Changing CC&Rs and Rules....is this true?

Started by RodR • 17 replies • 722 views

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RodR (California)
Posts: 10

Posted:

Hi,
Our hoa documents allow CC&R and Rule changes only by 'majority of total voting power' of the residents. The board does not have authority to change CC&Rs or rules without a resident vote. This situation makes it extremely difficult to get any changes made (voter apathy, etc).
I was told that, instead of holding a resident 'vote by ballot' to make a change, an option is to create a petition and get 51%+ resident signatures in favor of the change. The petition becomes the actual 'vote'. To get the signatures will require lots of 'leg work' and fortitude by signature collectors, but in the end a change might have more of a chance with this approach.
Is it true that this type of petition can be done? I've read relevant sections of Davis Sterling, but can't find anything related to this.
thx

JohnC46 (South Carolina)
Posts: 14,265

Posted:

I should leave CA alone, but in SC we could make changes with a properly/legally drawn up petition. Our % required remains the same though and the petition has to be proper. It can be tricky.

SheliaH (Indiana)
Posts: 6,964

Posted:

You may have to run this through our association attorney to be certain, but if it's done properly, I don't see a problem. I've heard of HOAs taking all the steps to amend the CCRs without success (due to voter apathy), so the board went to court and asked the judge to approve the change, documenting everything they did to try and encourage people to vote, but few people did and the change is really necessary for whatever reason. I would think that would take considerable doing to get a judge to go along because he or she might say "apparently, your homeowners don't want this and I don't feel I should impose this change on them due to property owner rights, etc."

One way you may put this to the membership is to petition them to allow the board to make rule changes, but the CCRs would still require a homeowner vote. CCRs run with the land, so changing this is supposed to be sort of a big deal, which is why homeowner approval is usually required. On the other hand, rules are usually there to flesh out the CCRs - for example, the CCRs might say homeowners are responsible for paying assessments, but the board could enact rules on collection, like due dates, late fees, when an account is turned over to the attorney for collection, etc. You could even enact rules on how the board will go about changing rules, such as requiring a draft to be sent to the homeowners for review and comment.

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:

Sorry, Rod; you need to be more precise. What is the exact language in your CC&Rs about how to change them

What is the exact language in your documents about how to change Rules & Regulations?
Check Davis-stirling.com for more info on changing/adding/eliminating rules. It's possible you don't have complete or accurate info.

RodR (California)
Posts: 10

Posted:

Thanks for the replies.

KerryL1: the exact wording in the CC&Rs is:
"This declaration may be amended by the affirmative vote or written consent of a Majority of the Total Voting Power of the Association. Any amendment of the Declaration shall be signed and acknowledged by the duly authorized officer(s) of the Association and recorded in the Office of the El Dorado County Recorder. Notwithstanding, anything to the contrary in this Declaration, no amendment to this Declaration shall affect the rights of the holder of any deed of trust or mortgage recorded prior to the recordation of such amendment".

I've read relevant sections of Davis Sterling, but can't find anything that allows for a petition in lieu of a ballot vote.

Perhaps the section above that says "or written consent" means that a petition would be allowed?

thx

RoyalP
Posts: 1,104

Posted:

Quote:

Posted By RodR on 04/26/2019 8:24 AM
Thanks for the replies.

KerryL1: the exact wording in the CC&Rs is:
"This declaration may be amended by the affirmative vote or written consent of a Majority of the Total Voting Power of the Association. Any amendment of the Declaration shall be signed and acknowledged by the duly authorized officer(s) of the Association and recorded in the Office of the El Dorado County Recorder. Notwithstanding, anything to the contrary in this Declaration, no amendment to this Declaration shall affect the rights of the holder of any deed of trust or mortgage recorded prior to the recordation of such amendment".

I've read relevant sections of Davis Sterling, but can't find anything that allows for a petition in lieu of a ballot vote.

Perhaps the section above that says "or written consent" means that a petition would be allowed?

thx

To amend the CCRs requires a majority of the TOTAL membership, not just a majority of those voting, either at an election OR by written consent.

eg. 250 homes would require actual AYE votes from 126 members

CCRs contain RESTRICTIONS to private property and (generally) give the Board of Directors power to make Rules and Regulations (subject to state law) governing common property.

R&Rs may be promulgated as per the CCRs' 'delegated authority' or as per the bylaws' specifications.

KerryL1 (California)
Posts: 14,550

Posted:

Your Rules & Regulations, Rod. do you actually have any?? What is the name of that document?? Usually rules can be changed by the Board following certain procedures in CA.

You only cited how to change the CC&Rs. Is there a particular one you want to change??? Or do you want to amend or rewrite all of them? Look at the sort of Index at the front of your CC&Rs. Is there anything there about rules & regs? Ours in that place are called "governing documents," but no owners vote is needed to change them.

Are you sure you're not confusing rules & Regs with "Bylaws?"
There's something missing here....

RodR (California)
Posts: 10

Posted:

Thanks for your time Kerry. Yes, we have Bylaws, CC&Rs and Rules in our governing docs.

We'd like to change 1 item in the CC&Rs, and another item in the Rules.

The CC&R change:
old: The Association may spend up to $1500/yr on 'social activities'.
new: The Association may spend up to $2500/yr, with a yearly COLA adjustment, for 'social activities'.

The Rules change:
old: RVs are allowed to be parked on a resident's lot for a maximum of 24hrs before and after a trip.
new: RVs are allowed to be parked on a resident's lot for a maximum of 48hrs before and after a trip.

The text I provided in my last note is from the CC&Rs. It says that a 'vote or written consent' is required for a change of the CC&Rs. So for this CC&R change I'm trying to figure out if a signed petition (as it states w/ >51% of the residents voting in favor) will work. I'm beginning to think so.

For a Rules change, there is another section in the CC&Rs that cover this.
"Any Rules shall become effective and binding on all Owners only after adoption ny Owners representing 51% of a quorum at a meeting duly called for that purpose, or by written consent of the same percentage of Owners appended to a copy of the proposed Rules."
It also has the wording of 'vote or written consent' in it, just like for what is required for changing the CC&Rs.

So, if 'written consent' allows for a 'signed petition', then I have my (tentative) answer for both the CC&R and Rule changes, and I'll follow-up with the HOA's attny.

thoughts?
thx again
Rod

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Rod

51% of all owners is one amount. 51% of a Quorum could be quite a different amount. In our case:

112 of all owners so 51% is 57 or more owners agreeing.

20% of our owners (23) form a Quorum and 51% of 23 is 12 or more owners agreeing.

In one case it takes 57 in the other case it takes 12. Many confuse the two.

RodR (California)
Posts: 10

Posted:

Good point, thx.
Any thoughts on if a signed petition is as good as a 'vote'?

KerryL1 (California)
Posts: 14,550

Posted:

So, Rod, this is how you cage a rule: "Any Rules shall become effective and binding on all Owners only after adoption ny Owners representing 51% of a quorum at a meeting duly called for that purpose, or by written consent of the same percentage of Owners appended to a copy of the proposed Rules." So you do NOT need 51% of all Owners only 51% of a quorum. Now, you must find how many equals a quorum. this might be in your bylaws.

I find it very odd that a limit on social spending is in your CC&Rs. Are you sure that's where it it?? Can you cite the whole passage about social spending for us. Something's not right here and I don't know WHAT it is. I believe in CA CC&Rs only can be changed with a secret ballot--how to do such ballots is at davis-stirling.com. I don't think a petition would work. I'm thinking you need an HOA attorney's advice.

Is your HOA detached houses? Or condos? Or mobile homes, Or?? Are you on then board?

RodR (California)
Posts: 10

Posted:

I'm not on the board, but doing research for them. Our HOA is a 350 home gated development, private roads.

It is in the CC&Rs. The actual CC&R item reads:
"At the sole discretion of the Board, funds may be allocated for community social activities. Said funds shall not exceed $1500 per fiscal year."

As mentioned before, changes made to the CC&Rs require >51% of Total Voting Power in favor. Rule changes require only >51% of a quorum. The 'social activity' item falls under the CC&R change requirements

My main hope was to use a petition to gather enough 'votes' to make the changes, however the required numbers work out.

I will request that our board talk with our attorney. The "written consent" clause sounds like a "signed petition" to me.

Thanks for your help. I'll let you know what comes of it.

Rod

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By RodR on 04/26/2019 6:07 PM
Good point, thx.
Any thoughts on if a signed petition is as good as a 'vote'?

As said earlier. In SC we can use signed petitions instead of a vote. Last year we were considering a Covenant change so we discussed doing it via petition with our lawyer. He told us he could draw up a Petition Statement that would allow us to use signed petitions.

RodR (California)
Posts: 10

Posted:

Quote:

Posted By JohnC46 on 04/27/2019 5:52 AM

Posted By RodR on 04/26/2019 6:07 PM
Good point, thx.
Any thoughts on if a signed petition is as good as a 'vote'?

Thanks again!

KerryL1 (California)
Posts: 14,550

Posted:

You need to know about CA, Rod, and sorry to say I don't have time to look it up at davis-stirling.com to see if CC&Rs can be changed by some means other than secret ballots.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

ROD

From Davis Stirling:

Elections Requiring Secrecy. As required by Civil Code §5100(a), the following matters must be voted by secret ballot, regardless of any provision to the contrary in an association's governing documents:
◾special assessments over 5% (see exceptions) or regular assessments over 20% ( see Civ. Code §5605),
◾election and removal of directors,
◾amendments to the governing documents (see exception), and
◾grant of exclusive use of common area property (see exceptions).

Appears you cannot use signed petitions. The exceptions are removing illegal things like race, sexual references, etc. which the BOD alone can do.

KerryL1 (California)
Posts: 14,550

Posted:

Fine help for Rod, JohnC.

RodR (California)
Posts: 10

Posted:

Quote:

Posted By JohnC46 on 04/27/2019 11:40 AM
ROD

From Davis Stirling:

Elections Requiring Secrecy. As required by Civil Code §5100(a), the following matters must be voted by secret ballot, regardless of any provision to the contrary in an association's governing documents:
◾special assessments over 5% (see exceptions) or regular assessments over 20% ( see Civ. Code §5605),
◾election and removal of directors,
◾amendments to the governing documents (see exception), and
◾grant of exclusive use of common area property (see exceptions).

Appears you cannot use signed petitions. The exceptions are removing illegal things like race, sexual references, etc. which the BOD alone can do.

Thank you John! (and others too).
That was exactly what I was looking for.
Case closed.
Rod

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