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RichardD (North Carolina)
Posts: 66
Posted:
Again I am requesting assistance from the most knowledgeable group on the internet. A 70 unit,(over 55),condominium in NC, with a Declaration, Articles of Inc., Bylaws & Rules and Regulations.
A small group of homeowners have signed a petition for a special meeting to vote on changing the Declaration & Bylaws. This change is to remove a line in both documents that says the Board may "Adopt and amend rules and regulations". My argument is that the powers of the Board are set forth in state statute 47C and the line in question is a direct quote from this reference. I do not believe they are subject to change by the homeowners. The homeowners feel that since the Declaration also states that it may be amended by a 67% vote of all homeowners, that changing these lines are legal.
Finally, what actually defines what part or parts of the Declaration is amendable?
Would appreciate any and all input. RichardD
MelissaP1 (Alabama)
Posts: 13,836
Posted:
Your HOA should be ammending the Convenants and Restrictions and By-laws. The CC&R's are the deed restrictions. The by-laws are the rules of the HOA. The CC&R's overrided the by-laws if in conflict with eachother. The Articles of incorporation are State filed documents and define your HOA as a corporation. They may not be able to be ammended like the CC&R's and by-laws can be. (Whole other subject there).

Typically, it does take a majority vote of homeowners to change or ammend the rules of the HOA. Usually in a "Special meeting" called specifically for the changes. I recommend doing an update/ammending of rules every 5 years or when signicant law changes occur. (Satellite dishes to name one). The board usually is involved as they are the one's responsible for the budget. It takes money to file and develop the changes the homeowner's want. The homeowner's may change the rules at their discretion but the board has to spend the money to do so. The board is to represent the majority of the homeowner's anyway. The board must figure out the budget and costs associated with the filing/changes. This may be misinterpreted as the board controlling the changes. It's not.

I would highly recommend a lawyer. One that is familiar with corporate or contractual laws. It's not necessary if you have someone who knows what they are doing. However, how many would know what they are doing and everyone trust them if they aren't legally trained? It's just easier and less complicated to hire a professional.

It took us over 2 years to make a few simple changes. One's that were pertinent to our operation. That included eliminating ALL builder references and the 2 part voting system. Items which you may want to include when making changes. Especially such details as address changes or contact information. The final cost of the project was almost $2k. It was $700 in court filing costs alone. The rest were petition costs, copies, and sending letters of notification out to non-responders.

As for conflicts with the local, state, or federal laws... Your documents should have a clause that says that local, state, or federal laws override ANY rules or regulations of the HOA. Which means that the HOA rules can have more or less rules of their government counterparts but can NOT conflict with them. This is to account for anytime new rules like the Davis Sterling ACT are created after your HOA's documents were formed, you don't have to rewrite the documents each time. The HOA has to still obey whatever outside government rules exist even if they aren't in the documention per se. Hopefully, any new rules will be incorporated as the HOA get updated every few years. Another consideration as you make changes to the rules.

Former HOA President
GloriaM (North Carolina)
Posts: 829
Posted:
Richard:

What is their reason for wanting to amend such an important part of the boards responsibility? A board is in place to adopt, promulgate, and implement policies and proceedures. You are correct that NC Planned Community Act 47F does state that boards shall have that authority, General Statutues Chapter 55A also gives the boards this authority.

Since the order in which documents are enforced are; Federal, State, local, CCR's, Bylaws and so on... the state laws would supercide the governing documents.

Again I question why would anyone want to change this very important part of the intergrity of the future of any community? I hope that helps.
RogerB (Colorado)
Posts: 5,067
Posted:
Richard, you are wasting your time. Yes your members could amend and remove that line. But it would be meaningless because you stated state statute still gives them this authority. The state statute rules over the CC&Rs which rule over the By-laws. Perhaps what your members really want is to also be able to create or change Rules and Regulations. This can be done by amending the By-laws.
RichardD (North Carolina)
Posts: 66
Posted:
Again I question why would anyone want to change this very important part of the intergrity of the future of any community?

GloriaM. These are the 4-5 people in every community that resents the BOD having power. The 4-5 that don't read the covenants before buying and the 4-5 that want to manage the assn from a distance.
Thanks for your response.

Richard, you are wasting your time.

RogerB. I normally respect and look forward to your input, however I fail to appreciate the opening line of your response to my question. I feel that the questions I posed are legitimate and real concerns to me as president of this ass'n. If I correctly interpreted your response, after your opening line, then it seems your opinion is that the homeowners can change those lines in the Declaration. You realize of course, that the BOD would then be out of the chain-of-command as far as amending any of the documents. Don't seem like a very good plan to me. RichardD
MelissaP1 (Alabama)
Posts: 13,836
Posted:
Oh boy, I was thinking this would be a simpler question to answer... I think what everyone is trying to convey is that your members are trying to alter the backbones of the documentation. You don't really want to mess with the "structure" of the HOA. What your group is wanting is in real danger of doing this and really making things crumble.

I can't answer much as I am on my way to work. I just wanted to post in quickly. You have got to acknowledge that your HOA is also a mini-government as well as a corporation. The board members are like "senators" and the other members are the general membership. The general membershipe elect the board members from the pool of them. They are to represent the overall majority vote of the homeowners. They are to handle the daily business of the HOA and make sure it operates. Part of that may be ammending or changing rules. However, usually with input from the general membership they represent. The HOA is proposing to take away the rights of the board of ammending rules themselves and letting the general membership do it instead. Can you imagine the chaos?

It's okay for the board to change by-law rules. That's because the by-laws pertain more to the operations and daily guidelines of the HOA membership. The by-laws only pertain to the HOA membership. The CC&R's always trump them if in conflict. It's the CC&R's that the board shouldn't be able to ammend or change. They should take a majority of members votes as they effect the deed restrictions.

I don't see a problem with the board making changes to by-laws. It's the CC&R's they shouldn't.

Former HOA President
PaulM (Pennsylvania)
Posts: 1,347
Posted:
RichardD:
Your Declaration clearly states that it takes 65% vote of ALL homeowners (not just 67% of members at a duly held meeting w/quorum)--65% of 70 units is 46 members voting yes to amend.

The Declaration and Bylaws make reference that 'the Board may adopt and amend rules and regulations'. The R&R is the least authoritative document of all community documents. The R&R are created to confirm and expand what the Declaration and Bylaws already state but not to change the meaning--usually the R&R speak directly to architectural issues, and by this statement is giving the Board (in power) the authority to adopt and amend the R&R.

It is not unlikely that R&R can and should be reviewed/changed from time to time to stay abreast of new materials/products on the market and majority needs of the community.

RichardD (North Carolina)
Posts: 66
Posted:
MelissaP1 and PaulM. I support both your post and agree 100%. That's exactly how I interpret the documents, however we're still skirting the original question of: can the homeowners legally strike that line from the declaration? RogerB has stated that they can. I won't argue because I don't know what the answer is. I'll just add that the declaration makes other references to the powers of the Board to adopt and amend and it would seem to me that they would also have to be stricken. RichardD.
PaulM (Pennsylvania)
Posts: 1,347
Posted:
RichardD: I would ask, 'why do they want to strike that line'? and take it from there. It may be that they are fearful of the Board creating R&R in which they have not been consulted.

After the stated percentage of ALL unit owners to change the Declaration, yes, it is the Board who adopts and amends the document by officially recording the change/s.
hoatalk (California)
Posts: 603
Posted:
Richard, I believe Roger's comment about wasting time was simply referring to the fact that your declarations can't overrule state law. You can put anything you want in the docs (or remove anything) but the state law rules over them anyway. So removing the part that simply agrees with state law would not change the powers of the Board.

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GloriaM (North Carolina)
Posts: 829
Posted:
Richard:

Perhaps speaking with these 4 or 5 owners and informing them that even if the CCR's were amended it would not override the NC Planned Community Act, therefore a waste of the HOA funds to do so.
RogerB (Colorado)
Posts: 5,067
Posted:
Richard, posted that the BOD would not be out of the chain-of-command as far as amending the documents. Read my post again. The reason I stated this is a waste of time because you stated it is a state statute. So no matter what amendment is made to the CC&Rs and By-laws the state statute still overrules them.
RogerB (Colorado)
Posts: 5,067
Posted:
Correction to my post"
Richard, "I" posted that the BOD would not be out of the chain-of-command as far as amending the documents. The reason is because you stated it is a state statute. So no matter what amendment is made to the CC&Rs and By-laws the state statute still overrules them. So while you can amend the Board still has the authority so it is a waste of time.
RichardD (North Carolina)
Posts: 66
Posted:
Thanks RogerB for your last post and thanks to all the posters for a really good discussion. I feel like I just graduated from amendments 101.
I know there'll be more issues tomorrow, but I feel comfortable with todays lesson. RichardD

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