Governing Document Modification Costs

We apparently got a bargain, we paid $1000 for 2 changes to the bylaws and several to the CCRs. We mostly drafted them ahead of time and the attorney revised a bit.

I don't know of any legal requirement that an attorney be involved, but if the changes are ever challenged, they probably have a better chance of being found valid if somebody with legal expertise has reviewed than if they are just written by board members who attempt pseudo legalize.

Our Bylaw document only requires a board vote. Our DCCR requires a membership vote.

We amended our By-laws a couple of years ago. It was a simple amendment changing the qualifications for membership on the board of directors to require that a board member be a member of the association (a property owner listed on the deed). When the HOA was under developer control, for obvious reasons a director did not have to be a property owner.

In order to amend, our By-laws required a majority affirmative vote by the members at a meeting, so we waited for the annual meeting, and put it to the members at that meeting.

We wrote the amendment ourselves and filed the amendment with the County.

Why, Chris, don't you want an annual audit?

We're a small sub-association and an audit is a huge expense for us. Our plan is to adhere to the Florida statutes, which I believe only requires a financial review for an association our size.

I wish you luck. We had a committee last year that had several meetings to discuss and propose amendments to our governing documents that are 30 years old. We also wanted to establish some sort of expectation regarding legal costs and were blown out of the water when we got a $3,800 bill from the attorney for his review of a 2-paragraph change to our nuisance restrictions. That put the kibosh on our efforts since we were considering more than a dozen changes, each of which was more complicated than our nuisance clause. We didn't have $100,000 for attorney fees so we gave up. The nuisance restriction amendment was a "trial run" for us to see what the attorney's review would cost us. Before we started we had spoken to the attorney and he absolutely 100% would not even give us a ballpark estimate for how much it was likely to cost.

Your documents themselves should say what's required to amend them. Typically the board and some percentage of owners will need to approve the amendments. As of July 1 in Florida, amendments do not become effective until they're recorded with the county's official records.

So, it seems there is significant variability with legal costs associated with making document changes. Perhaps the best course of action is to get quotes from other HOA attorneys for a specific scope of work.

Just to clarify, are there any particular legal requirements that require an attorney to sign off on any governing document changes, or with filing the new document version with the county? I've combed through the Florida 720 Statutes and don't see anything particular.

For clarification: a board (in FL) on its own vote can decide to go with the statutory level of financial review or MORE stringent, e.g., vote for an audited financial when a compiled is required; however, it requires a vote of the membership to proceed with a financial review LESS stringent than statute, e.g., compiled financial statement when statute requires a reviewed financial.

Thanks, George. That's basically what I'm looking for. We just want to make a simple change for now, vote on it, and record the modified document. Somehow, our attorney wants $3000 to do that for us. If we can legally complete this process without our attorney, we would prefer to do that.

I know you are looking to update your Bylaws, but of more importance, make sure the same language is not in your CCRs, as it is in many instances. CCR's have more authority and if there is a conflict between the two, the CCRs will prevail.

I think there is significant variability in costs. There was a column/blog written by a Florida attorney (not ours) last year and the question asked was, "How much will an amendment cost us?" The attorney responded that minor amendments could be done for a few hundred dollars and a significant and complex amendment might cost as much as "several thousand dollars". Then we got our several-thousand-dollar bill for a very minor change. I have no doubt there are attorneys out there who would have charged us a lot less. The trick is finding one.

Item number 4 on this page notes that drafting amendments and certificates of amendment for recordation constitutes UPL in Florida. The Unlicensed Practice of Law. Any amendment to any document that affects the rights of owners has to be done by a licensed attorney. An internet search about HOA documents and UPL will turn up a lot of things you might want to look at.

The most galling thing about our $3,800 amendment is that it was so simple we wrote the language ourselves and the attorney changed 2 words and added one short sentence. $3,800 please. Imagine what it would cost to have him re-write the Indemnification section of our CC&Rs!

All this UPL stuff in Florida has the aroma of collusion between the Florida Bar and the Florida Judiciary in order to protect the income of lawyers. Some feel that if you're writing the amendments yourself and not charging anyone for the work then you're not "practicing law", and that the prohibition was mainly written to get management companies to stop drafting amendments and charging for the work. Arguably there are management companies who are more familiar with Florida law than some attorneys. There's still some gray area there. On some things I'd absolutely want an attorney's involvement when it comes to the rights of the members. On the other hand there are simple things that don't affect anyone's rights and to me it's a ridiculous money-grabbing proposition to force associations to pay attorneys for.