Questions re BL & CCRs update post-developer

Started by JeremyC2 • 4 replies • 1168 views

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JeremyC2 (Texas)
Posts: 6

Posted:

Good afternoon everyone. Y'all gave me some good advice about a year ago, so I'm back with some questi)

I am on my HOA's Bylaws Committee which is charged with reviewing and updating our Bylaws and CCRs.

Parts of it have to do with harmonizing with new state laws (Texas) which is easy enough, but I have three big questions I'd like to ask for advice on.

1) For an HOA recently (relatively) turned over from Developer to Owner control, should we remove all of the "Declarant" language, or leave it in there? There are several large chunks dedicated to Declarant - the majority of two entire articles, and several sections in other articles. Some of them are "ongoing things in-force", others are "one-off events".

For example, an entire article is dedicated to the Declarant conveying the Common Property to the Association. Would this be something to remove or must it be kept to record the conveyances? My instinct is to remove it as I see it as obsolete - although the way it is written, the developer still has the power to convey to us more Common Property if they so chose. I don't know if there is a legal consequence to removing it entirely.

The "ongoing things in-force" items are easier to decide of course.

2) Regarding Board Member terms, is it reasonable/common/odd to set distinct dates (or rules for dates, like "3rd Thursday in April") for terms to begin/end? Our existing language is almost non-existent on the topic - the only thing it says is "2 years". The board is supposed to be 3-members with 2-year staggered terms, but we've sort of botched things up already and have one board member way off the intended cycle.

Basically we forgot to hold an election for one Board member slot in early 2015, and an election was forced in late 2015. That slot is now way off the originally intended schedule which causes quite a bit of second-order mucking-up-of-things (officer terms, insurance periods, probably more). There's no mechanism in either the Bylaws or TX Prop Code to realign that slot's term.

Fixing it one-off is easy (simple Bylaw amendment), but I'd like to prevent that sort of thing from happening again.

3) Is it normal/preferable/best-practice/pointless/doesn't-matter/whatever to split the Design Standards into a separately standing document? Our Bylaws and CCRs are inconsistent both inter and intra with regard to where they are - both the BL and CCRs refer to them as a separate document by different names, but they are actually located in an Article in the CCRs. I've been asked about splitting them into a separate document. If it's more normal for them to be within the CCRs, I can just clean up the nomenclature references.

Thanks in advance for replies and advice.

JeremyC2 (Texas)
Posts: 6

Posted:

Oops, a non-BL/CCR question as well.

We have a Lot (built) that is currently unoccupied, the owners are out of town - the husband is deployed on active duty. The house is falling into disrepair and there have been complaints.

Under the CCRs, the Association has the authority to demand repair, and if repairs are not made, the Association has the power of abatement, with the cost being assessed against that Owner.

Given that the Owner is deployed on active duty, the SCRA applies - although I have not fully read it and determined whether it bars us from levying an assessment for abatement/repairs on the property.

There are of course the usual two sides: one side that wants to hammer the Owners for not following strictly to the CCRs, and the side that says "they're active duty military, let's try to help instead of hammer".

One of the ideas that has been brought up is to use one of our Bylaw clauses. In the section for "Duties of the Board", we have one that reads: "It shall be the duty of the Board to levy enforcement assessments when necessary"

So the thought is this:
* The Board issues a Resolution: "This Board has resolved that enforcement assessments made against Lots under protection of the SCRA are unnecessary to collect under Bylaw [chapter and verse]. Such assessments, being contrary to the SCRA, shall be forgiven."

Then we go ahead and make repairs under the Power of Abatement (subject to TROPA notice and waiting periods), file the enforcement assessment, allow the Owner to respond with an SCRA notice, and it all is dropped with the net effect of the Association helping the military family out, even just a little.

Thoughts? Is that a reasonable use of "when necessary"? Has anyone else had to do something similar due to SCRA?

(and for the record, I'm on the "help" side)

-j

TimB4 (Tennessee)
Posts: 21,059

Posted:

Jeramy,

1) Yes, if you are rewriting the governing documents, it's always a good idea to remove any references to the Declarant (expecting, of course, that the declarant is actually out of the picture).

2) No, it is not reasonable to specify the actual dates of meetings. This could limit individuals who have conflicts on those dates from serving. Additionally, if there are scheduling conflicts, it's possible that a quorum would not be met at the specified meeting in the docs. It's easier for the Board to set their own meeting dates based on the availability of Board members.

It is reasonable to specify the minimum number of times a Board would meet. For example: The Board shall meet as they deem necessary but shall be at least once a quarter.

3) For Condominiums, it's typical for them to be within the deed restrictions or Bylaws and filed with the State. For single family homes, it's typical to only have a requirement of requesting and receving approval from the Association for any exterior change and to have architectural guidelines as a separate document.

Remember, with the requirements part of the CC&Rs, they are more easily enforceable if taken to the courts.

4) No, the Board should not issue such a resolution. The way you worded it, sounds like the physical assessments are waived, and that would likely be a conflict with the resolution and the CC&Rs.

Instead, find a good email address for the service member and make sure that they are aware of the issue. It's likely that they have zero idea what is going on. Mailing addresses and potential email address can be obtained by the military locator service.

We had a military member who was renting and the home was in disrepair. He was completely unaware of the issue. Once we contacted him directly (and not through his renter or rental manager) the issue was immediately taken care of and we were informed of a new rental manager.

For those reading this thread: SCRA is Servicemember's Civil Relief Act

Note: We have similar language to be able to enter the property to make repairs. However, our attorney informed us that we should never do such without a court order unless it is a safety issue. Otherwise, you could be defending a charge of trespassing.

SheliaH (Indiana)
Posts: 6,964

Posted:

1. If the developer is completely out of the picture, you might want to remove all of the references to the declarant – you could have your association attorney handle that portion, although you should read each section carefully to see if it refers to something you’ll need to keep – simply change "declarant" to the board or association. By the way, I do hope your association attorney is assisting you with all this - if you don't update governing documents the right way, you may risk them not being enforceable.

2. I suppose you could set distinct dates for ending terms, but everyone should be keeping track of when they come in. The secretary can also note appointments, resignations and such in board meeting or annual meeting minutes and the information posted on your website, such as John Doe (term ends March 2017). This way, people will know who’s up for re-election and when.

Our board also ran into some confusion when two or three people left the same year at different times and no one kept up as to when anyone’s term started and the last time they were elected (we have three year terms on a staggered basis). We figured it out by going through two years of board minutes and then restarted the next year.

3. I think I’d put design standards in a separate document, as those will likely change a lot faster than a CCR on, say, alternative dispute resolution. Your CCRs could say (1) homeowners are required to get exterior changes approved by the board before being installed and those changes must comply with the Association’s design standards (2) exterior changes requiring prior approval are (doors, windows, etc.) (3) design standards for exterior changes will address the following (not inclusive list) – color, material, dimensions, locations, etc. (4) design standards shall be determined by the board and listed in the Association’s policies, procedures and protocols

4. As far as the dilapidated house is concerned, it seems to me it’s enough the CCRs allow the association to make repairs and charge the owner. As you note, the owner is active duty, so you won’t be able to foreclose on it, but I don’t know if that would prevent you from making the repairs and filing a lien on the house for the cost (keep it active but don’t take any legal action until the family’s back in town).

I’d run this by the association attorney, but in the meantime, do you have any contact information for the family? If so, contact them and see what their situation is – if they live nearby, they might be able to send someone to take care of the house. If money’s an issue (and it probably is), perhaps you can contact some sort of military support group or veteran’s association that could step forward for simple maintenance, such as keeping the lawn cut and the weeds down until the family returns.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

KerryL1 (California)
Posts: 14,550

Posted:

With Sheila, do have an attorney review you suggested changes. Sometimes, as in our HOA, the developer still retained certain rights after turnoff. He, for instance, still had some say for 10 years in architectural changes (though he never exercised same)

In other cases the rights or obligations were turned over to the Board so the declarant would be eliminated entirely form the bylaws & CC&Rs. And sometimes the conditions for the declarant didn't apply to anyone else after turnover.

We have a lot lot of architectural requirements in our CC&Rs, which also state the board may add further ones and so an Architectural Guidelines was crafted some time ago with additional restrictions. We're currently considering another in our condo building and I'm very glass we don't need a CC&R amendment to implement it!

Agreeing with Tim, we have not set election dates, but our bylaws do say something about being conducted about 12 months of the previous election. though our board must meet monthly to keep on top of things our Bylaws specify quarterly because CA requires that financials be available to Owners quarterly and they need board approval (subject to the ear-end audit).

With a board of 7 we sometimes have had an epidemic of resignations, which has gotten our staggered terms messed up. When a vacancy is filled here, the person only serves until the next election. When we've had this issue, say, 5 seats up for reelection, we specify in the going instruction that our will serve 2 years and the lowest vote getter, one year.

Our officer terms are only one year sand there's no problem with that for us.

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