a description of the purpose and effect of the proposed rule change

I originally posted about this in January...

In December, our PMC mailed out a 20-page update to our ARC guidelines that our Board was going to vote on at the next meeting.

There were a couple of problems with the mailer. First, they didn't count the days right and it ended up only being 27 days when 28 days was required. Second and more importantly, there was no indication of what had changed. They basically mailed out a copy of the new rules and asked for comments.

To me, the law is very clear that not only is a 28-day notice required, that it also required that "The notice shall include the text of the proposed rule change and a description of the purpose and effect of the proposed rule change."

Tonight I was flabbergasted when the board approved these updates based on that December mailing. I tried to say that I had brought this up before and they were in violation of the law, but the PMC shut me down and said the open comment section was closed...

Where do I go from here, is there any reasonable recourse? Is it possible I am misreading this section somehow?

Cal Civ Code 4360
https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?secti4360&lawCode=CIV

You didn't read it wrong, James: "Civil Code § 4360. Notice and Approval of Rule Change by Board...(a) The board shall provide general notice ... of a proposed rule change at least 28 days before making the rule change. The notice shall include the text of the proposed rule change and a description of the purpose and effect of the proposed rule change..."

The Board should have listed each new or repealed rule and its purpose & effect, (which often re the same) Surely the entire 20 pages don't comprise all new rules. I disagree with Max. Owners shouldn't have to compare the proposed 20-page ARC package with the old one side-by-side to ferret out what is new (and what may have been repealed) in it. The purpose/effet won't b in the text anyway. The way the board sent it makes it seem they are hiding new perhaps unreasonable demands in it that they hope Owners won't notice.

Generally, the PM would write the 28-day comment letter for owners, so perhaps your PM is too lazy to correctly separate out the new rules so owners can see them clearly and distinctly.

Sure, as Max suggests, owners can try to get everyone together and call a meeting to change the new rules, blah, blah. But that is very unlikely to happen and would distract from your goal to replace the current Board.

You know what your recourse is, James. Keep up the campaign to replace this Board that refuses to comply with statute. Otherwise, IDR, which you've already tried, I think.

Kerry
It's hard to hear at our meetings. I am pretty sure that our community manager said something to the effect that there were too many changes to list out. I am going to try to talk to one of my neighbors who was also at the meeting and see if that was their perception also.

In the past, when other boards made changes like this - at least they would line out the old verbiage and show what they wanted to replace it with in italics or some other way to distinguish the change.

The Board at an open meeting, Max, would have stated the actual changes and their purpose, voted on them, and then instructed the PM to place them in the notice to owners. The 28-days is not the problem here. The problem is a Board and/or PM that doesn't seem to want owners to easily see what the proposed changes are.

I, of course, haven't seen the doc, Max. I believe James when he states that only the proposed rules embedded in the entire doc--with nothing to distinguish the new rules OR their purpose--were sent to owners. Don't you believe James?

James notes a different way to show the changes to owners-- Send the whole doc and insert the new rules within the ARC doc italicized or in color. But somehow, the purpose for each new or repealed rule must be stated.

Max

There is a cover sheet that indicates:

"the Board of directors has made changes to the current Architectural Guidelines. The updated guidelines are attached for your review. Please review the changes and send any comments to ..."

Then on the second page, which is the table of contents, there is a notation "Redline changes recommended by (HOA's Attorney's Name). So yes, the HOA attorney apparently made redline changes.

To me, this is an example of a "redline change", compliments of OpenAI:

"The redline version of a legal draft typically displays the original text with strikeouts or deletions marked in red and insertions or additions shown in red and underlined or highlighted. This format allows the reader to easily identify the specific modifications made to the document, aiding in the review and comparison of different versions."

Again, there were no redline changes included, or any other type of notations. They simply sent out their new version of our Architectural Guidelines. The only way to discern a change, good or bad, would be to go through them, paragraph by paragraph, and compare them to our old rules. No one is going to do that, not even me. Which is probably the reason why they made a law about it...

And you want to be a Board member?

No, I *think* the attorney made the redline changes and sent the document back to the PMC. The PMC screwed up by not sending out the changes, they just sent out the finished document

Let us know if the attorney made the changes. If this would have me, I would have just sent what the attorney drafted and not waste my time on the initial draft.

Why would that be considered privileged information?

Good Luck

Great that James is reading lots of CA statutes, but first, you have to be willing the ones sent to you.

So, according to James, they didn't bother to read the "proposed" changes because they were not "redlined" for his convenience. James says that the attorney provided a "redlined" version and that the PM must have changed it. How do you know WHAT James and his fellow owners received? James complained the Board didn't follow the 28 days rule and the Board doesn't know how to count, but to the best of my knowledge, 5 months is GREATER than 27 or 28 days.

I have done plenty of rule changes over 14 plus years, a few more than you have. I also don't waste 5 years getting CCRs and Bylaws passed and then have to whimper to a judge because you couldn't get the required vote to pass the CCRs.

You or I haven't seen the document, what's in it, where it came from, and is it replacing an old set or was a new set created?

It appears that James would rather be a board member who can criticize others while not offering to provide solutions. For a large HOA that James says he belongs to, I would rather have a leader than a follower.

Trying again. The statute states that "The notice SHALL include the text of the proposed rule change and a description of the PURPOSE AND EFFECT of the proposed rule change..." Owners in James' HOA did not receive that verbiage, which is needed for every proposed rule change.

To send only a 20 page doc, which may have a total of several proposed rules changes scattered all over it, with no indication of what is proposed, requires an owner to sit with that version & the current version side by side to learn WHAT is proposed. WHY would a board want owners to have to deal with that??? The only reason I can think of is sloppiness, laziness, ignorance or a desire to bury proposed changes that are unreasonable so that owners won't notice them. Why do you think that's OK, Max?

Max, Max. The above statue has not been in force for 14 years. Only a few. Say, can you even write an example of a couple of ARC proposed rule changes and their purpose?

You must have my HOA mixed up with someone else. From the day our Board sent out the proposed CC&R revisions to voters until the inspectors of election tallied the votes was maybe 5 months. That our 63+% approval rate did not meet the 67% needed, is hardly a negative sign and is common in CA HOAs as you very well know.

You still don't seem to grasp the problem. The HOA did not follow the laws and provide the exact proposed changes's wording individually and the purpose of effect of each change. WHY is that OK with you? I suggested that you, Max, do not know how to write such requirements in the notice. You don't, right?

You also still don't get another aspect of James' board's sloppiness. They sent a 20 page doc with proposed rules hidden in it. Owners would also have to read the current 20 or so page doc to compare the two so they could learn WHAT was changed. That's 40 pages, which might even be in different sequences, when the only purpose a board could have for making owners do this is to hide unreasonable proposed rules.

Really, the HOAs you manage have 200 pages of governing docs? Ha Ha. In any case, a prospective protecting oneself by reading such docs before purchasing (not before "moving in" as Max wrote) is advised, of course. Often it involves folks' life savings. A lazy or slimy board board failing to follow the law is an entirely different story. Your attempt here, Max, might be known as a false equivalency.

Ah, yes, several boards in my HOA stopped and re-started CC&Rs revision work. One board was even voted out doing that period--well 3 of the 4 were NOT reelected, and the 4th (of) 7 resigned. I was off the Board for a year during that period. Why does it matter one bit to you, Max, about these off again, on again attempts in my HOA? So what? Who cares? And why, again, stray from James' topic? Try to focus. Maybe if you squint.

Sheila
I tried comparing the old rules with new. It's not as easy as it sounds. When I brought this up in January, I *thought* they would acknowledge their mistake and send out another mailing that complied with the law and showed not only what was changed by also the reason for the change. We pay our PMC almost $14k a month - is it too much to ask that they actually follow the law and do what they are paid to do?

Max
I thought when I brought this to their attention that they would realize their mistake and take corrective action and resend the mailer again. I am a little confused why you would indicate that "James would rather be a board member who can criticize others while not offering to provide solutions" I provided the solution, send out a new notice with changes and the reason for the change, per California Law. What else should I have done in your opinion? (and no offense, are you having a bad day?)

I came to this site and asked the question because people don't know, what they don't know. I need to get the message across that our current board and property management company are incompetent and we as a community can do a lot better. I would imagine as Kerry pointed out that moss of our homeowners read the mailer and thought these are a new guidelines and basically it is a done deal. That is not the case.

I did find some items that I had concerns over, but I thought since the PMC needed to resend the mailer, I would be able to go over all the changes and present my concerns at once.

And, I don't think we need a slate of 5, we just need 3 like-minded individual and I think at this point we have that. I am pretty sure the current board was not counting on even having to hold an election this year and I do not know how many of the 5 actually are going to run for re-election, but I would bet that one or two will not. As you noted, the biggest challenge will be to meet quorum and we are working on getting people to volunteer to go door to door to leave flyers. I also have email addresses that I have started using to send out generic, info type emails at this point.

Lastly
Kerry and Max
I have only been a member here for several months and I enjoy reading comments from both of you. With that being said, is it possible that the two of you put your differences aside or at least scale it down a little.

If it were me, I would take the time to read the 20 pages - which is not much - compare them to the current rules, and create your own document that highlights the changes. That might take an evening or two. The. I would circulate it among the homeowners as a helpful gesture; which might demonstrate to them your commitment to the good of the community and perhaps help you in a future election.

I would the. Send a letter to the board and, for each change, ask them for their rationale.

Well, Max just jumped off the deep end with some sort of citation that, again has zero to do with JamesB's topic. Zzzzzzzz.

David has a fine idea, JamesB. I do know that it will take some time to compare the two 20 page docs to dig out the proposed rule changes. But it make sense to do just that and send it to the Board asking them for the "purpose" of each change. As you. know, some probably will be obvious. Now, if they seem perfectly reasonable, don't bother sending int to the board

But this would be a nice service for your fellow owners if you'd send just the list of proposed changes to them saying that further rules changes, with a new board will show the changes in the Notice so that all Owners can see them and provide their comments to the Board.

I have recorded many amendments with various counties throughout California. What is recorded is NOT a redline copy, but a final clean copy.

You have to focus on the big picture and that is getting quorum and getting on the board. This stuff at this point in time means absolutely nothing.

I just got off the phone with a former client. Your situation pales in comparison to theirs. They are operating with an illegal board, sanctioned by the PMC.

I'm in WA and it looks like we do things a bit differently than in CA, but I have a similar story. Many years ago, our board adopted new bylaws. They didn't precisely follow the notice requirements, and they didn't highlight the changes they were making, they just sent out the proposed new document. I read it very carefully, looking for the changes myself, and sent them my comments as they asked. They ultimately adopted new bylaws and about a week later we had elections. A few months later, one of the new board members questioned whether the new bylaws were actually in effect, since the procedure had not been precisely followed, and the attorney advised that, since there hadn't been any motions to reject, courts would likely consider the new bylaws to be enforceable.

I took a look at the Davis Stirling website and found that in CA operational rules have to meet certain criteria to be enforceable:

(1) the rule is in writing--seems like this is met in your case

(2) the rule is within the authority of the board conferred by law or by the declaration, articles of incorporation or association, or bylaws of the association--no one here can possibly know if this is met without reading all of your governing documents, but since it appears your HOA attorney has been involved in the process, this is likely met

(3) the rule is not in conflict with governing law and the declaration, articles of incorporation or association, or bylaws of the association--same as (2) above, although, mistakes are sometimes made. In the story I told above, our HOA attorney was involved in the changes to our bylaws and they missed the fact that one of the proposed changes was in conflict with a state HOA law. I pointed it out in my comments and that change was removed in the final adopted document.

(4) the rule is adopted, amended, or repealed in good faith and in substantial compliance with the requirements of this article--27 instead of 28 days is likely seen as "substantial compliance", the text of the rule changes was included in the notice, the "purpose and effect" of the rule changes may have been included in an overall, general sense in the original cover letter, and may have been discussed in more detail at the board meeting(s?) at which the proposed changes were discussed.

(5) the rule is reasonable--do you have any concerns about the actual content of the adopted changes, or just the procedure?

It seems to me that the time for comment about the proposed changes was from December to May. Were open board meetings held during this time? Was there any feedback about the changes from the owners (other than your procedural concerns)? Did the board consider the feedback in good faith? Were any changes made? It looks like you missed your opportunity to impact this set of changes, but there may still be a way to petition to reject--check your governing documents.

It's frustrating when boards make mistakes--but they are volunteers (hopefully) doing the best they can. It's frustrating when the PM doesn't call out or correct those mistakes--but I imagine they need to pick their battles and walk a fine line to navigate "substantial compliance", "good faith", etc. in order to maintain a good working relationship.

I was in your place once--compiling a list of procedural mistakes and nitpicking everything the board was doing. I've grown a lot since then. Now, I do my best to realize we're all on the same team. Was your board trying to do something positive for the community by updating these rules? Look for ways they have succeeded first and then look for ways to help them make the changes even more positive--and to go more smoothly next time.

Best of luck.

Margaret

I always have to chuckle when people point out when our 'elected representatives' (HOA, School Board, Local Government, etc) have been caught not following the rules and regulations that we elected them to follow, and others chime in to say your nitpicking (no offense intended to you)

First of all, you're looking at the wrong section on Davis-Stirling. Changing the Architectural Guidelines is considered an Operating Rule change and Civil Code Section 4360 applies. I am not going to recite the code, but here is a link:

https://www.davis-stirling.com/HOME/Statutes/Civil-Code-4360#axzz2CR2ljirY

Now do you think our legislators just sit around and then all of a sudden one of them jumps up and says "I know, let's make a law regarding the procedure to enact a rule change for HOA's in California?"

These rules and laws come about for a reason - usually something has been abused and legislatures enact a law to try to correct the problem. Why do we even have that Civil Code Section then?

I mean, where do you draw the line? In your mind, is it nitpicking to expect someone to come to a complete stop at a stop sign, even if there are no other cars in sight? If a traffic light tuns red before you enter an intersection and you don't stop - I mean, what's the big deal, right?

Here is the bottom line. Yes our Board members are volunteers and I don't expect them to know all the rules, laws etc, but I do expect them to act in the best interest of the HOA and apply a little common sense.

WE PAY A PROPERTY MANAGEMENT COMPANY ALMOST $14,000 A MONTH to know the rules and laws and to "advise" our Board of Directors. We also have an Attorney on retainer to give the Board legal advice.

So how did this update get mailed out with these errors? I mean, am I nitpicking to think that a PMC should actually be able to perform the duties that they were hired to perform?

All important since all rules must be consistent with the Declaration. How can you know unless the purpose and effect are explained?

While I do believe the board should explain their reasoning, the letter of the rule should speak for itself in regards to whether or not it is consistent with the Declarations.

If nothing else, the board does itself a disservice by not explaining their reasons - because homeowners are then free to conject all kinds of devious purposes.

On the other hand, there are only two options for the OP:

* Sue the board
* Try to get a majority of like-minded people on the board for the future

Unless there are some egregious problems with the new rules, I don't see how suing would be a rational option. Perhaps use it as an argument to vote for you rather than the existing board.

Board members have a fiduciary duty to know the law. If they don't care enough to read, they shouldn't be on the board. Our board not only doesn't read the law, they ignore anyone who tries to inform them.

While we can appreciate Margaret's contributions, summarizing a section "...as he text of the rule changes was included in the notice, the 'purpose and effect' of the rule changes may have been included in an overall, general sense in the original cover letter, and may have been discussed in more detail at the board meeting(s?) at which the proposed changes were discussed." this isn't exactly what the statute says, Again, it states:

"The notice SHALL include the text of the proposed rule change and a description of the PURPOSE AND EFFECT of the proposed rule change..." Owners in James' HOA did not receive that verbiage, which is needed for every proposed rule change in CA. It's all well and good IF each change was discussed at an open meetings because then each would have been recorded in the meeting minutes. So, to James, were the proposed changes in the minutes of the Jan. meeting?

But even if they were, the law is the rationale for the proposed changes must be in the written notice. And they were not, right, James?

It's easy to understand how difficult it can be to compare two docs when there are a lot of changes, JamesB, and David's right, it could take a couple of evenings or even more.. it depends or whether they've been totally internally reorganized or not. The point is the Board is NOT supposed to make it difficult for Owners to see what the proposed changes are. I agree with JamesB that this statute is in place precisely because boards could make arbitrary unreasonable rule changes without any feedback whatsoever from Owners.

Couple of years ago, when I was a director, our Board proposed a rule change that seemed OK with us directors, We sent out the proposed change and the purpose & effect of it. But several Owners howled against it in writing and at the subsequent open meeting. And from their perspective, our proposed rule was unreasonable. We dumped it.

In CA, Terri, Owners can unify and overturn rules that they think are unreasonable. I think you can find the methods somewhere around CA Civil Code 4360. OR visit Davis-stirling.com, Index, Rules and read the headings.

In JamesB's case it's part of a long train of abuses that he perceives. I've been following his posts and it does seem like he's doing all one can do to get a quorum to vote in the election. JameB, my group that helped me campaign and throw out some badd directors used email liberally to send colorful flyers. With 25% of our owners living offsite and about 12-15% only here part-time, it was the best way to reach voters. Absentee voting in CA HOAs helps immensely.

Say, anyone who thinks Max's constant, creepy remarks bout my HOA,my job description as sec'y, etc. belong on this forum, please tell me why. Would anyone hazard a guess as to Max's motives for this odd behavior?