Are changes to CCRs binding on existing lot owners or just new lot owners?

Our existing CCR's have provisions for modifications. I understand that the modifications do not come into effect until the modified CCR is recorded in our County Deed & Registar's office. My question is, are the changes retroactively enforceable on current lot owners or only upon lot owners who register their deed after the modifications are recorded?
Thanks in advance.
John Randle
President
Lovell Hills Homeowners Association
Knoxville, Tennessee

Posting rules prohibit using real names of HOAs - please be careful next time you post.

Depends what you are changing. But typically, when you get the appropriate number of votes from the membership, you put out a notice with an effective date. After that effective date, all owners must comply unless, as part of the change, you grandfathered something or other.

The recording of the CCR amendments is required. But, individual notice to each of the owners is also required.
Recording alone is not enough.

Very shocking, let's back up, JohnR. CC&Rs virtually always require that Owners vote to amend them, and often require a very high % of Owners' approval votes, e.g., 67%; 75%. Did your board have an attorney work on the amendments?

Can you give us the title of the Article in the new CC&Rs about amendments, and the exact wording? Something feels very wrong here.

John,

Typically, it applies to all at the time of recording.

If there is any grandfathering, that should have been in the language of the amended document (as grandfathering is not automatic).

Hopefully an attorney informed you about this prior to the vote taking place.

I agree.

John in TN

Who appoints this Planning Committee?

First of all I would like to express my sincere appreciation for the advice and comments offered so far on the site!!! I am obviously not a lawyer and generally rely on my common “country” sense in most questions of a legal nature. Further, due to the limited resources of the HOA, no attorney has been retained.

Secondly, a little more background that may be germane to the issue at hand. My (un-named :-}) HOA is a voluntary membership organization chartered by TN for the improvement of the health, welfare, and morale of its members through the furtherance of a sense of community. The HOA has 87 lots in question of which 59 hold membership at a cost of $24.00 per year per lot. The HOA hold title to no property, common or otherwise, in the subdivision. The HOA currently has ZERO CCR enforcement authority and relies on the local County ordinances to address significant issues.

The CCR’s in question were issued by the developer and reflect some 4 pages of “thou shall” and “thou shall not” mandates. The CCR’s provide for their modification by a “majority of the then owners of the lots vote to change said convenants in whole or in part” as well as by a developer appointed “Planning Committee” who has “the exclusive power and discretion to control and approve all of the buildings, structures, and other improvements on each building lot in the manner and to the extent set forth herein.” and has “the sole right (a) to amend these convenants and restrictions, but all such amendments shall conform to the general purposes and standards of the convenants and restrictions herein contained, (b) to amend these convenants and restrictions for the purpose of curing any ambiguity in any inconsistency between the provisions contained herein, (c) to include in any contract or deed or other instrument hereafter made any additional convenants and restrictions applicable to the said land which do not lower the standards of the convenants and restrictions herein contained, and (d) to release any building lot from any part of the convenants, and restrictions (including, without limiting the foregoing, building restriction lines and provisions hereof relating thereto) if the Planning Committee, in its sole judgement, determines that such release is reasonable and does not substantially affect any other building lot in an adverse manner.”

Enforcement of the CCR’s is specifically limited to “any other persons owning any real estate situated in said development or subdivision to prosecute any proceedings at law or in equity against the person or persons violating or attempting to violate any such convenants, and either to prevent him or them from so doing or to recover, damages or other dues for such violation.” It should be noted that the developer no longer owns any property in the subdivision. Further, it should be noted that my (un-named) HOA is not identified in the CCR’s.

The developer now appears to be desirous of relieving himself from further responsibilities and wishes to “pass the torch” for Planning Committee responsibilities to my HOA.

At this point in time I would question the developer’s authority to accomplish such a transfer as the HOA is not identified in the current CCR’s. While I acknowledge that the developer and his Planning Committee have a unilateral authority to change the CCR’s as they desire, as do a majority of the lot owners, I do not believe that the HOA is under any obligation to concede to such actions by the developer or his Planning Committee.

Should my HOA concede to accept the responsibilities of the Planning Committee, my original question boils down to “who is affected by any changes to the CCR’s promulgated by the Planning Committee (now HOA)”? Is it just new owners, or can such changes be enforced against lot owners who were not part of the modification process?
…
Again, any and all advice is appreciated.
--
John in TN

JohnR49, like you, I see zero legal authority for the developer to appoint the HOA as anything. Your volunteer HOA can accept whatever it wants, but from my reading, such an acceptance will lack any legal meaning. If the HOA foolishly tries to amend the CC&Rs per the section on this Planning Committee, I think it will be an illegal act.

As for all the other verbiage: This would not be the first time a developer put language into the covenants that made it more powerful than it actually is under common law (= court-made law).

I can see the developer amending the covenants to create a HOA. HOAs are such a big deal that I do not think this would withstand a court challenge.

They do not have authority to change the CC&Rs,'as they desire.' In the past, developers have gone off half-cocked and radically changed CC&Rs, only to have current residents of the developer's neighborhood defeat such changes in court.

The courts view covenants as a kind of contract. If the contract is changed in a radical way, the courts say, 'Foul. Not allowed.' Minor amendments made properly that are not radical changes are fine.

On whose land does your voluntary HOA install these lights? Who has the legal maintenance responsibility for these lights? If a bulb burns out and a kid is hit by a car as a result, will the voluntary members of the volunteer HOA be liable? (Maybe so.)

I am sure you and yours would like things to be casual and easy; happy and promoting harmony between neighbors. But this forum focuses mostly on mandatory HOAs and condominiums. For these mandatory HOAs and condominums, the liability concerns are massive. The mandatory HOAs and condominiums have liability insurance. Does your voluntary HOA have liability insurance? Are there any statutes in Tennessee that speak to voluntary HOAs?

Are you saying that the voluntary HOA asked the utility company to put up the lights, and the utility company agreed? If so, great. It sounds like the utility has legal responsibility for the lights. The only question I have is who is paying the electric bill. Else when it comes to voluntary HOAs, this is the sort of activity that makes sense to me. I grew up in a new development a buzillion years ago. It was not a HOA, but everyone in the development chipped in dues from time to time to maintain a sign at the entrance and at another point, to install trees in an orderly fashion up and down the street (said trees then became the lot owner's responsibility). Once in awhile they negotiated collectively with the city for xyz. It worked.

Hi John

I commend you for working to improve your community with such a limited budget.

And that's where my comprehension of your situation ends.

Your original post asked the question whether changes by a specially designated group could be enforced retroactively. Overwhelmingly, the responses you got said that, once it's out of the developers hands, it would take a vote of the members by a large margin to make changes to your CCRs.

Let's say I owned a house in your community and you said that I had to comply with the changes. What would happen if I said no way? Can you force me? Maybe. But you'd have to go to court for that - And you don't have the money for a lawyer. So where are you?

Also, what happens if I say ok - I don't want to be in your voluntary HOA anymore. I'm not paying any dues. Where are you then? Through the courts you could maybe force me to comply even after I quit, bu? then again you don't have the money to pursue it.

In your original post, you said that you were the prez of your HOA. Does that mean that this special group that the declarant used to have now reports to you or your BOD? Do they exist? Do they make decisions? Is the problem you're having that you're not getting cooperation from the members?

There's just something about this situation that I don't get. Would appreciate a deeper explanation - Maybe something that speaks of a real change that your HOA attempted to impose instead of polka-dot paint hypothetical.

Thanks.

JohnR

You posted:

The CCR’s in question were issued by the developer and reflect some 4 pages of “thou shall” and “thou shall not” mandates. The CCR’s provide for their modification by a “majority of the then owners of the lots vote to change said convenants in whole or in part” as well as by a developer appointed “Planning Committee” who has “the exclusive power and discretion to control and approve all of the buildings, structures, and other improvements on each building lot in the manner....

Once the Declarant/Developer has turned control over to the owners things in the Covenants concerning the Declarant/Developer are no longer applicable.

In the above bold it says how owners can modify the Covenants then it says they can be changed as well by the Developer appointed Planning. Committee. Well if no Developer, than no appointed Planning Committee. Many docs, my own included, are original and say all kinds of things about Declarant control. As we are owner run, we have to read through (ignore) those parts. It would cost about $2,500 for a Lawyer to rewrite our docs eliminating the Declarant references so we opted not to do such.

We had a good relationship with our Declarant. Prior to turnover, our Appointed BOD Advisory Committee got the developer to make some changes to our docs as he still had the power to do so. Have you considered doing such?

Thanks again to the many posters who have commented on my predicament.

First of all, I should note that the developer (who no longer owns any property in the subdivision) has not ceded control to the lot owners.

Secondly, for 7 of the 14 units in the subdivision, the developer incorporated a separate HOA, independent of mine, with a mandatory membership and annual assessments, to deal with modifications to property issues (e.g. the Planning Committee) and the maintenance of Common Property.

Thirdly, there are 3 units that were developed by the same developer that do not reference any HOA in their restrictions, leaving all adjudication issues to a Planning Committee headed by the developer. Any “enforcement” rights are delegated only to individual lot owners (i.e. the Planning Committee itself is not empowered to bring suit for violations).

Finally, there are another 4 units in the subdivision that were developed by a different developer that no longer have any Planning Committee to deal with modifications.

Yes, my HOA can be characterized as a “social club”, but it is also the only entity that currently addresses all 14 units in the subdivision and that may be the stimulus for the developer’s proposed actions.

The developer of 10 of the 14 units in the subdivision is now desirous of assigning to my HOA the Planning Committee responsibility and its enforcement responsibilities for the 10 units. The developer seems to realize that he has no authority over the 4 initial units that were developed by his predecessors, but which are still part of the defined subdivision.

While I question the developer’s authority to make such an assignment to my HOA, especially in the absence of any identification of my HOA in the current restrictions for 10 of the 14 units as well as the developer’s non-involvement in the incorporation of my HOA, I am trying to ascertain any potential impact of my HOA in its potentially new (and unwanted) role … should the developer proceed with modifying the current restrictions to reflect such an assignment.

Yes .. this sounds like a horse that was developed by a committee .. and it now resembles a camel.