Amending the Declaration (Virginia HOA)

Started by DonnaR5 • 9 replies • 2592 views

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DonnaR5
Posts: 162

Posted:

Our current Declaration (from 1973) requires an instrument signed by 75% of the owners to amend the Declaration. If we were to update this, what is the requirement considered more reasonable... well, doable... today?

Please pardon if this has been answered recently already. I looked through a number of Declaration amending topics, and didn't see it.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Donna

Those familiar with VA will answer about VA.

Many believe that Covenant (Declaration) changes should require a very high amount of owners agreeing to change them. Typical is 2/3rds in favor of. Not just 2/3rds voting but 2/3rds voting yes. Some advocate 100% as they consider Covenants to be the "cornerstone" of their association. If your requirement is 75% then that is line with many.

Bylaw changes are another thing and I hope you are differentiating. Rarely do Bylaw changes require more then 50% voting and only 50% of them (25% overall) having to agree. In many associations it is as low as 20% for Bylaw changes thus as few as 10% can make a Bylaw change.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Covenants should be the most difficult document to amend, as it is effectively the contract that all of your other governing documents are based on.

VA law, specifically VA § 55-515.1, states that a declaration may be amended by 2/3 vote of the members (meaning the whole membership, not just those eligible to vote). Since your Association was formed prior to July 1, 1999, it appears that your association isn't covered by the 2/3rd rule (unless it is silent).

My recommendation is that, if you are still intent on changing the amount needed, that you change it to 2/3 of the membership.

My other recommendation is that, prior to releasing a proposed amendment to the CC&Rs to the membership for a vote that you seek a legal opinion on the proposal. The CC&Rs is simply too important of a document to not cover all the bases when you are considering amending it.

KerryL1 (California)
Posts: 14,550

Posted:

Tim's advice looks very sound, Donna.

DonnaR5
Posts: 162

Posted:

Thanks, everyone. Your response was straight to the point, very helpful.

Yes, I'm clear on the difference re bylaws and declaration. Our bylaws have a quite doable requirement for amending them--no problem there.

I was hoping that 2/3 for amending the declaration was something we could adopt, so that is good, too.

We will be asking our attorney to draft these proposals: the 2/3 approval instead of 75% (and I will find out if it's even necessary--perhaps Va. law supersedes the requirement of our declaration).

Our main concern is to alter our ability to raise dues more than CPI, but I think we will include the item for amending the declaration if the attorney tells us it is needed.

Thanks again!

DonnaR5
Posts: 162

Posted:

Sorry, I do see that the law is not written to apply to us, because our declaration is *not* silent.

DonnaR5
Posts: 162

Posted:

One last question:

Our Declaration provides for increasing assessments over the allowed maximum in this way:

The maximum annual assessment may be increased above that established by the Consumer Price Index formula by a vote of the members for the next succeeding five years and at the end of each such period of three years, for each succeeding period of three years, provided that any such change shall have the assent of two-thirds (2/3) of the votes of each class of members who are voting in person or by proxy, at a meeting duly called for this purpose, written notice of which shall be sent to all members...etc etc.

I actually sent this text in to the group last summer because I found it extremely confusing. For instance, what happens after the 5 year temporary increase lapses? You go back to the amount of 5 years ago, presumably, increasing by CPI.

Anyway, this temporary increase is the only way specified in our Declaration to increase over the maximum that the board can set. Can this be improved?

NpS (Pennsylvania)
Posts: 4,216

Posted:

As I read it, first time vote is good for 5 years. After that, must be voted again every 3 years.

Sikubali jukumu. Read all posts at your own risk.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By DonnaR5 on 02/13/2015 7:01 AM
One last question:

Our Declaration provides for increasing assessments over the allowed maximum in this way:

The maximum annual assessment may be increased above that established by the Consumer Price Index formula by a vote of the members for the next succeeding five years and at the end of each such period of three years, for each succeeding period of three years, provided that any such change shall have the assent of two-thirds (2/3) of the votes of each class of members who are voting in person or by proxy, at a meeting duly called for this purpose, written notice of which shall be sent to all members...etc etc.

I actually sent this text in to the group last summer because I found it extremely confusing. For instance, what happens after the 5 year temporary increase lapses? You go back to the amount of 5 years ago, presumably, increasing by CPI.

Anyway, this temporary increase is the only way specified in our Declaration to increase over the maximum that the board can set. Can this be improved?

Keeping in mind that the Consumer price index (CPI) is a percentage, I'm interpreting what you cited this way:

The Board may increase the assessments every year up to the CPI.
If they desire to make increases above the CPI, then they need 2/3 approval of the membership.

Once approval is received, the approval is good for three years (as the five year period was from 1973-1978) and during those three years the Board is not tied to the CPI limit. Once the three years end, then the Board is only limited to increase assessments by the CPI.

The assessment amount only decreases if the Board says to decrease it.

Example:

2000 - Assessment is set at $100
2001 - Board may raise assessment up to max CPI
2002 - Board obtains permission from membership and may raise assessments by any amount
2003 - previous permission still applies and Board may raise assessments by any amount
2004 - previous permission still applies and Board may raise assessments by any amount
2005 - Board may raise assessment up to max CPI

DonnaR5
Posts: 162

Posted:

Ah--that does make more sense. Thanks.

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