Association Bylaw Interpretation

Hi,

First time poster. Members of our association have a disagreement regarding the interpretation of a bylaw and i thought i would post that here and get some opinions. Recently our BOD entered into a lease agreement with a food service management company. The lease agreement is for 2 of the HOA's 3 restaurants. Some argue that our bylaws prohibit the leasing of an asset based on the following:

The board may not enter into any obligation or dispose of any asset that exceeds in value five percent (5%) of that fiscal year's approved annual budget excluding capital items without obtaining the agreement of the membership either at the annual meeting or at a special meeting called in accordance with section 4.4.

Others argue the decision does not violate the bylaw. Here is the relevant financial information:

Annual Operating Budget (including capital) $5.4 million
Asset value being leased More than $365,000

Thoughts?

Each of the restaurants are separate assets so each lease probably falls below the 5% threshold. I guess I'd ask what the objections are? HOA's historically fail miserably at running restaurants.

-- It is not clear to me whether the phrase, "that exceeds in value five percent (5%)... " modifies "obligation" or not. Arguendo, let's assume it does. An "obligation" here appears to be something like, "a legal duty to perform or to not perform some action. A binding, formal arrangement or an agreement to a liability to pay a specified amount or to do a certain thing for a person or group of persons. See also duty and liability." A lease here is an arrangement to provide restaurant space. How much rent is being paid? Also, you posted the budget "including capital." The Bylaw says to exclude capital items for this calculation.