Enforceability of By-Laws

This is a portion of my association's bylaws.

Section 1. Composition. Members in this corporation must be property owners….

Section 2. Members in good standing shall have paid in full all dues and assessments within thirty days of notice…Homeowners shall be current in the payment of all sewer fees. Subsequent owners of lots owned by nonmembers shall become members in good standing by paying membership dues each and every year for three years beginning the first fiscal year following date of becoming a new title holder of a nonmember lot. A lot owner can also become a member in good standing by paying a nonmember sewer connection fee* plus all fees, assessments, and charges at the rate of a nonmember for one year plus the annual membership dues in effect at that time.

A member in good standing shall have use of all common areas of the corporation…..

Section 3. Member status of lots. A lot considered member status: A lot which qualifies for the sewer connection fee at the member rate. A lot owned by a titleholder who has paid membership dues each and every year…and has been in possession of said lot since 97/98. Membership status of a lot automatically vests in subsequent title holder the right to connect to the sewer at the member rate.* Subsequent title holder must continue paying membership dues to continue paying membership dues to continue the lot in member status.
A lot considered nonmember status: A lot qualifies for the sewer connection fee at the nonmember rate. A lot owned by a title holder who has not paid membership dues each and every year including and from 1997/1998. A subsequent title holder of said lot qualifies for a connection fee at the nonmember rate. However, subsequent title holder can begin paying membership dues on said lot beginning the first fiscal year following the date of becoming the new title holder and continue paying the fee each and every year for three years to cause the lot to become member status. During this three-year period, the lot does not qualify for benefits offered to members of the association, including the right for connection to the sewer at the member rate and the right to vote. An original nonmember owner or a subsequent owner may choose to pay the nonmember sewer connection fee plus all fees, assessments, and charges at the rate of a nonmember for one year plus the membership dues in effect at that time in order to gain member status for the lot.

Voting Rights….Membership in this corporation may automatically vest in subsequent title holders in said developments with the rights, privileges, and obligations contained in these bylaws if the title holder selling the property is a member in good standing. Properties considered nonmember status obtained through legal deed transactions or county tax sales must be held for a period of three years from the beginning of next fiscal year after date of deed transaction with the new owner paying membership dues each and every year for a period of three years in order to receive benefits of a member in good standing. Within the three-period, the property shall not be considered to have benefits of a member in good standing and shall pay assessments, fees, and charges at the rate of a nonmember.

*$15,000 for nonmembers; $5,000 for members ; annual dues are $75.

Sorry for the length but would appreciate any thoughts. Personally, I believe these are land use restrictions which have never been recorded and are not part of the covenants written by the developer. As I said before the covenants expired long ago.

Sherry

I'm not clear on what you're asking. If you're wondering whether your covenants are valid, you really should be consulting the Association attorney. You might also go to your assessor's office or wherever the governing documents would be recorded and see what's on file, if anything, for your association.

They have not been recorded at the county court house The only documents recorded were the deed restrictions which were the architectural restrictions on the homes that could be built in the development such as size, siding requirements, etc. There is also a mowing requirement. But like I said before these expired long ago. The Association does not enforce these but they do enforce the by-laws and the rules and regulations.

I'm sorry I haven't been very clear about this quandry. My question is whether these by-laws are enforceable since they have never been recorded at the County courthouse. They were not in our closing documents and our attorney never discussed these when he issued our title opinion. The only thing in our title opinion were the deed restrictions recorded by the develper back in 1972. These are architectural restrictions that are never enforced and were never preserved. I believe I stated in a previous post that in Iowa land-use restrictions have a 21 year time limit unless properly preserved. The HOA that took over from the developer no longer exists. A new nonprofit corporation took over management of the development. So the area has had 3 different entities in control; the developer, the HOA, and now the nonprofit corporation. The nonprofit organized in the mid 80's. They wrote articles of incorporation, by-laws, and rules and regulations but never recorded them. We purchased our property in 2007. We didn't know these documents even existed until 8 months after moving into our house.

Just looking for opinions not legal advice.

I understand that but in my opinion the by-laws contain land-use restrictions which by law must be recorded.

Your opinion doesn't make it true. By-laws are just "fillers" for the CC&R's. The CC&R's are the basic outline for the HOA and are the legal deed restrictions. The by-laws follow the CC&R's but have more details on how that is done. They are more changeable than any document in the HOA. As little as putting something in a meeting note to a board vote can change the by-laws. The other documents not so much. It takes membership to change and not just the representatives of them.

I've never heard of CCRs that expire. They're set in stone and last as long as the association does, or until the majority of the membership changes them. Just because they're outdated, they havent expired, and if they're recorded, they're still enforceable.

Your settlement attorney should've pulled the documents from Land Records. Everything we do for MD HOA's is recorded at the county court. Also, please understand there is a difference between the bylaws and the CCRs. These are two different documents, and I sense there may be some confusion.

SherryS,

Based on the Bylaws words you posted, I would not consider “a procedure” by which owners of lots owned by nonmembers shall become members in good standing as a land use restriction.

Nor would I consider a procedure for determining “membership” and “Voting Rights”, as a land use restriction, even if it is determined by paying a sewer connection fee which depends upon whether the Owner is currently a non-member or member.

But then I have never had to deal with land use restrictions, and sewer connections.

Hopefully someone with more experience will “weigh in”. And perhaps you could clarify what exactly you consider to be “a land restriction”.

In Vermont, as I understand, regardless of “what” is in the Bylaws they do not have to be recorded. That is, content does not determine whether or not Bylaws need to be filed in the land records.

Also, just curious, has anyone tried to “reinstate” the now expired covenants?

oops! Sorry haven't yet figured out how to reply to just a portion of the quote.

Will someone please post the instructions for that?

Thanks.

Sherry

I don't see how what you pasted, Sherry, comprises "land use restrictions" either.

CC&Rs really can expire--some have expiration dates. Their may be corporations or other codes in your state that speak to this issue.

You need to check your state's codes, perhaps corporations codes to see if your type of HOA must record bylaws. I, though, do not see how yours can be a corporation if your articles of corporation are not recorded. Our HOA, and most in CA are nonprofit mutual benefit corporations, but I don't know about your state.

By the way, the bylaws don't usually elaborate on the CC&Rs, but set out election procedures, meeting notice requirements, duties of directors and of officers, etc. Often they can only be amended by owner vote--in our HOA a simple majority of all eligible voters (lots or units) must vote to approve. I think that in CA civil code, it's specified that bylaws can only be amended by the membership (Owners)--the required % can vary a lot.

Rules & Regulations usually can be changed fairly easily, but again vary by state.

Not necessarily true. Some C&Rs state they will expire after a certain amount of time and some state laws actually force C&Rs to expire, like the Marketable Record Title Act in Florida that forces covenants to expire after 30 years. There is a procedure to reinstate expired covenants but for all legal purposes they are gone. This happened to two neighborhoods I have lived in (and currently living in). The C&Rs expired and there was a HOA attempting to collect from me. My lawyer informed them of the statute and the dates on all their filings and showed that the C&Rs ceased to exist. The HOA has since stopped enforcement (although they have continued to tell other homeowners that deed restrictions are still in place and must be followed).