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ReneeP3 (South Carolina)
Posts: 42
Posted:
I'll apologize in advance for this long explanation.

These covenants are to run with the land and shall be binding upon all persons, whether deeds make reference to them or not until January 1, 2006 at which time they will be automatically extended for successive periods of (10) years unless by a majority of the then owners it is agreed to change said covenants in whole or in part.
Notice there is no directive as to a meeting, signature petition, NOTHING.

In November, we put forward a vote to amend the CC&R's. This was a meeting vote. Quorum was not achieved, the Board notified the homeowners that the meeting was adjourned and that they were no longer pursuing amending the covenants.

Shortly afterwards, the former Board President, petitioned the board for a "special meeting" to again take a stab at amending the covenants. The Board announced the meeting to take place on December 16th. The Board sent out another copy of the proposed revised CC&R's as well as two additional pieces of paper. One had an interesting twist. It was entitled:

"Special Meeting Proxy/Ballot"
51% (46)of members must be present in person or by proxy to meet quorum requirements to conduct business.
PLEASE RETURN TO HOA MGT NO LATER THAN 12/15/15 FOR VALIDATION.
400 CENTURY PARKWAY, GREENVILLE SC

Owner Name/Address: ______________________________________
Owner Signature:__________________________
Phone # for use in verifying your proxy: _______________________

Ballot VOTE OPTIONS: (select One)

Vote No to Amendment ______
Vote Yes to Amendment _____

The Board actually told people they didn't have to attend the meeting, they could send in their ballots to the property manager or contact the former president and he would bring a notary to over to their house to notarize a separate Signature Page for Petition and pick-up their ballot. Ballots received prior to the meeting were carried into the meeting and counted towards quorum and towards acceptance of the new covenants along with those cast at the meeting. The Board was notified that they were in violation of both our bylaws as well as the State rules of non-profit corporations voting rules. We allow for proxy's to vote for members not in attendance, but that the ballot cast outside of the meeting, by the owner, not the owners proxy was an absentee ballot and that is not allowed by either or bylaw's or the state laws. The following day, the Board sent out an email announcing Quorum was met at last night's special meeting. This means that all votes received are valid and can be counted towards the Amendment. They did not announce the results of the vote. Instead they said, If you have not yet voted, please do so no later than 5:00pm Monday December 21, 2015. So they extended the vote, after quorum was achieved and a vote taken, an additional week. They provided to the former board president a list of members who had not submitted ballots and he began contacting people. After multiple emails to the Board for a demand to know the results of the vote, the Board announced a PRELIMINARY count 46 in favor, 4 opposed. The required number to approve the covenant change was 46 votes, which they had. So why would you extend a vote, not having the power to do so by either the State or the HOA governing documents? It became very apparent after they filed the new covenants, 2 of the signatures were invalid as they were spouses not on the deed. They received an additional 2 signatures after the meeting vote in favor, and 8 signatures opposed when they announced after the week extension that "The Revised Covenants Have Been Passed"!

They filed the new covenants on 1/4/2016.

My questions:

If in the C&C&R's there is no directive on how to cast your vote, are you limited to the bylaws?

Where are the legal objections to calling a meeting vote then accepting ballots outside of the meeting?

What are the legal objections to holding a meeting, receiving more than enough total votes (50), and refusing to acknowledge that voting has been concluded because you didn't achieve the desired outcome of passing the covenants.

Because the CC&R's are silent does any of this matter. Heck, just get 46 valid people to sign the form below and everything's good! What they submitted to the county were 48 individual Notarized Signature Page for Petition forms as verification that 48 owners approved the change of the amendments. I remind that 2 of those names are invalid because they are not on the deed. 2 names were obtained 2 days following the meeting vote. Below is literally the form, minus the notary information which was included.

SIGNATURE PAGE FOR PETITION

Witness:

________________________ LOT # ________

________________________ Print Name ____________________________
lot owner name

Signature ________________________________

Print Name _________________________________
lot owner name

Signature _________________________________

I understand nobody is an attorney. I also understand that you've all seen a lot and because of that you're more aware of how the courts have seen this and I'm trying to figure out if this is worth contacting an attorney about.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
This is what our HOA did to change our CC&R's. Otherwise we would never have gotten a quorum or the number of votes needed. The vote required was 90% of 107 members. It also required a "Special meeting" to gather the votes. No way that was ever going to happen. We could barely get 5 people to show up to a regular meeting.

What your HOA looks like they are doing is a method to allow members to cast their vote without the special meeting. In order to do that, they have to "give up" that right to do it in a special meeting setting. Which is no big deal as it then allows the HOA to go door to door to gather the votes. A much easier method of obtaining the vote than trying to get anyone to come a special meeting.

Former HOA President
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Renee

Can we assume you are against the change thus your questioning the procedure?

Of the top of my head I believe what you are calling a "ballot" might well be considered a "Proxy" thus entirely legal. One reason I say this is that you said it counted toward achieving Quorum which is usually done via attendance and/or Proxy.

I am a little confused on the time extension but I believe there is a way to do such like reconvening or something an existing meeting.

PitA
Posts: 1,416
Posted:
IMO:

If there are no provisions for amending INSIDE the CCRs they may NOT be amended by any less than 100% of the 'covenantees'.

They are a legally binding contract.

A legally binding contract may ONLY be amended according to contract law.

If the contract ITSELF has a procedure for amending same - 'good to go'.

If not, not.
PitA
Posts: 1,416
Posted:
IMO:

If there are no provisions for amending INSIDE the CCRs they may NOT be amended by any less than 100% of the 'covenantees'.

They are a legally binding contract.

A legally binding contract may ONLY be amended according to contract law.

If the contract ITSELF has a procedure for amending same - 'good to go'.

If not, not.
PitA
Posts: 1,416
Posted:
IMO:

If there are no provisions for amending INSIDE the CCRs they may NOT be amended by any less than 100% of the 'covenantees'.

They are a legally binding contract.

A legally binding contract may ONLY be amended according to contract law.

If the contract ITSELF has a procedure for amending same - 'good to go'.

If not, not.
PitA
Posts: 1,416
Posted:
IMO:

If there are no provisions for amending INSIDE the CCRs they may NOT be amended by any less than 100% of the 'covenantees'.

They are a legally binding contract.

A legally binding contract may ONLY be amended according to contract law.

If the contract ITSELF has a procedure for amending same - 'good to go'.

If not, not.
PitA
Posts: 1,416
Posted:
IMO:

If there are no provisions for amending INSIDE the CCRs they may NOT be amended by any less than 100% of the 'covenantees'.

They are a legally binding contract.

A legally binding contract may ONLY be amended according to contract law.

If the contract ITSELF has a procedure for amending same - 'good to go'.

If not, not.
PitA
Posts: 1,416
Posted:
IMO:

If there are no provisions for amending INSIDE the CCRs they may NOT be amended by any less than 100% of the 'covenantees'.

They are a legally binding contract.

A legally binding contract may ONLY be amended according to contract law.

If the contract ITSELF has a procedure for amending same - 'good to go'.

If not, not.
PitA
Posts: 1,416
Posted:
IMO:

If there are no provisions for amending INSIDE the CCRs they may NOT be amended by any less than 100% of the 'covenantees'.

They are a legally binding contract.

A legally binding contract may ONLY be amended according to contract law.

If the contract ITSELF has a procedure for amending same - 'good to go'.

If not, not.
PitA
Posts: 1,416
Posted:
IMO:

If there are no provisions for amending INSIDE the CCRs they may NOT be amended by any less than 100% of the 'covenantees'.

They are a legally binding contract.

A legally binding contract may ONLY be amended according to contract law.

If the contract ITSELF has a procedure for amending same - 'good to go'.

If not, not.
PitA
Posts: 1,416
Posted:
IMO:

If there are no provisions for amending INSIDE the CCRs they may NOT be amended by any less than 100% of the 'covenantees'.

They are a legally binding contract.

A legally binding contract may ONLY be amended according to contract law.

If the contract ITSELF has a procedure for amending same - 'good to go'.

If not, not.
PitA
Posts: 1,416
Posted:
IMO:

If there are no provisions for amending INSIDE the CCRs they may NOT be amended by any less than 100% of the 'covenantees'.

They are a legally binding contract.

A legally binding contract may ONLY be amended according to contract law.

If the contract ITSELF has a procedure for amending same - 'good to go'.

If not, not.
PitA
Posts: 1,416
Posted:
IMO:

If there are no provisions for amending INSIDE the CCRs they may NOT be amended by any less than 100% of the 'covenantees'.

They are a legally binding contract.

A legally binding contract may ONLY be amended according to contract law.

If the contract ITSELF has a procedure for amending same - 'good to go'.

If not, not.
PitA
Posts: 1,416
Posted:
IMO:

If there are no provisions for amending INSIDE the CCRs they may NOT be amended by any less than 100% of the 'covenantees'.

They are a legally binding contract.

A legally binding contract may ONLY be amended according to contract law.

If the contract ITSELF has a procedure for amending same - 'good to go'.

If not, not.
PitA
Posts: 1,416
Posted:
IMO:

If there are no provisions for amending INSIDE the CCRs they may NOT be amended by any less than 100% of the 'covenantees'.

They are a legally binding contract.

A legally binding contract may ONLY be amended according to contract law.

If the contract ITSELF has a procedure for amending same - 'good to go'.

If not, not.
PitA
Posts: 1,416
Posted:
IMO:

If there are no provisions for amending INSIDE the CCRs they may NOT be amended by any less than 100% of the 'covenantees'.

They are a legally binding contract.

A legally binding contract may ONLY be amended according to contract law.

If the contract ITSELF has a procedure for amending same - 'good to go'.

If not, not.
ReneeP3 (South Carolina)
Posts: 42
Posted:
Our HOA did both.

This was to be a "special meeting" vote on 12/16/2016.

They sent to the homeowners directions and a ballot.

They entitled the Ballot XXXXXHOA 2015 Special meeting Proxy/Ballot. The Ballot wasn't a directed proxy. In the top portion of my posting is the exact verbiage of the Ballot/Proxy. No proxy was assigned. The owner voted either by sending it into the PM or they came to the meeting and voted at the meeting.

From everything I can see, they ran both a mail in vote that ended on 12/15/15 and they ran a meeting vote on 12/16/15. They achieved quorum by bringing the mail in ballots to the meeting and using them as proxy's. That's if I understand the definition of a proxy.

NpS (Pennsylvania)
Posts: 4,216
Posted:
Hi Renee

To my knowledge, a proxy requires a physical person at the meeting to cast the vote (ballot). That person is the owner's proxy.

Unlike your form, a legitimate proxy form will identify the name of the person who will be the owner's proxy. If the proxy person isn't at the meeting, the ballot doesn't get counted.

I agree with you that the failure to identify a specific person to be the owner's proxy makes it an absentee ballot instead of a proxy.

Sikubali jukumu. Read all posts at your own risk.
ReneeP3 (South Carolina)
Posts: 42
Posted:
I did vote no.

They changed our covenants: NO NUMBERED LOT OR ANY PART THEREOF SHALL BE USED FOR ANY BUSINESS OR COMMERIAL PURPOSE OR FOR ANY PUBLIC PURPOSE.

To No numbered lot or any part thereof shall be used for any type of commercial or public purpose which negatively impacts neighborhood traffic.

Having just moved out of a rental house where my neighbor a psychologist had clients coming and going every hour on the hour, this was my worse nightmare. I posed my concerns. I asked them to tighten up the verbiage. Identify what will be considered as a traffic impact. Hey just acknowledge that you can work out of your home, but limit it to the homeowner and immediate family. Client meetings and employees are not allowed within the residential neighborhood.

This has much much more to do with integrity. The voting procedures in place protects both those who are in agreement as well as those that are in disagreement. It's clean, neat, and the outcome represents the majority view of the owners.

The Board's position was that this is a "proxy" and would be used to achieve quorum. It was also used to count as a vote.

The Board didn't reconvene. They held a meeting on 12/16/2015. They announced the following day that the meeting achieved quorum and therefore the votes could be counted. They extended the time following the meeting even after having achieved quorum. Even after achieving the necessary 46 affirmative votes to pass the covenant change. Why? Because they had two signatures that couldn't be counted. They weren't homeowners. I know this because I audited the county tax records/deeds.
ReneeP3 (South Carolina)
Posts: 42
Posted:
Pita, the covenants actually have two separate paragraphs regarding amending the covenants. In my initial story, I only referenced the one, because it's the one that the Board chose to use.

However, having said that.

1st Paragraph:

These covenants are to run with the land and shall be binding upon all persons, whether deeds make reference to them or not until January 1, 2006, at which time they will be automatically extended for successive periods of ten (10) years unless by a majority of the then owners it is agreed to change said covenants in whole or in part.

4th Paragraph:

These restrictions may be amended at any time prior to the expiration thereof upon a 75% signature petition consent of the owners of the real estate. In determining the 75% owners of the real estate, each lot shall be entitled to one (1) vote, irrespective of joint ownership.

5 attorney's prior to the vote to amend were consulted.

The previous Board President met with the HOA Attorney to review the existing documents. He acknowledged that there is a conflict and that a 75% vote would be the better way to go.

3 additional attorney's by various committee members and homeowners also reviewed the existing CC&R's and each of those said, yep should go with 75%, but it's going to be a judges call.

The new Board, changed attorney's. His position was that because it was a 10 year period, renewing on 1/1/2016, 51% would be just fine. Unfortunately paragraph 1 doesn't tell you how this is to be done. So the choice by the Board was a meeting vote.
Our contract for a 10 year renewal doesn't have a procedure, so does that mean that 100% should have voted this in?

NpS (Pennsylvania)
Posts: 4,216
Posted:
Hi Renee

My township's zoning laws have a classification titled "low impact home business".

It separates out the people who do business from their home from those who create additional congestion (delivery trucks, clients with appointments, employees, etc).

You might want to check into your local zoning laws to see how they deal with the issue.


Sikubali jukumu. Read all posts at your own risk.
ReneeP3 (South Carolina)
Posts: 42
Posted:
That was done the day that I received the proposed revised covenants. We're in farmland, zone 10, anything outside of the CC&R's goes. My back fence butts up to a pasture that until a few years ago supported cows.
PitA
Posts: 1,416
Posted:
at the ten year mark - simple majority of ALL owners, not merely a quorum

between 'marks' - 75% of ALL owners required
ReneeP3 (South Carolina)
Posts: 42
Posted:
Yes PitA.

The the board holds that there are 91 lots. This was a big issue at the beginning of this amendment procedure. One former Board President from years back, pointed out the boards numbers was wrong. The response from the Board reminded me of a rabid dog attack. So, the reality is, if you count the plat map, there are 94 lots, the board can scream no there aren't, but I've gone through it and the county records and yes there are. There are 90 unique owners as 4 owners each own two lots. This subdivision is not new. It's 30+ years old. All the lots in owner hands.

If each lot has one vote, then Quorum for meetings is 48. If each lot has one vote, then for the amendment to pass it should be 48 valid votes.

I hate to knit pick this stuff. Some of this is for another day. My interest lies really in understanding whether or not the voting process was done correctly. Was it a proxy, if you've achieved a quorum and taken a vote, does the board have the right to extend out a vote after the meeting. This is like a bad meeting sandwich. Before the meeting you're accepting votes, then you're accepting votes at the meeting, then you're accepting votes after the meeting.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Renee

The more you post the more it sounds like the BOD may have done it properly. As an example in your first few posts you never mentioned the "ballot" said Proxy. Was this a convenient oversight on your part or more you not properly understanding?

ReneeP3 (South Carolina)
Posts: 42
Posted:
Wow, snarky. That's more than just offensive.

You really need to go back to the top of this posting. My initial explanation. I might direct your jaundiced eye to the exact wording of the ballot. PROXY/BALLOT.

I'll be waiting for your apology.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Quote:
Posted By ReneeP3 on 06/29/2016 3:38 PM
Wow, snarky. That's more than just offensive.

You really need to go back to the top of this posting. My initial explanation. I might direct your jaundiced eye to the exact wording of the ballot. PROXY/BALLOT.

I'll be waiting for your apology.

Renne

You are correct. You did say Proxy/Ballot and I am sorry for my oversight of this.
JamesG11 (Florida)
Posts: 118
Posted:
Consult an attorney. The way I read the amendment provisions you've shared, they provide that after Jan 1, 2006 the CC&Rs in their original state will be automatically extended for 10 year periods unless -- at ANY time after Jan 1, 2006 -- they are amended by a majority of the owners.

I read the 75% amendment procedure to apply in the event that an amendment is sought BEFORE Jan 1, 2006.

The draftsmanship is pretty lousy, I'll grant you, but that's the only logical way IMO to construe those provisions. However, you will need to consult an experienced attorney in your state to secure an opinion that's worth a damn.

The procedure used also strikes me as suspect. However, once again, my observation is not predicated on an understanding of SC law -- which might deviate materially from Florida law.

Good luck!
ReneeP3 (South Carolina)
Posts: 42
Posted:
Apology accepted.
PitA
Posts: 1,416
Posted:
REMEMBER:

CCR amendments are not effective with merely a % of votes at a 'quorumed' meeting

but

REQUIRE a % of the TOTAL membership.

eg.

94 lots @ 75% = 70.5 = 71 actual AYE votes to pass ~ a non vote = NAY

----------------------------------------------------------------

What does your attorney say ?
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Renee

As Pita said, typically Covenant changes require the % outlined in the docs (typically 66% or more) voting FOR the change. It is not simply that % of a Quorum. It is the % of all owners.

Say 120 owners and 50% needed for a Quorum.

1. Must have at least 60 owners present in person or via Proxy.

2. It will require 88 (66%) owners to pass an amendment change voting in person or via Proxy.

Typically an Amendment can be done without a meeting. It is possible to have proper paperwork and have an owner sign it. In one association we went door to door to talk to people and had them sign off/vote. We also used a double sign off. Owner and witness and a date and time stamp.

JamesG11 (Florida)
Posts: 118
Posted:
Yes, as others have observed, the language in your docs (as excerpted in your earlier post) requires a majority of ALL owners to vote in favor of the amendments (post-Jan 1, 2006).

When documents allow a majority (or a super-majority) vote of those present (in person or by proxy) at a meeting (where a quorum has been established) to enact an amendment, those docs say so explicitly.

Typically, your Association bylaws will provide visibility into the required PROCEDURES to be used in a membership vote (e.g., notice/proxy/quorum/manner of casting votes requirements), so you need to review your bylaws carefully to determine whether those procedures have been followed.

These are general observations only; the laws within your state could impact them materially. That is why it is essential to obtain a legal opinion from an experienced HOA attorney in your state if you want proper guidance.

Good luck!

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