutes to vote via mail or email, even with multiple notifications, then in my opinion, you lose your right to complain.

Craig,

CC&R's and bylaws normally have different requirements for amending.

As most others have stated above, you will need 75% of all owners to agree to an amendment. I don't know any more about Ohio law than what you have posted, but that may not mean you have to hold an election. If someone circulates a proposed amendment and obtains approvals from 75% of the owners then you can record the results. If there are no time limits in either the law or the CC&R's themselves, a person who starts today may plug away at it for years. Any owner can circulate a proposed amendment with or without the blessings of the BOD.

Bylaws are a different matter entirely. Depending on Ohio law, the CC&R's, and the articles of incorporation for your association, your BOD might be able to amend the bylaws without a member vote. Even if you are required to obtain membership approval for bylaw amendments, a simple majority of a quorum should suffice.

Hi Craig:

I am concerned due to your state statute that your board does not try to ramrod a change without proper approval. Keep in mind that the board more than likely has a fiduciary duty to insure that proper procedures and the appropriate laws are followed. In some instances if you check your D&O Insurance they will not cover a fiduciary violation which can make a board member personally responsible for their actions.

I am not an attorney; however, based on your state statute if I was a member of your HOA and you did not follow the state statute then I could sue not only the HOA but possibly the board members directly for their total disregard of the law and violation of their fiduciary duty. The last thing I would want to happen is for an HOA or any board member (I have to assume from your comments you are a board member) to end up in a total mess.

Lets try to find a method for the association to achieve their goals and avoid potential legal litigation.

In one HOA I was a member of, we changed the 75% to 66% of course we did have to get 75% to vote for it. It took about 6 months of active work to gather enough proxies and have enough show up at the meeting to achieve such, but it was done.

Most felt that 66% was still sufficient to safeguard against any "funny business".

“The owners may amend the declaration and bylaws by the consent of seventy-five per cent of the owners, either in writing or in a meeting called for that purpose.”

This passage implies that an election is not required and that a written instrument is a valid alternative to a meeting where a vote is taken.

Hi Craig:

The state statute starts out with:

Unless otherwise specified in the declaration or bylaws …

If your Bylaws state 67% then potentially that would be the percentage you would use instead of the 75%.

If an owner chooses not to vote, then their potential vote would be counted as a NO.

For CCR amendments you cannot exclude anyone. If bank owned you can attempt to get their participation because they are the real individual owner; otherwise, hopefully there are only a handful and will be counted in the NO percentage of votes.

My apologies, I didn't explain it clearly and it went thru multiple posts.

Our bylaws state that they (the bylaws) can be modified with 67% of the vote.

Our declarations are a separate document. The only amendment language in that document was for the original real estate developer, which is no longer involved. They had language to allow them to change or modify anything with no approvals or votes, but there is no language at all regarding the HOA making changes to the declarations, that's where the state law comes in.

Our real challenge is apathy/frustration. Every single person I've talked with says they want sheds. All of our garages are rather small. But when it comes to voting, no one says no, or not change, they just don't respond. Even when folks walked door to door and handed out ballots, we even allowed folks to email their vote and we got around 10% response. There were a couple no votes of what was returned, but I think most have lost hope that anything is capable of being changed in the HOA.

Craig

The tough love question is are you the one wanting changes?

When only 10% responded you say they are apathetic/accepting, but some might say they do not agree with what you are trying to do. Even when you "think" it is for their own good.

It is easier to amend my state constitution than to amend my CC&R's. To amend the state constitution, we need only a majority of the voters who turn out for the election, regardless of what percent is eligible to vote. To amend the CC&R's we need 2/3 of all eligible voters, meaning that a non-vote is a "no" vote.

Somehow, this just seems wrong.