CCR Termination vs. Amendments

After 20 years, our CCR's may be amended by 67% approval (of all owners), but any covenant may be *terminated* with only a 51% approval (much easier to obtain).

We're wanting to change "No Sheds" clause into "No Sheds, except for ones that comply with these specs: ...". And so we're terminating the prohibition against Sheds of a certain type.

Most HOA's would interpret this as an "amendment", but we're going to more appropriately frame this as a "termination" so that we can pass it with 51% vote instead of 67%.

Keep in mind that with 51% vote, we could allow ALL SHEDS. So it wouldn't make sense to require 67% vote to allow SOME SHEDS (making a smaller change).

Here is a draft of the wording we may use:
==
Termination #1 - Sheds:
Section 8 of the CCR's reads: "No trailers, shacks, outhouses or detached or unenclosed storage sheds, tool sheds or accessory buildings of any kind shall be erected..."

Termination:
Section 8 shall not prohibit the erection of sheds which comply with all of the following specs:
- Less than 150 sqFt. (e.g. 10’x15’)
- Shorter than 10’ in height at peak.
- Constructed of wood or high quality non-fading resin with steel framing.
- If wooden, must be painted and shingled to match the associated home.
- Is subjected to approval or disapproval by the Architecture Review Committee (ARC).
- Shall be well-maintained, per discretion of the ARC.
===

By appropriately framing this as a "termination", instead of an "amendment", we can thereby pass this termination with only 51% vote.

More Detail:
- Our HOA is lazy; we can typically only get 2/3rds of the people to respond, and the other 1/3rd simply refuse to sign anything or even consider anything to do with the HOA (they don't vote either way). That makes it near impossible to get 67% vote, while getting 51% is more than three-times as easy to do for us.
- 90% of those who responded to a poll are in favor of sheds. I don't foresee anyone rising up to challenge these "terminations" once filed, and put into force.

Questions:
1. Does anyone see a problem with us calling this a "termination" instead of an "amendment"? We aren't looking for bulletproof; we simply want to get these terminations documented and recorded, so that we can move on safely with construction of new sheds.
2. Has anyone here ever dealt with voting to terminate clauses from their CCR's?

Keep in mind that we are not amending current shed specs to be more strict. We are simply "terminating the prohibition of some sheds"... this is a relaxing change, but just not as drastic as full termination of the whole clause. It would not be appropriate for a lesser-relaxation to require more votes than a full-termination, right?

We're not concerned about this being bulletproof. Just wanting to make sure it's a "reasonable argument" so that we can execute it and record it; that'll suffice for our lax HOA. We believe the argument in favor of viewing these modifications as "terminations" is very strong and logically appropriate. And we believe it is very inappropriate to make "lesser terminations" require more votes than "full terminations", don't you?

The confusion is only caused by thinking in simple terms. You can say "but you aren't just removing a word". You have to view our termination for what is it -- we're terminating the prohibition of certain compliant sheds, while keeping the prohibition on all non-complaint sheds. Previously, ALL SHEDS are prohibited. Now, only SOME SHEDS are prohibited.

AugistinD, I'm not so concerned about what a judge might say, although a reasonable/smart judge would have to rule in our favor, due to the spirit of the change we're making. But it's 99% likely that this will never come before a judge. We're in a HOA now where many of our covenants are already ignored. We just want to make it official/recorded. We're a median-wage neighborhood, with home prices slightly below the median price for all homes sold in the area. Our HOA is very lax, and not likely to become more strict in the future.

The current result is "chaos" as the Board exerts their right of "non-enforcement", and so fewer and fewer of our covenants become enforced. Our entire CCR's document loses it's meaning. This is true chaos, and at same time dangerous, as we're susceptible to having a future zealous board taking the helm and trying to "undo the damage" and might tell folks to tear down their sheds, etc. Achieving a partial termination would bring order/safety, that we may not otherwise achieve.

So we plan to simply "terminate" the prohibition of certain sheds, while maintaining the prohibition of all other sheds. It's a partial termination, in truth.

67% approval for amendments that *add* restrictions (make things stricter) makes 100% sense. Changes that in effect only partially terminate a current covenant should rightfully be viewed (by all judges and people) as terminations, not amendments.

I believe the reason this isn't the convention is that people are confused by surface appearance, i.e. we are "adding words" which by default looks like an amendment. But in this case, it's just a termination; and because it's only "partial", it requires words to define it. Think of it only as the "Adding of words to define a termination." Because this isn't even a stretch... it's the truth of what is happening here.

==
QUESTION: If our CCR's were worded as:
"The following types of sheds are prohibited: Wooden/shingled/matching sheds, and all sheds that aren't wooden/shingled/matching".

And all we did was remove the first clause "Wooden/shingled/matching" words, so that it read:
"The following types of sheds are prohibited: all sheds that aren't wooden/shingled/matching".

Then would you be OK with calling this a termination? (since all we did was remove a few words)

You want to go from no sheds allowed to some sheds allowed. If I were judge, I would rule that this is an amendment and would require a 67% vote. Maybe take a poll here to help your decision-making.

Judges do not rule based on "spirit of the change."

In complete seriousness, if the latter is so, go ahead and do whatever. Nationwide HOA Boards break the law all the time. Few try to litigate. No kidding: I am completely serious.

Nationwide many HOA Declarations say that the HOA has the right not to enforce xyz. Instead and according to the Declaration, a HOA member seeing a violation by another neighbor may file in court against the other neighbor. However nationwide and in general, the courts typically have found this part of Declarations to be contractually not allowed. In other words, HOAs are in fact required to enforce covenants and under certain conditions, may be sued for a failure to enforce. A HOA where I used to live tried what you are proposing and got busted in court for it. The HOA lost. The member wanting the HOA to enforce the covenants won. Cost a lot of money. (And by way of disclosure, I was on the wrong side of this. Years have gone by and I have read more. Now I understand the court's reasoning.)

[for brevity, snip discussion of re-defining termination. It does not change my position.]
No I would not. It's a big deal to go from no sheds allowed to some sheds allowed. AFAIC 67% is the magic number. To be disgustingly pedantic, the removal of a single comma in some legal documents can change things drastically.

Your HOA should at least attempt a massive campaign to achieve the 67%

Else I agree with PaulJ6. Who knows -- maybe you can get a HOA attorney to agree with you.

Amendment.

It would be a termination if you completed deleted all mention of sheds.

There are no such laws anywhere in the nation. The suggestion was made by the experienced people here because they know the board's liability diminishes when it gets expert opinions. If you feel you are expert in law, proceed post-haste.

The above is just your latest misconception. Nationwide it is not state attorney generals who enforce compliance with covenants. It is civil courts.

Now the Attorney General can get involved, as your HOA board may be perpetrating criminal fraud.

Which you do not find compelling. I see.

For this to be settled in civil court would require someone to hire a lawyer with their own funds. There isn't that kind of money in our neighborhood, and surely not over a questionable/justified action of the Board.

So for our neighborhood, most likely, the only viable recourse is AG initiated action, because there isn't anyone with money here to spend on their own attorney.

Filing this as a termination would not be fraud, when in fact, we can logically PROVE that all we are accomplishing here is a form of "termination". It would only be fraud if someone could show that what we did here was anything other than a form of termination. Our defense is simple: "There once was a restriction on wooden/shingled/matching sheds; now there is not. That is a termination of a restriction."

If needed, we'll likely keep searching until we find an attorney who will sign off on this, for the reasons that you stated regarding indemnification. I'm optimistic that we'll find one, because our argument is sound/accurate.

Hmmm. Nope, comes up the same in my head.

Amendment.

Not a termination.

The Woodington HOA described here sounds about like our HOA for the last 10 years. I have on record my requests to them for minutes, records, etc, repeatedly, without any response. Sure we could have sued them, but who does that? And here in Indiana, you can't sue outright, now you have to follow a "Grievance Claim" process first.

And so what did we do? Did we sue? No, instead we took over the HOA ourselves by getting elected. As it should be. That's how HOA's are designed; majority rule. The majority shall elect leaders that are aligned with the majority (in general, unless unpopular boards hold onto the power via various abusive means).

It would take a lowly person to file a Grievance Claim against a board action which is logically justified 100%, and also garners the support of the vast majority (of those who care enough to vote).

Keep in mind that to get 51% of the vote, you really need about 75% of the vote among those who care enough to vote. That's how it is here.

I don't think it's right to live your life according to "fear of rare things that happened to someone once". Statistically, what happened in Woodington is a very rare spectacle. And the things they were sued over have nothing to do with us. For decades, our HOA has run things in a way that could be deserving of lawsuits -- yet there were none. Where an unpopular board did things without caring about majority support; but since our HOA is lazy in general, although people didn't like them, no one wanted to run for the Board. They were too apathetic.

In my best judgement, the risks here are very low. And recent HOA Act of 2015, actually was written to prevent things from happening like this (abundance of petty costly lawsuits). And the AG here, has only taken one action against a HOA in the last 3 years here in Indiana - and there are 4800 HOA's here.

So we may be faced with the lesser of two evils, if Plan A doesn't work out (i.e. we can only get 51% vote):
1. We either file this as a "termination" so that people can build their sheds.
or
2. We just allow people to build their sheds anyways, despite the restriction, since 90% of those polled are in support of sheds!
or
3. We enforce the "no sheds" covenant (with lawsuits!) despite there only being 10% of us still wanting to enforce no sheds.

Which is worse?
So far, we're stuck between #2 and #3. We have a number of small resin sheds now, because at least if there was a lawsuit, the person could just take it down easily. And we aren't stopping them. No is or has.

So we either continue to let this violation increase, or we start filing lawsuits!...

So to me, I think #1 is the lesser of the evils, and will function correctly. I'm 99% sure it won't be challenged in the courts, and even if it was, I think it would stand, since in truth, this really is just a termination that we're dealing with. And if it is challenged, then we'll just have to re-run the amendment process, and push harder to get 67%.... problem solved.

Or it's reversed, but since 90% of us want sheds, we'll just continue to elect Board members who won't enforce this restriction. Eventually, maybe we'll get the 67% vote.

We're living in an imperfect world, and when it comes to legal compliance, statistically, HOA's are probably more guilty than most entities.

But in this case, if we filed this as a termination - we're still guilty of nothing. It's an appropriate way to frame these changes -- terminations. Simple as that. More HOA's should follow suit, because it's logically appropriate to view it this way.

AugistinD - To answer your baited question "what if majority voted to disallow people based on race or religion?"
This is not a pertinent question. This question would be like "adding a new restriction" not "failing to enforce an existing restriction". The "Right of Non-Enforcement" doesn't permit you to "enforce new things", but rather to simply NOT enforce a covenant. So the fact that you think this question is relevant to my argument either indicates that you don't understand my argument, or you aren't great at logic. Logically, your question is not pertinent to this discussion, and does nothing to make your argument.

I have never suggested that the Board can enforce MORE than what is written; only that they have the right to enforce LESS.

I also realize there are restrictions here too. We do have some responsibilities as a neighborhood that must be lived up to. And that covenants that are enforced, have to be done so uniformly, etc, etc.

But when it comes to "sheds" - the government just doesn't care at all about this. The changes we have in mind, are 100% off the gov't radar. They are trivial matters of "taste/aesthetics".

We too are "bound by covenants", but part of those covenants adamantly declare that the board has the "right of non-enforcement" which means that if you can't amend the documents, you can at least elect board members who won't enforce certain unpopular restrictions -- and everyone (including the gov't) will be 100% fine with it. The recourse for those who want it otherwise is to "get elected with like-minded buddies". Nothing else really makes sense. And California is a poster-child for "how things should NOT be done", especially with regard to HOA's, IMO.

I'm not going to approve or support any of this. If you're going to do it, do it, but I'm not weighing in any more.

PaulJ6 is a good soul.

I have posted here with several objectives:
1. Test out the proposal, and learn how people react to it. (note to self - by default, not so good, it seems)
2. See if there are any listeners out there who have seen this approach work.
3. At least determine if folks are at least "empathetic" (e.g. "I see your point." or "Things should probably work that way, even if they currently don't.")

Paving paths less-traveled-by is a difficult thing.

So it's important to me to know if this less-traveled (or never-traveled?) path is a conceptually "right idea" (morally speaking).

Just because *current* thinking might say "no, that's an amendment" doesn't mean *future* thought will follow-suit. This is how change happens.

The question is, is there truly any good moral/logical reason that a "partial termination" should treated strictly as an amendment, vs. treating is as a termination?

Just think about the implications of current thought. Current thought concludes that it should be easier to terminate the WHOLE restriction, vs. just terminating PART of it, which is *less* of a change. Why make it harder to do something that is "less of a change"? A partial termination is still a termination. Why not treat them the same?

The courts should treat them the same, if they don't already. This is appropriate logic and makes the most sense.

Anyhow -- we'll hopefully achieve Plan A (67%), but if we don't, I'm not afraid to pave a new path -- a path the I strongly believe others should be following. It's an ethical smart path, IMO.

Just because it's out-of-the-norm, don't mistake that for "unethical", or "fraudulent", etc. This is one way innovation occurs...

Well then lobby for amending the governing documents to allowing amendments via a 50+% vote of the membership. Else you are not following the law. Clearly you can live with the latter in this instance of sheds vs. no sheds.



The reason I disagree is because everyone who buys into a HOA goes in with eyes wide open about what the contract (covenants) are.

I have found the solution to enforcing unpopular restrictions is to wait until someone complains and then have the person document massively. This is a general requirement at the HOAs and condos I have seen.

Thanks for explaining you get that 'majority rule' as a logical matter is not always appropriate.

Likewise AugustineD, you wrote: "Else you are not following the law."

Here again, by who's definition of "termination"? Where is this magic Bible that tells us explicitly what defines which changes are to be classified as terminations?

Many simply are "counting words", but are ignoring the net impact of the change.

I argue strongly that the "net impact" is by far the most important thing to consider here. If the net impact is a "partial termination", then it's a termination.

The counter-argument is flimsy and flawed, IMO.

And the final litmus test, is that my argument leads to a more sane/logic/appropriate conclusion -- which is that partial terminations aren't any harder to pass than a full termination. Which is "as it should be", no?

The courts parse the meaning of words all the time. They even draw on authorities on grammar and the like. Your arguments might persuade a judge that the covenant for terminating vs. the covenant for amending is logically inconsistent. Or if you prefer, that "terminating" is a loaded word with many meanings. (What word isn't?) But if I were judge, then based on my reading of case law where covenants are thrown out by courts, I would be looking for "unfair and unreasonable." Are these covenants, taken together or taken by themselves, unfair and unreasonable? Right now I am not persuaded they are in all instances. To throw them out requires them to be uniformly unfair and unreasonable. As judge, I would fall back on the reality that these covenants are contractual terms to which all agreed prior to buying. If a member filed suit against your HOA for implementing what you want (re the sheds) via a simple majority vote, I would rule for the member, because 'a deal's a deal.'

AugustinD gives superb advice--consistently well-reasoned. I wouldn't disregard it.

The times when AugustinD and I have thought differently about things, it's just a friendly discussion- I respect his posts very much.

Brian,

Let us know how it goes?

At first I thought this might be your best counter-argument. At least it differentiates more meaningfully a simple termination from a partial termination. The partial termination can imply "more work for the board" since now the ARC has to approve of sheds. But then I thought more about this... the ByLaws have the power to incur a lot more work on the Board too, but this document, for us can be modified by 6% approval! (majority of a 10% quorum) So if it's a concern about Board work-load, then why are the ByLaws so easy to change? Shouldn't anything that can incur more workload for the board be approved by 67%? But it's not.

Clearly, the rationale behind the 51% vs 67% has little-to-nothing to do with concerns over board work load. Besides, the covenants never force a board to do this workload, as the board is still able to fully ignore this restriction if they want. So this argument is still weak at best.

When it comes down to it, the only real reason a judge (or people) seem to view my "partial terminations" as "amendments" is due to convention, not logic. They see the "many words" and so on the surface "it looks like an amendment", and so naturally they just label it an "amendment", but in truth it is only a "termination" (logically). The logical truth here is more important than the "surface appearance", or at least it should be. Hopefully a judge, who is supposed to be very strong on "logic" would put more weight onto the "Logical truth".

I'll probably keep arguing here even without contenders, because I'm obsessive like that.

Please consider the other realistic alternatives here. Say we can only obtain 66% signatures, and no matter how hard we try, can't get the last 1%. And so an amendment to allow sheds fail.

Then look at the full scenario. Out of 100 homes, only 70 would vote. The other 30 are unreachable, and consider our communications spam, or simply call themselves "switzerland" and won't vote. So we obtain 66 affirmative votes out of the 70 that voted. But the termination fails because we refuse to call it a termination. Of those that voted, only 6% want to prohibit all sheds, and 94% want sheds.

What's the end result? We say "screw it, build your sheds; we're not enforcing this covenant", because Section 12.1 declares our right to "non-enforcement". Since sheds are so widely supported by those who vote, we can safely assume that our sheds won't be at risk in the future either.

The end result? Lawlessness; more restrictions ignored.

And we don't bother to attempt another amendment process, because heck, we're building sheds already, so what's the point? And besides, the last effort was arduous and disappointing. No one wants to go through that again.

Is that situation better or worse than the one where our 66% vote results in "approved partial termination" and thus it's now official that you can build sheds that match this spec -- and we can enforce the restriction against sheds that don't match the spec. Now we're not ignoring covenants! Much better.

All this is achieved by following fully rational (yet currently unconventional) logic. And it just makes sense. If you achieve 51% vote, then in truth, you have closer to 75% support from those who vote. And thus, you can assume that if you didn't approve this termination, the restriction won't get enforced anyways!... (only 25% want it)... And so it only makes sense that "partial terminations" be treated the same as "full terminations".

If we instead follow conventional logic, the outcome is far worse -- lawlessness in many cases, or just 75% of the people not getting what they want due, and having 25% opinion preside. Less happiness to go around. Congratulations to conventional logic.

The end. The only other alternative is to amend the CC&Rs to reduce the percentage required for an amendment. Of course, that amendment must attain the original percentage of votes in order to approve the reduction. We did that here some years back.

You've got to consider that maybe you can't get the 67% because at least a third of the owners really don't want to see any sheds in the community.

That's just not the case here. I know this for a fact, and can feed you details, but I'm done ranting here.

I think I've heard what I needed to hear here. I'll post back after we achieve a victory or loss.

I believe Florida is notorious for having more gov't rules than most states for HOA's right? You are from Florida, so maybe your views are just skewed by your locale, when making a judgement for how things will go here in Indiana.

Here in Indiana, my experience is that HOA boards "do what they want to do" and so long as it isn't too terrible, no one will ever consider filing a lawsuit to stop them. For example, our board, for many years was "non-transparent", omitted key things from the end-of-year spending reports, and would not provide hardly any required information to HOA members at their request. For a year, my requests for info went unanswered. Rather than sue, I decided that we'd just usurp the board, and take over. And that's what we did. That's how it's done here in Indiana; don't like the board? Vote them out. And we did so with a 5:1 landslide victory. I have the popular support from our neighbors already. 54% of our neighbors actually gave me their proxy to oust the previous board members. They would have done it sooner, but no one really wanted to be on the board! I recruited 2 others, and we swept the board clean.

I don't think the character of our HOA will change by much. As always, I would expect that a board with majority support (that's us) would be able to conduct things in a fashion that we could easily/logically justify to a judge, and to the rest of the HOA. There is no wrongdoing in framing terminations as terminations. Even if a judge were to overturn these terminations at a later date, there will be no convictions here of wrongdoing, especially if we find a lawyer who will sign off on it. And the likelihood of someone filing a lawsuit to challenge it is near-zero.

I'd be very surprised if your prediction "gonna lose" is correct.

(OK, so I couldn't hold off.)

If what you say happened, that too would be no big deal. First off, if you are right, no one would challenge it, because if they did challenge it would be to RESTORE the full covenant, not to terminate it... and so a challenge would be counter-productive. So there would be no risk of challenge.

Moving ahead still, if you are right, full termination of this covenant-- here again, this doesn't really allow ALL SHEDS. Why? Because of the ARC -- all new construction is subjected to ARC approval, and they can simply document the specs for which sheds are acceptable, and which ones are not. Although ARC specs are fickle and can change year-to-year without ANY vote -- it's totally up to the ARC. Silly how that works, isn't it?

The whole concept of ARC in our HOA is a bit silly. We give full decision-making power to two random like-minded ARC members, who get to say yes or no to what you do with your house. These two ARC members are often just "elected by default" (since nobody wants to be on the board, typically). Why so much power given to just two people? It's dangerous, and not really appropriate for many cases.

Anyhow -- just sayin', I don't think I agree with your logic.

Nonetheless, can you provide specifics where a judge made something like this happen? ("termination" said "allow wooden/shingled sheds" and the judge says, "well that means we're going to allow ALL sheds") I just don't see how a rationale judge could arrive at that conclusion -- what is the logic? Wouldn't the judge instead say "no, I think that constitutes an amendment, and so I simply reject it, and restore the covenants to original state."

Do you have any examples of real cases that back up your logic? It sounds unreal to me.

The defense of laches applies to failure to enforce.

Termination means to remove. Hence, the 51% can only be used to terminate a covenant (per your posting).

Amending means to change.

Your situation is the only one I have heard of. All other covenants I have read only have requirements for amending.
Therefore, I doubt I would find court cases. However, standard contract law should apply. These are the terms of the contract. The Board exceeded their authority (ultra vires) by amending with only 51%. If challenged, I gave you a potential outcome. Until challenged, and all appeals exhausted or all money spent, no one really knows what a ruling would be.

You asked for opinions.
I provided one.
If you were shopping for answers (looking for a specific answer to support your theory), I didn't agree with your thinking.
Take it, leave it, doesn't matter either way.