HOA Full Docs review and revisal

Started by KP1 • 12 replies • 746 views

💬 Join us to post & get advice from 50,000 HOA & Condo leaders.

⚡ Takes 30 seconds

Already a member? Log in

KP1 (Colorado)
Posts: 73

Posted:

Just curious if anyone has done the undertaking of full Governing Docs review and revisal? Ours are archaic from 1985 and actually create obstacles, IMO.

No business or trade allowed in any unit, no exceptions but for rental/leases. Meaning no homeowner can have an in home business which in today's world and technology, seems pretty archaic.

They refer to all officers/board members as "he".

We still need approval/votes from our mortgage companies for Amendments.

Just to name a few.

Anyone care to share their experience of biting this large bullet and modernizing their Documents. I imagine it would be timely and costly as an attorney would be necessary?

Thanks,
KP

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Yes it can be bitten but off the top of my head at a cost of $5K to $10K if done properly as in by an attorney.

KerryL1 (California)
Posts: 14,550

Posted:

The cost will depend in part on the length & complexity of your current covenants. Ours, for instance, include articles & sections about3 reserves accounts and two areas that contribute to the Base budget, blah, blah, and they're 120 pages long. (High rise) We've started to have them rewritten a couple of times and then give up.

Your state laws will supersede yours inn some cases, so knowing CO law is important.

If your HOA is uncomplicated without a lot of amenities the cost for an attorney might not be moor than $2,500. Have your HOA attorney give you an estimate.

KerryL1 (California)
Posts: 14,550

Posted:

DouglasK1 (Florida)
Posts: 2,046

Posted:

Quote:

Posted By KP1 on 10/11/2018 10:53 AM

They refer to all officers/board members as "he".

When we amended our bylaws and CCRs a couple of years ago one of the board members wanted to gender neutralize them, he mentioned it to the attorney and she said there was really no legal value in doing that.

Escaped former treasurer and director of a self managed association.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

May I point out that personal home businesses aren't part of the restriction. It refers to someone as they say "Putting a shingle out". That means one can't run a doctor's office out of their home. Something that generates a nuisance like traffic or noise. An at-home business like selling things on Amazon or stay at home stock brokers, are not effected by this rule.

So before you go gung-ho on thinking rules are archaic or not necessary, understand the nature of the original rule. We only allow signs for "Sale/Lease". That is because allowing people to post other signs can cause clutter and political debate. Which political or college team debates can cause a lot of acrimonious feelings. Not a good thing.

If your going to update, then it should be more for technology reasons like "Green energy". Allowing solar panels or satellite dishes etc... Plus if you have any references to the old voting system or developer, remove them.

Yes, I would get a lawyer to assist. Not a Real estate one. Your not dealing with Real Estate. Your a non-profit Corporation. We were able to go door to door to make changes because we were required a special meeting to make the changes. That is impossible. So the lawyer drafted another form to give up your right to cast your vote at a special meeting. So people had to sign 2 documents to cast their vote.

I will tell you it took us 3 years and about 3 K. There is a filing fee at the court house. It can cost money to distribute copies too. Have to factor that in too.

Former HOA President

JohnC46 (South Carolina)
Posts: 14,265

Posted:

I agree with Mel. If one working a business from their home does not attract traffic (clients, delivery trucks, shingles, etc.) then no harm, no foul especially in the day and age of telecommuting from home.

GenoS (Florida)
Posts: 4,276

Posted:

Quote:

Posted By JohnC46 on 10/11/2018 11:09 AM
Yes it can be bitten but off the top of my head at a cost of $5K to $10K if done properly as in by an attorney.

I think it would be a lot more than that. We looked at a top-to-bottom revision to our governing documents and our attorney would not give us a firm quote. Our docs date from 1990 and are a real mess and very unsophisticated compared to other recorded documents I've seen. Example: the obligation to pay assessments appears in the Bylaws, not the CC&Rs. The common property the HOA is obligated to care for is listed in one very short paragraph, also in the Bylaws and not the CC&Rs.

I think a big part of that is the attorney could make a lot more money doing it one amendment at a time. Ex: we were charged over $3,500 for a re-write of our "no nuisance" section of the CC&Rs.

I wouldn't worry about the pronoun "he". That's the last thing I'd worry about. I wouldn't be willing to pay for PC.

KerryL1 (California)
Posts: 14,550

Posted:

Others make a good point. don't change them just to be gender neutral and don't worry about someone having a home office.

What of substance, KP, do you want to change? Make rental limitations? Or?

FredS7 (Arizona)
Posts: 927

Posted:

Quote:

Posted By DouglasK1 on 10/11/2018 3:15 PM

Posted By KP1 on 10/11/2018 10:53 AM

They refer to all officers/board members as "he".

If you take it to another attorney, I'm sure he will be happy to accommodate you and apply part of his fee to his boat.

KP1 (Colorado)
Posts: 73

Posted:

Here is the exact wording in our docs in speaking to the issue of trade and business:

9.1 Each Condominium unit shall be used for residential purposes only, and no trade or business of any kind may be carried therein. Lease or rental of a unit for lodging or residential purposes shall not be considered to be a violation of this covenant.

Trade verb
1.
buy and sell goods and services.
"middlemen trading in luxury goods"
synonyms: deal (in), buy and sell, traffic (in), market, merchandise, peddle, vend; More
2.
exchange (something) for something else, typically as a commercial transaction.
"they trade mud-shark livers for fish oil"

busi·ness
ˈbiznəs/Submit
noun
1.
a person's regular occupation, profession, or trade.
"she had to do a lot of smiling in her business"
synonyms: work, line of work, occupation, profession, career, employment, job, position; More
2.
the practice of making one's living by engaging in commerce.
"the world of business"
sync

I just don't see a lot of wiggle room in the wording used "no" and "of any kind". Seems pretty definitive to me.

Maybe the best approach is for a committee to be formed - review these docs and see how many Amendments they might wish to have in order to clarify or alter?

The voting rights is a definite issue as I believe it is one reason the Board has been reluctant to make Amendments - it's rather cumbersome to do so and the last attempt to make an Amendment in 2007 failed as the Board did not understand that they need to have Mortgage companies approval as well.

KP1 (Colorado)
Posts: 73

Posted:

Here is another with respect to lease/rental terms:

9.2 Lease of Condominium unit: Owners shall be prohibited from leasing their units for a term of less than a month........

Yet the current Rules and Regulations allow for leases/rents with a minimum period of 6 months.

In this case I believe the Covenants supersede the R & R's and make that 6 month moot. So if we wished to make 6 moths our minimum we would need to amend the Covenant. Am I correct or incorrect?

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By KP1 on 10/12/2018 5:44 AM
Here is another with respect to lease/rental terms:

9.2 Lease of Condominium unit: Owners shall be prohibited from leasing their units for a term of less than a month........

Yet the current Rules and Regulations allow for leases/rents with a minimum period of 6 months.

In this case I believe the Covenants supersede the R & R's and make that 6 month moot. So if we wished to make 6 moths our minimum we would need to amend the Covenant. Am I correct or incorrect?

You are correct. A rule cannot override a Covenant nor a Bylaw. To extend the minimum rental period beyond a month will require changing that Covenant.

🎯 You've read this entire discussion

Join the conversation with 50,000 HOA & Condo Leaders:

✓ Ask follow-up questions
✓ Share your experience
✓ Get expert advice
✓ Access 350,000 discussions

Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in here