Is an Addendum to the CC&Rs different from an Amendment?

My Board just passed an Addendum to our CC&Rs without having the members vote on it. They said they are allowed to do an Addendum because it is different from an Amendment. What's the difference? Has anyone heard of that? This is what our CC&Rs say:

16 .6 Change of Circumstances . Except as otherwise expressly provided in this
Declaration, no change of conditions or circumstances shall operate to extinguish,
terminate or modify any of the provisions of this Declaration.

13 .2 Amendments . This Declaration may be amended by the Owners of Lots and Parcels
within the Property representing not less than seventy-five percent (75%) of the total
votes allocable to the Membership (meaning the total number of votes of both
Classes of Membership, not each Class separately), provided that any such
amendment made so long as Declarant owns a single Lot or Parcel shall require the
consent of Declarant, or shall be void.

Thanks! JoanT1

The Board can pass anything they want to and call it whatever they wish. However, the Board usually has no power to add, amend, or delete the CC&R's, which are essentially restrictions on the real estate.

If the Board has recorded this "addendum," then you and the other property owners have a real problem. Even though the addendum does not conform to part 13.2, it will forever cause confusion for new owners, real estate lawyers, and title companies.

Sounds like another case of a Board dong whatever they want to with the only option being legal action against them, in my opinion. Must be good to be the King. Maybe someone else has a solution?

Paul T

The interesting thing is that the HOA Attorney drew up the addendum for them and they have authorized her (without a meeting) to record it. This is part of the agenda for next Tuesday. A little late to discuss it since the Attorney met with the Master Association yesterday. Arizona has an Office of Administrative Hearing that Members can file a complaint for $500. If the Member loses that's all it will cost them. If the Member wins the Association pays the $500. I plan to file as soon as the Addendum is recorded. I cannot find anything that authorizes them to do an addendum and it is definitely a change to the CC&Rs.

Confirm Action in Lieu - RESOLVED: The Board of Directors hereby approves the attached procedural addendum (the “Addendum”) to the Amended and Restated Declaration of Covenants, Conditions and Restrictions for Civano 1: Neighborhood 1, and authorizes the Association’s President to sign the Addendum. This action is being taken for the purposes stated in the “Recitals” of the Addendum and in accordance with Paragraph 3.19 of the Second Amendment to the Amended and Restated Declaration of Covenants, Conditions, Restrictions and Easements for Civano: The Tucson Solar Village. : New Business
Further, the Board directs the Association’s attorney, Carolyn Goldschmidt, to finalize execution of the Addendum with the attorney for Civano Community Association and to have the Addendum recorded at the Pima County Recorder’s office.

The Members have not been provided a copy of the Addendum. I requested it and no response. Here is the reference from the Second Amendment to the Master Association CC&Rs.

3.19 Residential Subsidiary Associations. Any Subsidiary Association
governing a residential Parcel may elect, by notice to the Association and
recording of an addendum to its Subsidiary Declaration, to make effective
any or all of the following provisions (provided that if any become
effective then 3.19.4 and 3.19.5 shall automatically become effective):

Joan

What specifically do you have issues with?

Others

What issues do you see?

Joan:

The Office of Administrative Hearing cannot hear a complaint. In Gelb v. Department of Fire, Building and Life Safety, (App. 2010), the court held that the administrative agencies lacked the constitutional authority to adjudicate disputes. Your only option is going to court.

There is a reference in your third post to paragraph 3.19 of the Second Amendment. The language you quoted in the first post was from paragraph 13.2. What is stated in 3.19? Depending on the language there, this may be legitimate.

If you notice in my first post I said "our" CC&Rs in reference to 13.2. Meaning the Subsidiary Association.

This is from the Master Association CC&Rs. This is what is in the Board's Action in Lieu.

3.19 Residential Subsidiary Associations. Any Subsidiary Association
governing a residential Parcel may elect, by notice to the Association and
recording of an addendum to its Subsidiary Declaration, to make effective
any or all of the following provisions (provided that if any become
effective then 3.19.4 and 3.19.5 shall automatically become effective):

Check this Statute.
41-2198. Administrative adjudication of complaints
Pursuant to chapter 6, article 10 of this title, an administrative law judge shall adjudicate complaints regarding and ensure compliance with:
1. The Arizona mobile home parks residential landlord and tenant act.
2. Title 33, chapter 9 and condominium documents.
3. Title 33, chapter 16 and planned community documents.

When the Board switched our elections over to the Non-Profit Corporation Act it essentially kept the Members from going to the Office of Administration Hearing. They do not hear compliants that are from Title 10 which is the Non-Profit Corporation Act. Clever isn't it. My complaint would be in reference to the violation of the Planned Community documents.

LarryB13 is incorrect with regard to being unable to file complaints with the Arizona Office of Administrative Hearings. As a result of legislative changes in the last year or two, the AOAH is alive and well.

Decisions relating to HOA’s can be found at this site:
http://www.azoah.com/search.html
Enter “Decision Search.”
Under “Agency”, select “Department of Fire Building and Live Safety – H/C” then “Search.”

You will see that the most recent decision was dated 9/18/12.
With a little more work on the site, you can also download audio recordings of the hearings.

Good information to have. I knew he was incorrect because I know a lot of the people who were lobbying for it and also several who have submitted complaints already.

Didn't know about downloading the audio. I will definitely check that out before I submit.

I agree with the others who say you may have a rouge board. The claim that they are a non-profit rather than a planned community sounds bogus. They probably need to comply with both sets of statutes. I’m guessing that the planned community statutes take precedence.

This is from Section 10-3701 of the non-profit statutes:

F. Notwithstanding this chapter, a condominium association shall comply with title 33, chapter 9 and a planned community association shall comply with title 33, chapter 16 to the extent that this chapter is inconsistent with title 33, chapters 9 and 16.

Be sure to request any association records (per ARS 33-1805) you may need for your case BEFORE submitting a complaint with AOAH. Otherwise, the HOA may be able to withhold the records due to pending litigation, and you may need to subpoena the records.

It’s my understanding that it costs $550 to file one complaint with the AOAH, and it costs about $1000 for any more than one. If your HOA is as rogue as it seems, it may be worth it to risk $1000 and throw the book at them.

Larry – Here’s a link to the web-site of a local anti-HOA person. The link contains a discussion of SB-1148. Within that discussion is another link to the actual SB-1148 which shows the changes made to the original law.

http://pvtgov.wordpress.com/2011/01/19/az-bill-sb-1148-seeks-to-restore-oah-adjudication-of-hoa-disputes/

Joan,

Since your Association is subsidiary to the Master Association the lots are governed by both Declarations (yours and the master association). With the language you provided from the master Association, it appears that your Board did have the authority to append your declaration to include the specific provisions (and only those provisions) outlined in the master association declaration.

I don't agree with such authority but that is how I interpret what you provided (I am not an attorney and I do not work int he legal profession).

I would suggest the following:

1) Seek a legal opinion from 2 or more attorneys to see if they believe that section provides the Board authorization to append or not. This will give you an indication if challenging the issue in court is worth it.

2) Seek signatures on a petition to call a special meeting to recall the Board and elect new directors. If the Board has the authority to append, a new Board would also have the authority to remove it.

3) Seek signature on a petition to call a special meeting to amend your Declaration to say:

The proposal adopted by the Board of Directors on mm/dd/yyyy, appended to the Declataion and recorded on mm/dd/yyyy is hereby repealed. No Board may append this Declaration without prior approval of the Owners of Lots and Parcels within the Property representing not less than seventy-five percent (75%) of the total votes allocatable to the Membership (meaning the total number of votes of both Classes of Membership, not each Class separately).

This language wouldn't conflict with the master Associations authority given the Board to append. It just requires your Board to receive membership approval prior to exercising such authority. Hence, you would have successfully reversed the Boards decision and prevented a future board from making a similar decision.

Hope this helps,

Tim

An aside when you say skating on dues.

In one association we discussed when dues commenced. The most common practice, and the one we used, was when the new home was closed on by the owner. We asked our lawyer about starting dues when the lot was platted (lot designated and approved to be built on) regardless of when finally built on. Our lawyer said a case could be made for that but that it would be a long costly legal battle with the developer and had doubts we could win it.

We dropped the idea as not worth it. Sometimes things are not worth it.

I lived in Tucson a few years ago and passed by Civano from time to time. It is one of the few HOA's where one can find purple homes. It's a nice break from all the drab associations one finds in Phoenix.

To Larry B13: Yes we do have purple houses. We also have lavender. Not sure about the lavender color yet. I worked for the developer and have been here 12 years. I know the governing documents and the statutes very well.