Cost to amend CCR's, Bylaws?

Started by AdamL1 • 15 replies • 1055 views

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AdamL1 (UnitedStates)
Posts: 559

Posted:

Curious if anyone's been through the process. Wondering, in general, how much a lawyer bill would be to update CCR's? Draft the amendments, prepare communications to membership, file official document with county, etc

MelissaP1 (Alabama)
Posts: 13,836

Posted:

There are filing fees at the courthouse. Ours were $750 to file. Lawyer expenses vary. Think it was 2K for those. You then have expense of distribution of the new changes if choose. Not just that but postage for notices etc ..

I would say about 5 - 7K for full changes and several months of work

Former HOA President

JohnP47 (Washington)
Posts: 31

Posted:

Hi, I live in WA state, King County. We had an attorney on our board who started the process by researching and drafting our declaration amendment. We then engaged our official attorney who tweaked the wording. Tweaking wording is sometimes a lot faster (cheaper because fewer billable hours) than turning the drafting over the paid attorney at the start.

I'll mention before going further, that anyone can draft a document to get matters started.

The amendment was to limit the number of units any owner could hold in our small condo (under 15 units) to 2. At the time of the vote we had 11 units owned by people, and 1 owned by an LLC. We were concerned as units opened for sale that the LLC was bidding on them and might eventually get enough units to dominate the board and force the rest of us dance to their tune. The final vote was 11 approved, 0 opposed, 1 abstain (the LLC). So it passed by a sound margin.

So with the vote approved and minuted, we sent it back to the lawyer for filing with the county. Total costs were about $2,000.

JohnP47 (Washington)
Posts: 31

Posted:

Re-reading your original post, I see you are going for a full re-do of the CCRs. In our condo, that would be a very contentious process as the absent owners are getting a great deal (the live-here owners basically work for free for their profit-making rental business, plus they don't do any of the daily work needed with keeping a building clean and safe).

There's also a seeming willful ignorance among many of the owners about the basic legal requirements for this type of property ownership. Opening up a discussion on changes would not be very clear-cut as they would argue like mad without the lawyer present and clam up when they could ask the lawyer directly and get their questions addressed. The lawyer would have to do a lot of basic ed, and that's time, and that's a bill, and that's a cost.

Would amending specific part of the CCRs in one round serve, or are they so out of date you have to scrap them and start fresh?

SheliaH (Indiana)
Posts: 6,964

Posted:

Quote:

Posted By JohnP47 on 12/13/2021 10:04 AM
Re-reading your original post, I see you are going for a full re-do of the CCRs. In our condo, that would be a very contentious process as the absent owners are getting a great deal (the live-here owners basically work for free for their profit-making rental business, plus they don't do any of the daily work needed with keeping a building clean and safe).

There's also a seeming willful ignorance among many of the owners about the basic legal requirements for this type of property ownership. Opening up a discussion on changes would not be very clear-cut as they would argue like mad without the lawyer present and clam up when they could ask the lawyer directly and get their questions addressed. The lawyer would have to do a lot of basic ed, and that's time, and that's a bill, and that's a cost.

Would amending specific part of the CCRs in one round serve, or are they so out of date you have to scrap them and start fresh?

Yup. My community was working on this before I moved in and after about 4 years of work, the most we could do was up get the Bylaws updated. The sticking point and the primary reason for trying to update the CCRs was to put in a rental restriction. Unfortunately we had too many owner/landlords like your community, and even a grandfather clause prompted them to say nyet, even with our attorney attending one meeting and explaining how it would work! This is also why I REALLY dislike owner/landlords - not the ones who may be doing it to pay the bills until the unit is sold because they moved or the house belonged to a now deceased owner, but these folks who treat the community like a pseudo apartment complex.

We haven't tried it since (too much has gone on since then), but I think the best way to begin is to ask the attorney what his/her experience has been with other HOA clients. That'll give you a ballpark as to much much you might end up spending and how long it'll take. He/she might be able to refer you to those clients so you talk about their experiences and learn what worked and what completely fell apart.

If you want to move forward, it could be easier to start with having the attorney look at the documents to see what stuff is totally out of step with current state law and/or still has language referring to the developer and getting rid of that. Then poll the homeowners to see what CCRs are totally confusing, outdated, or may require some tweaking. If you can identity the most obnoxious areas, you may want to work on those first and get them updated or do the easy stuff and work towards the more difficult. In the meantime, educate the people on why this is being done and the advantages in making them more readable and enforceable. That could help when you get to the thornier issues.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

CathyA3 (Ohio)
Posts: 6,299

Posted:

In 2017 it cost us around $1000 per amendment - this included the lawyer's fees and fee to record approved amendment. There were other costs to handle the voting (printing, mailing, etc.).

LoriM15 (Florida)
Posts: 1,009

Posted:

We're in Florida. We made changes to our Declaration, Covenants, Bylaws, Rules and Regulations and our Architectural rules last year. The Declaration and the Covenants had to be recorded. The others were just reviewed by our attorney and the bylaws allowed the board to vote to accept.

We have a top-notch attorney who works both sides (HOA/COA documents and writes new documents for developers). He took his standard template and put in changes the board came up with. The final cost for everything, including recording costs, was less than $3000.

A good lawyer who has written CC&Rs plenty of times should be reasonable. But beware of attorneys that are just trying to churn your account for money.

Before we did this, the previous board had been working with another attorney/law firm that my board fired. They had been working on the documents for three years with no end in sight. The attorney leading the work is "famous" in our town, but his product was a mess. He included every possible scenario and then wrote explanation papers that justified why he included them. And charged us for all his time to write everything. Every meeting it was him and at least one associate - and we paid for them all. The kicker was the $350 he charged to read the resignation email from the president of the board. All in all, we paid $60,000 in one year for handling a lawsuit mediation and one opinion on whether we could kick out a group home, and the documents.

BenA2 (Texas)
Posts: 1,273

Posted:

Quote:

Posted By AdamL1 on 12/13/2021 9:26 AM
Curious if anyone's been through the process. Wondering, in general, how much a lawyer bill would be to update CCR's? Draft the amendments, prepare communications to membership, file official document with county, etc

We tried to change the CC&Rs once. We did the work ourselves, drafting the amendment, sending out notices, printing ballots, etc. which probably cost a couple hundred dollars in printing and postage. We use email for anyone who provides an email address so postage is kept down. If it would have passed, we would have had an additional filing fee of about $50.

Our amendment was relatively simple so we did not involve an attorney. That would be the biggest cost, I would think. I recommend having a committee draft the amendments and have an attorney review them and make recommendations for changes, if possible.

AdamL1 (UnitedStates)
Posts: 559

Posted:

Thank you all for the input. Our Dear Leaders just sent out a notice that our Dues are going up a lot, partly to pay for $10k in legal fees to amend the CCRs and Bylaws. This raised an eyebrow and seems exorbitantly expensive. We only really need to clean up a few old things in the CCR's like solar, basketball hoops, rental stuff. I'm trying to figure out what the hell they are spending $10,000 on.

KerryL1 (California)
Posts: 14,550

Posted:

Adam, maybe I'm don't remember this correctly, but do you have a master HOA and a sub HOA? Is the 10k for both? How long are your CC&Rs for each?

Are your "dear leaders" of the master? Or?

We signed a contract with our HOA attorneys back in '17 for $3,500 for the CC&Rs and $1,500 for the bylaws. It was a good price then and we've been working on it off and on with different boards since '18. Our HOA attorney has stated that ours are among the 10 most complicated on well over 100 that he's worked on.

Our CC&Rs are from 2000 and are well over 100 pages wrong, are loaded with developer language and outdated references to civil codes. So we are making a lot of changes.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

That isn't too high. We only changed 5 things and it was nearly 5 K. We had 107 homes. Plus it depends on how and who you hired as a lawyer to do it. Not all lawyers or lawyer contracts are the same. It doesn't take a fancy HOA lawyer. A general attorney familiar with contractual law may do. Plus you don't need a retainer most likely.

So 10K doesn't seem out of the range of reality when updating the rules. It's about on par... Unless you can think of other money saving steps the HOA board can take. There isn't much in cutting corners doing this work.

Former HOA President

CathyA3 (Ohio)
Posts: 6,299

Posted:

Quote:

Posted By AdamL1 on 12/13/2021 4:21 PM
Thank you all for the input. Our Dear Leaders just sent out a notice that our Dues are going up a lot, partly to pay for $10k in legal fees to amend the CCRs and Bylaws. This raised an eyebrow and seems exorbitantly expensive. We only really need to clean up a few old things in the CCR's like solar, basketball hoops, rental stuff. I'm trying to figure out what the hell they are spending $10,000 on.

That may or may not be out of line, it depends on how extensive the amendments are.

If your CC&Rs are fairly out of date or if one of your amendments would require the lawyer to research case law, that could run up the cost. For example, we wanted to amend our rental restriction, so among other things our lawyer looked at what happened to restrictions that had a specific percentage in them. (FYI: it's a mixed bag. Some courts upheld them, but enough shot them down to make our lawyer recommend that we not go that route. I agreed with the lawyer since I think a percentage is arbitrary by definition.)

And lawyers always need to make sure that restated CC&Rs comply with current state law, and they need to consider whether or not state law is probably going to change soon. Statutes regulating solar power is one item that's in flux in many states, so you wouldn't want to spend money on a shiny new restriction that becomes unenforceable in two years.

So it's not simply a matter of slapping together a few paragraphs in legalese - there can be a lot of work behind that legalese.

AdamL1 (UnitedStates)
Posts: 559

Posted:

Quote:

Posted By KerryL1 on 12/13/2021 4:54 PM
Adam, maybe I'm don't remember this correctly, but do you have a master HOA and a sub HOA? Is the 10k for both? How long are your CC&Rs for each?

Are your "dear leaders" of the master? Or?

We signed a contract with our HOA attorneys back in '17 for $3,500 for the CC&Rs and $1,500 for the bylaws. It was a good price then and we've been working on it off and on with different boards since '18. Our HOA attorney has stated that ours are among the 10 most complicated on well over 100 that he's worked on.

Our CC&Rs are from 2000 and are well over 100 pages wrong, are loaded with developer language and outdated references to civil codes. So we are making a lot of changes.

Everything is in reference to the Master HOA. Our CCR's are already well-written and there's no 'developer language'. The Master CCR's are maybe 25 pages and the sub CCR's are about 5 pages. There's honestly not a lot of complicated stuff, but rather some things that most members want to clean up, like basketball hoop rules, trampolines, playsets, etc.

Its just getting hard to square up what $10k will be spent on....

MelissaP1 (Alabama)
Posts: 13,836

Posted:

It's not for those whom have done it. You don't see all the hidden costs in your head. The filing fees for the documents are required. Depending on where you live they can be several hundred dollars to just file. Even if little changes, they still have to be drafted, changed, and re-written. That isn't free or shouldn't be done by an expert. Legal consultations depending on the lawyer used do vary. There is also the expenses of mailing out notices, producing copies, and general paperwork expenses. You can NOT put anything in a mailbox without a stamp on it. So have to factor in the expense of postage and office supplies it takes.

Our HOA it was required to have a special meeting to cast vote for making the changes. That was impossible to happen. So our lawyer drafted a separate petition to sign giving up the right to cast vote at a special meeting. That now meant 2 separate documents. Additional expenses.

What idea do you think it should be? Honestly, $10 K isn't out of the realm of reality especially if you have over 100 members.

Former HOA President

KerryL1 (California)
Posts: 14,550

Posted:

Sounds like too much money, Adam, with such a short doc. How many homes are in the master HOA? Btw, stuff like play equipment would seem to me to be in the Rules and Regs with the master giving the Board(s) authority to make rules about such stuff. Or even in Architectural guidelines.

JohnT38 (South Carolina)
Posts: 1,631

Posted:

We did a total rewrite from the ground up since our docs were from 1981. They were filled with conflicting information and sections that did not meet today's legal standards. We have 165 units and all land is common area. The total cost was around 12K. From start to finish it took us about 18 months.

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