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Positive voting to amend cc&r's

Started by GeorgeD6 • 40 replies • 2012 views

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GeorgeD6 (Texas)
Posts: 11
Posted:
Our BOD has decided to re-establish positive voting which allows ballots to be sent out and if not returned they are "Yes" votes.
After reading over the following portion of covenants it doesn't look like this is legal for 2 reasons.

1st off it says "signed by 75% of members"

2nd it says if in successive 10th year amending can occur last year, so 7 years from now. We are in year 32.

Duration and Amendment

9.03 The restrictive covenants and conditions of this instrument shall run with and bind the land, and shall inure to the benefit of, and be enforceable by, the Developer or the Owner of any Lot subject hereto and their respective legal representatives, heirs, successors, and assigns, and, unless amended as provided herein, shall be effective for a term of thirty (30) years from the date this instrument is recorded, after which time said restrictive covenants and conditions shall be automatically extended for successive periods of ten (10) years.
This document may be amended during the first thirty (30) year period by an instrument signed by not less than 80 percent of the Owners, during any succeeding ten (10) year period, said document may be amended during the last year of any such ten (10) year period by an instrument signed by not less than 75 percent of the Owners. No amendment shall be effective until recorded in the Official Public Records of Real Property of Bexar County, Texas, nor until the approval of any governmental regulatory body which is required shall have been obtained.
TimB4 (Tennessee)
Posts: 21,059
Posted:
I agree that it is likely not legal.

A non vote is simply that, a non vote.

This is upheld by Roberts Rules of Order as well.

If challenged and they do not have the signed instrument (the ballot), then they would most likely lose the challenge.
RichardP13 (California)
Posts: 3,868
Posted:
Quote:
Posted By GeorgeD6 on 06/15/2016 2:26 PM
Our BOD has decided to re-establish positive voting which allows ballots to be sent out and if not returned they are "Yes" votes.
After reading over the following portion of covenants it doesn't look like this is legal for 2 reasons.

1st off it says "signed by 75% of members"

2nd it says if in successive 10th year amending can occur last year, so 7 years from now. We are in year 32.

Duration and Amendment

9.03 The restrictive covenants and conditions of this instrument shall run with and bind the land, and shall inure to the benefit of, and be enforceable by, the Developer or the Owner of any Lot subject hereto and their respective legal representatives, heirs, successors, and assigns, and, unless amended as provided herein, shall be effective for a term of thirty (30) years from the date this instrument is recorded, after which time said restrictive covenants and conditions shall be automatically extended for successive periods of ten (10) years.
This document may be amended during the first thirty (30) year period by an instrument signed by not less than 80 percent of the Owners, during any succeeding ten (10) year period, said document may be amended during the last year of any such ten (10) year period by an instrument signed by not less than 75 percent of the Owners. No amendment shall be effective until recorded in the Official Public Records of Real Property of Bexar County, Texas, nor until the approval of any governmental regulatory body which is required shall have been obtained.

Question: How are they signed, IF the ballot is not returned?
PitA
Posts: 1,416
Posted:
ditto
PitA
Posts: 1,416
Posted:
and ditto
TimB4 (Tennessee)
Posts: 21,059
Posted:
You should encourage the Board to seek a legal opinion.
KerryL1 (California)
Posts: 14,550
Posted:
Looks to me, too, that you need Owners' signatures in your HOA. I'm curious to know the reasons that your Board doesn't think it should comply with your CC&Rs.

What do TX state laws say, if anything about this topic?
BobD4 (up north)
Posts: 1,002
Posted:
Quote:
Posted By RichardP13 : Question: How are they signed, IF the ballot is not returned?

Right on the button. How would a % consent document next get registered onto title either.

If this is also what is criticized as 'negative option' consumer abuse, maybe it could be defended for opportunity to file objections if legislated eg a minor rule proposal / opportunity to comment or 'requisition'.
GeorgeD6 (Texas)
Posts: 11
Posted:
I tried to tell them before ballot mailout, which cost about $400. It is so plain and simple they are breaking their own rules.
We have a new BOD, these 2 guys are nothing but trouble, years ago he was taking off board, now he is back.

When they try to amend cc&r will county courthouse read current one to see if what they are doing is legal?
GeorgeD6 (Texas)
Posts: 11
Posted:
I left out the main thing by accident.

The positive voting is going to be used for amending covenants. So they claim positive voting was voted in at anual meeting, no need for 75% members I guess.

If you read 9.03 they can't amend anything for about 7 more years.
RichardP13 (California)
Posts: 3,868
Posted:
Quote:
Posted By GeorgeD6 on 06/16/2016 10:41 AM
I left out the main thing by accident.

The positive voting is going to be used for amending covenants. So they claim positive voting was voted in at anual meeting, no need for 75% members I guess.

If you read 9.03 they can't amend anything for about 7 more years.

Can't do that at an annual meeting. How you vote and how you amend are part of the governing documents, which have to be followed.

Sounds like they play be different rules.
LarryB13 (Arizona)
Posts: 4,099
Posted:
George,

In the real world of public elections I have seen many valid challenges to candidates, issues, and/or procedures dismissed simply because the challenger waited too long to raise an objection.

May I suggest that you preserve your rights by making a written objection by certified mail ASAP? Make your objections known to the board.

JamesG11 (Florida)
Posts: 118
Posted:
Lots o' issues here. Although it is often helpful to secure the views of others on this forum re: a legal issue like you have presented, they are no substitute for a legal opinion from an experienced HOA attorney in your state. The latter can reasonably be relied upon; the former cannot.

Having issued the above caveat, I'll nonetheless share my two cents, FWIW: what you've described the Board is doing -- if accurate in all respects -- is unlawful in all likelihood.

However, what do the Texas statutes have to say on the subject? Perhaps even more importantly, does Texas have a MRTA statute like we do here in Florida where CC&Rs go "poof" after 30 years unless preserved?

My suggestion: find some other concerned homeowners, pool together some cash, and go spend an hour with an experienced HOA attorney in your area. The cost to each homeowner should be relatively nominal, and the advice (get it in writing) essential.

Good luck!
NpS (Pennsylvania)
Posts: 4,216
Posted:
Quote:
Posted By GeorgeD6 on 06/15/2016 2:26 PM
and shall inure to the benefit of, and be enforceable by, . . . the Owner of any Lot

If they didn't record the amendment with the correct number of signatures, then the document is defective. Write letter demanding that they fully comply with rules to amend.

If they don't, sue. Your rule gives you the power to enforce this measure specifically.

Can probably do it without a lawyer, but depends how comfortable you are doing that.

Their problem is that they must use a lawyer to respond to your lawsuit, and I can't think of any lawyer who would advise them to proceed with this positive voting nonsense - especially given the explicit requirement for signatures.

Slam dunk For you IMO.

Sikubali jukumu. Read all posts at your own risk.
PitA
Posts: 1,416
Posted:
ditto
DouglasK1 (Florida)
Posts: 2,046
Posted:
Quote:
Posted By GeorgeD6 on 06/16/2016 10:37 AM

When they try to amend cc&r will county courthouse read current one to see if what they are doing is legal?

No, they will just record any documents that are filed correctly, they won't attempt to verify that the vote was proper.
Escaped former treasurer and director of a self managed association.
TimB4 (Tennessee)
Posts: 21,059
Posted:
Quote:
Posted By DouglasK1 on 06/17/2016 6:54 AM
Posted By GeorgeD6 on 06/16/2016 10:37 AM

When they try to amend cc&r will county courthouse read current one to see if what they are doing is legal?


No, they will just record any documents that are filed correctly, they won't attempt to verify that the vote was proper.

Correct.

If you want verification, you need to challenge the amendment in court.
The court will then verify the documentation.
GeorgeD6 (Texas)
Posts: 11
Posted:
Wow you all are amazing. So much info. Thank you all so much.

PLease note that I am gathering information and in no way will take what someone says here as legal advice.

Just looking for direction, ideas etc.

I just found out our bylaws are in 404 error off the hoa website.

Doing some checking online the bylaws don't exist, called to county clerk office, what a joy,

they can't find them.

So I will go downtown next week and see what to do. There has got to be a way I can stick a memo in there.

I am rather sure the Prez. has some back office people, he tried to run for mayor.

Thank you all so much!
KerryL1 (California)
Posts: 14,550
Posted:
Are you on the Board, George? How many directors?

I agree with those who say get an HOA attorney and try to round up a few other Owners to chip in. Get the attorney's opinion of the passage you cite and any other that's relevant.

Have the attorney write to the Board to inform them that they're proceeding illegally.

Btw, why did it cost $400 to mail out ballots? Were there lots of materials accompanying the ballot? How many households in your HOA?
GeorgeD6 (Texas)
Posts: 11
Posted:
Just under 600 members. Management said it would be about $400 to mail out.

Stuffing envelopes and such they need to get paid.

I just found out our bylaws are not recorded in Bexar County, they don't really matter but the positive voting is in there.

Will go down next week and see what they really have.
GeorgeD6 (Texas)
Posts: 11
Posted:
Never on board but have in the past been the guy that helped out for free or cheap.

Moved in 1991. HOA started 1984.

DouglasK1 (Florida)
Posts: 2,046
Posted:
Quote:
Posted By GeorgeD6 on 06/17/2016 5:09 PM

I just found out our bylaws are not recorded in Bexar County, they don't really matter but the positive voting is in there.

Generally, CCRs, deed restrictions, or similar docs that are attached to the deed are recorded with the county. Bylaws are often not, they are just kept by the HOA corporation.
Escaped former treasurer and director of a self managed association.
PitA
Posts: 1,416
Posted:
Any 'positive voting' provision contained in the bylaws only applies to corporate matters such as voting for directors, budgets, etc. but does NOT, repeat NOT apply to requirements to amend the Covenants and Restrictions themselves.
JamesG11 (Florida)
Posts: 118
Posted:
Unless, of course, the CC&Rs defer to the voting procedures set forth in the Bylaws...
TimB4 (Tennessee)
Posts: 21,059
Posted:
I agree with John (aka PitA).

The language in the Bylaws create a conflict with the CC&Rs with regard to votes on amendments to the CC&Rs.
When there is a conflict, the document with the higher precedent (in this case, the CC&Rs) must be complied with unless that document defers to the lower document.

Of course, since it's written in the Bylaws and this is what the Board is going by, the amendment will likely be adopted, recorded and enforced unless someone challenges it within the courts. Such a challenge will require an attorney, time, energy and money. None of which is likely to be reimbursed by the losing party.

Therefore, the question becomes, how much of an issue is this for you and are you willing to pony up or gather support from others and, as a group, pony up the money to make the challenge?
PitA
Posts: 1,416
Posted:
Quote:
Posted By JamesG11 on 06/18/2016 6:50 AM
Unless, of course, the CC&Rs defer to the voting procedures set forth in the Bylaws...

That would be bass ackwards.

The CCRs are the top document in the hierarchy.

JamesG11 (Florida)
Posts: 118
Posted:
Although it is undeniably true that CC&R provisions control a contrary provision in the Bylaws, that was not what I was saying.

What I stated was that if a provision in the CC&Rs specifically deferred to the (or a) procedure for voting set forth in the Bylaws, the latter would control. This is also undeniable.

KerryL1 (California)
Posts: 14,550
Posted:
You are right, of course, James.

The OP is discussing amendments to the CC&Rs. Now, I suppose the CC&Rs could say, blah, blah, blah, unless the Bylaws state otherwise. But that is truly nonsensical.

Similarly, why would the Bylaws say anything about procedures to amend the CC&Rs?

George, I must have missed something: what is the wording in the Bylaws that speaks of a positive vote? If you don't have a copy how do you know this is true?

JamesG11 (Florida)
Posts: 118
Posted:
I'll grant you that is highly unusual and counter-intuitive, Kerry, but I have seen such verbiage on rare occasions.

Let me give you an example: the CC&Rs state that they can be amended by a 2/3rds vote of the membership except if the amendment involves "X." In the event an amendment is proposed concerning "X," then the voting percentage required in the Bylaws for "Y" govern -- which may be a substantially more onerous hurdle to overcome, i.e. 90% of the votes of the membership.
JamesG11 (Florida)
Posts: 118
Posted:
I'm trying to remember the specific context in which I encountered this oddity. If I recall correctly, the Bylaws of the Association in question could be amended by a certain percentage except if the proposed Bylaw amendment involved the reduction in the number of directors on the Board from the number originally prescribed. In that latter case, instead of a 2/3rds vote of the membership being necessary, a 90% vote was required.

The CC&Rs could be amended by a 75% vote of the membership generally, but the 90% requirement set forth in the Bylaws would govern any proposed CC&R amendments seeking to impose additional restrictions on an owner's right to lease his/her property.

I may be off some on the percentages (this happened a number of years back), but I remember it because it was such an unusual approach. Typically where the author of a set of CC&Rs decides to include a variance in voting requirements based on subject matter, those varying percentages are laid out in separate paragraphs within the CC&Rs themselves.
LarryB13 (Arizona)
Posts: 4,099
Posted:
Quote:
Posted By GeorgeD6 on 06/16/2016 10:37 AM
When they try to amend cc&r will county courthouse read current one to see if what they are doing is legal?


It is not the recorder's job to pass judgment on the legality of what someone else is doing.

This is your fight, not the recorder's. Do not expect someone else to fight your battles.

Hire an attorney and file for an injunction to end this farce asap.

GeorgeD6 (Texas)
Posts: 11
Posted:
The section 9.03 is part of covenants, our bylaws have the positive voting in them though there out of order and scewed like someone tried to add them after the fact. Also the bylaws can't be pulled up like all other docs. I even called and the clerk could not find them using vol / pages nor the doc number. Will go down and see if there really valid.

I mention 9.03 because it states they can't amend the covenants till last year of year 10, so that is first thing that if they do will be against rules.

Getting signatures won't happen because they will be accepting non returned ballots as "YES" votes.
NpS (Pennsylvania)
Posts: 4,216
Posted:
Quote:
Posted By GeorgeD6 on 06/19/2016 8:05 PM
The section 9.03 is part of covenants, our bylaws have the positive voting in them though there out of order and scewed like someone tried to add them after the fact. Also the bylaws can't be pulled up like all other docs. I even called and the clerk could not find them using vol / pages nor the doc number. Will go down and see if there really valid.

I mention 9.03 because it states they can't amend the covenants till last year of year 10, so that is first thing that if they do will be against rules.

Getting signatures won't happen because they will be accepting non returned ballots as "YES" votes.

The way I read 9.03 amendments can be made at any time. Not sure where u get the 10th year rule from.
Sikubali jukumu. Read all posts at your own risk.
GeorgeD6 (Texas)
Posts: 11
Posted:
NpS: In the first 30 years yes but we are at year 32. This part right here:

"during any succeeding ten (10) year period, said document may be amended during the last year of any such ten (10) year period by an instrument signed by not less than 75 percent of the Owners"
NpS (Pennsylvania)
Posts: 4,216
Posted:
Quote:
Posted By GeorgeD6 on 06/20/2016 8:19 AM
NpS: In the first 30 years yes but we are at year 32. This part right here:

"during any succeeding ten (10) year period, said document may be amended during the last year of any such ten (10) year period by an instrument signed by not less than 75 percent of the Owners"

Missed that. Looks like a lousy cut and paste job.
Never heard of docs theat couldn't be amended- except once every 10 years. Could probably get a judge to rule in favor of an earlier revision if you have enough signatures.

Imagine this - 100% of owners agree to amend - but have to wait 3 years. Just plain silly IMO.
Sikubali jukumu. Read all posts at your own risk.
BobD4 (up north)
Posts: 1,002
Posted:
Quote:
Posted By GeorgeD6 on 06/20/2016 8:19 AM
NpS: . . "during any succeeding ten (10) year period, said document may be amended during the last year of any such ten (10) year period by an instrument signed by not less than 75 percent of the Owners"

Maybe designed to offer a dissenter or investor a buffer - albeit declining - of additional time to sell out before something unpleasant now gaining support among other owners.

Even if the effective date of some change could be no earlier than during year 10, perhaps may be intended to afford sober second thought by a community . . . time to compromise ? . . .
GeorgeD6 (Texas)
Posts: 11
Posted:
9.03 section is exactly what the covenants read but yes I did type them up after a failed OCR of the pdf file I obtained from county.

They did have 30 years to amend but they never did so now we are in year 32 so they need to wait as per our covenant which is about 7 years from now.

I brought section 9.03 at board meeting the President said, "we don't go by those rules anymore, they have expired". which isn't correct and the other reason why I am trying to get others on board.
GeorgeD6 (Texas)
Posts: 11
Posted:
Just thought I would recap that the fraudulent ballot (in my mind) was approved. County clerk office says they don't read these rules, it's up to our HOA / attorneys to not break law / rules. So unless we hier attorney they will get away with this and what amazes me is how fast they did it. Sep 3rd is last date people can repair their house without getting permission. This will be interesting because I know they will start suing people. So what happens when that person shows the old doc which clearly says they can't amend.
TimB4 (Tennessee)
Posts: 21,059
Posted:
Quote:
Posted By GeorgeD6 on 08/29/2016 10:57 AM

So what happens when that person shows the old doc which clearly says they can't amend.

If shown to the Board, the Board will likely simply say the rule changed.
If shown in court, the Court may likely honor it.

Keep in mind that some States/Counties have a statute of limitations when an amendment can be challenged. If your State is one of those and the issue isn't challenged within that time frame, it won't matter if what the Board did was proper or not. The State will likely rule you lost your chance to challenge.
GeorgeD6 (Texas)
Posts: 11
Posted:
The most important part about all this is laws were broken but then after what hillary did or did not do that is just how it works in America. Luckly Karma keeps watch !
TimB4 (Tennessee)
Posts: 21,059
Posted:
Civil laws and Criminal laws are different.

Criminal laws are enforced by the State.
Civil laws are enforced by those involved and ruled on by the State.

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