Recording Official Bylaw Interpretations

Naturally, bylaws are subject to interpretation by the reader, and not everyone agrees on a given interpretation.
It's up to the BoD to determine the intent of any bylaws in question by making an official interpretation as needed. e.g. what constitutes "repair" or "maintenance" of a vehicle in a driveway.

How do those of you on boards approach this? Do you officially document an interpretation (i.e create a rule) for such bylaws and log it in the minutes? Granted, subsequent boards can interpret differently and change the rule.

I don't really see another alternative that keeps track of anything legitimately. The other option is to interpret on a case-by-case basis without logging the interpretation as a rule. e.g. "Bob wants to put the snow tires on his car in his driveway. Does anyone have an issue with that per the bylaws? No? ok, I'll tell Bob there's no problem" vs "The board has determined that installing snow tires in ones driveway is not a violation of Bylaw 3.2.1.1.5.3.2. Voted and approved on 02Oct2013, to be noted in the minutes of this meeting" One official, the other with no continuing record for the next board to review when Bob changes his tires 2 years from now.

Likewise with interpretations given by an attorney. Early in the days of our newly-established HOA, we sought periodic legal counsel for help in understanding some of our bylaws and what they legally meant we could or couldn't do. The board president sought counsel, took notes, and there was discussion at our board meeting. But no official record other than the chicken-scratch notes he took and handed out. Nothing in the minutes, nothing officially documented. As I see it, anything that was discussed at those meetings is moot, and the board may well interpret something differently today. If the former board members recall the prior interpretations, they may disagree with the current board's interpretation. But if nothing is officially logged, too bad.

So how do all of you approach that?

No, I'm referring to bylaws in my case. Call them "documents" as a generic if you wish.
Not every association requires a hearing period before the implementation of new rules, and regardless an official interpretation of the "documents" isn't necessarily a "rule" though it is rule-like in that it establishes for the board a point of official reference that can be drawn upon later in order to ensure consistency in enforcement.

and this has nothing to do with driveways. It's a general question that pertains to any or all sections of "HOA documents"

and based on their inability to comprehend as in do not know the differences between may and must or tricky things the difference between avoidance and evasion.

Dave,

Your topic is bylaws but the example you gave has nothing to do with bylaws.

Bylaws are binding only on the incorporated association. They are the rules for such things as who may serve on the board, terms of office, when elections are held, and so forth. Whether Bob may put snow tires on his car while parked in his driveway would not be a lawful issue for bylaws.

Perhaps you are referring to the CC&R's, where it would be appropriate to address the issue of working on a car in the driveway. The board can, at any time, decide that because installing snow tires is a matter of safety and the need to install the tires is not always foreseeable that the board will take no action against an owner who does so. Making a formal resolution would be preferrable to making no statement at all or deciding on a case-by-case basis. The danger of the latter is that Bob may change is tires while Charlie gets nailed with a fine for doing the same thing.

Unless your CC&R's mandate otherwise, your board may choose which battles it wishes to fight and has no obligation to fight any at all.

I am very much talking about Bylaws.
Our documents consist of:
1) Disclosure Statement: general description of the development, operation overview, brief summary of rights, etc...
2) Master Deed: Definitions, description of common elements, easements, etc...
3) Bylaws: Assessments, repair & reconstruction, RESTRICTIONS, voting, meetings, etc...
We have nothing called Covenants or Conditions, and the only heading for Restrictions is in the Bylaws.

The issue is not when "common sense" things come up, it's when interpretable things come up and when opinions differ. When even members of the board read the documents and have a differing opinion on what they mean and how to interpret them. Things that are best resolved by drawing upon the knowledge of a professional such as an attorney. But not when things necessitate informing the general membership. I'll refrain from any examples since people seem to simply auger-in on specifics and not see generalities.

Think of it as "we weren't clear what we could/should/can't do relative to this bylaw, so we asked the attorney when we had his ear on another topic". So an opinion exists, the board discussed, understands, and agrees, and wishes to document such so that future boards can save going to the attorney for the same thing.
Maybe it's a rule/regulation kind of thing, maybe it's an administrative/procedural kind of thing.

btw, our bylaws permit the BoD to create regulations (consistent with the docs of course) that become effective 30 days after notice is given to the membership. 50% owner vote required to overrule (or of course 50% of a subsequent BoD)

Although this may be the safest, it is expensive. We last asked our attorney for advice in 2011. We asked two questions. Cost $527.50

The questions were simple (at least to us) and we had done 90% of the research for them, but we wanted some clarification. As a Board member, I try to limit contacting an attorney as much as possible because of that cost. Otherwise, members could be paying higher assessments simply because a Board can't make a decision without running it by their attorney.

Oh the questions:

1) Asked if the Board could make labeling changes to the Articles of Incorporation (section numbers, etc.) without membership vote or if that would be considered an amendment.

2) Sought clarification on methods of charging fees on delinquent accounts (CC&Rs could be interpreted two different ways).

Exactly the question, Ann. I'm interested in how other HOAs "duly note" such things in their records so the same question isn't asked again by a subsequent board. From the responses, I gather that this is a novel idea.

It would also address how a new board would fix a situation and "duly note" a proper interpretation after succeeding a board that willfully used a creative interpretation based on their own personal bias. No doubt we see plenty of THAT in posts here.

Dave,

As I posted earlier, the way to do what you are asking is for the Board to adopt a resolution and then publish that resolution to the membership.

I have attached a file of a resolution that we passed several years ago. The intent was to reduce to laymen's terms the definition of unit boundaries. This "clarification" has made it easier to make Board decisions on common element maintenance. The resolution does note that the boundary language in the Declaration remains the legal definition if a conflict arises as a result of our decisions.

Jim

I don't really see recording intentions as being of much use. Instead maybe draft clear specific rules that leave little to subjectivity.

For instance, one of my HOAs amended the C&Rs to state that the board could interpret the rulea as they saw fit from time to time with nothing more then board approval. It was my opinion they drafted this in an attempt to circumvent the C&Rs and this surely wouldn't have held up in court. I think making an official intentions document explaining the other governing documents may face a similar fate. Some may challenge it as being yet another subjective rule created by the whims of the board. I would say stick to clear objective rules and policies.

Thanks Jeff. So meeting minutes are one suggestion, and regulations given to the membership are another.

Dave

You just cannot call it the book. You have to know the differences and how each document can be modified.

The main document is Covenants (Deed Restrictions) which are typically recorded with the deed. Included in them will usually be the procedure to change them. Typically it will take 2/3rd of all owners agreeing to the change.

Bylaws basically say how things will be done like BOD Elections, voting, etc. They may or not be recorded with the deed. Typically it will require a majority of the owners agreeing to make any changes in them. Quite often less required to make Bylaw changes then the amount needed to make Covenant changes.

Rules & Regulations. Typically they can be made by the BOD alone. Many BOD's get in trouble by trying to alter/overturn Covenants and/or Bylaws with Rules & Regulations. R&R's cannot do this.

While not accusing you, I think you might be falling under the mistaken interpretation that we can change what we want with R&R's or "BOD Clarifications".

I hope I am wrong.

Dave

I went online and found three HOAs in Michigan and reviewed their "governing documents". All three had 1) Master Deed 2) Articles of Incorporation 3) Bylaws and 4) Rules and Regulations. With the except of the Master Deed, which in other parts of the country, would be called the CCRs, all the other documents are the same.

In the one examples you gave, I would put that into an architectural binder. It's possible that many of areas that need interpreting are of the ARC variety and it might make sense to have the ARC committee thoroughly review your documents and identify all the areas of the complex and the documents to make sure EVERYONE is on the same page.

While your Bylaws may be slightly different, the Bylaws outline how the association, as a corporation, governs itself, i.e. meetings, board and members, elections, contracts, power of the board. Biggest problem I have seen and others here have addressed that, is may and shall, should you or shouldn't you.

One of the most difficult areas in managing properties is interpreting documents and determining who is responsible for what. Another area is does that association have clear and understandable ARC guidelines that have been well thought out.

For completeness, I'll add that our "Restrictions" are merely an article of our Bylaws (therein containing over 40 sub-sections).

Thus, the entire package comprises, "the documents" or simply "the book" as the entirety of the governing documents that is necessary to understand how the association is to be managed.

Yes it is Carol. It's exactly as I said before. Master Deed, Bylaws, Articles of Incorporation

I'm not sure I understand the particular interest being shown in the titles of our documents though.

My sentiments exactly, John46.

Dave

Different states call their real estate documents different names and escrow is handled differently in different states.

For instance, most states call their restrictive document the CCRs, while as I noticed Michigan calls them Master Deeds. Some states uses a Deed of Trust for security on the property, while others call it a Mortgage Deed or Security Deed. Some states use an attorney to close escrow, while others use a title company or escrow company. In Northern California, escrow is handled by a title company, while Southern California uses either a title company or escrow company. Some states only record the Articles of Incorporation and CCRs and some states may record everything. In Michigan, it appears all three are recorded.

But, in the examples you listed, my take away is that you are looking for interpretation for the Architectural improvements and that should be in its own book by itself. Every association has either many rules for the architectural committee to consider while others are pretty simple. My association, while pretty large, is very simple and very little rules.

Architectural Guidelines much like Rules and Regulations, need a good thought process in interpreting what the developer intended as to avoid confusion in the future.