Hierarchy of Legal Documents Declaration/CCRs vs Non Profit statute?

Started by WendyM5 • 48 replies • 381 views

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WendyM5 (North Carolina)
Posts: 1,522

Posted:

We want to update our bylaws.
Bylaws do not state how to amend them. big omission IMHO.

Our Declarations say to amend declarations takes 75% yes votes out of total owners. Ariticles of Incorporation say 66%. Bylaws dont' even mention amending them.

North Carolina Non Profit law 55a says updating bylaws takes 51% of owners or if voting at a meeting 2/3 of the ballots cast as long as quorum is met. That is equivalent to only 2/9th of the total membership since our quorum is 1/3. Lately we've been able to get 1/3 quorum.

The Non profit law would be much easier to achieve and we'd love to use that.
North Carolina PCA doesen't seem to address this either.

Yes, we will wind up hiring a lawyer, but until then would like to educate myself.

vis ta vie

KerryL1 (California)
Posts: 14,550

Posted:

Your HOA is a corporation, right, Wendy? This means that you often may want to review the Nonprofit statutes and follow them so long as they do not conflict with your Declaration or Articles. Then make sure your proposed new or changed bylaws section sdo not conflict with your declaration or Articles of Inc.

And, ys, you'll want your HOA attorney to make sure the proposed amendments are in ci compliance with your higher-level docs and with NC statutes.

If at a meeting of the members, you only need 2/3 of the votes cast to vote yes to approve the amendments, IF you make quorum. Great!

Bylaws are usually pretty blank and our recent revision of our 20 y.o. ones generated no controversies or problems. What do you have in mind modifying?

KerryL1 (California)
Posts: 14,550

Posted:

Your HOA is a corporation, right, Wendy? This means that you often may want to review the Nonprofit statutes and follow them so long as they do not conflict with your Declaration or Articles. Then make sure your proposed new or changed bylaws section do not conflict with your declaration or Articles of Inc.

And, yes, you'll want your HOA attorney to make sure the proposed amendments are in sync with your higher-level docs and with NC statutes.

At a meeting of the members, you only need 2/3 of the votes cast to vote yes to approve the amendments, IF you make quorum. Great!

Bylaws are usually pretty bland and our recent revision of our 20 y.o. ones generated no controversies or problems. What do you have in mind modifying? As a part of the amendment, do add how they might be amended to make it easier for future boards. Usually that is very near the end.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Expecting that your Association is incorporated, your Bylaws would have to comply with the corporation act.

If your Bylaws are silent on how to amend, then the Association would follow what is written within the corporation act.

Note: Bylaws specify how an Association is to run. They should not contain items/restrictions that should be within the covenants.
Associations that add restrictions to the bylaws instead of the covenants can run into potential legal issues if the restriction is challenged in court.

See:

What's the Difference Between Homeowners' Association (HOA) Bylaws and CC&Rs? From Nolo

HOA Bylaws and CC&Rs: What’s The Difference? from a management company

TimB4 (Tennessee)
Posts: 21,059

Posted:

It should also be noted that some Associations (I've mainly seen it within condominiums) will combine the covenants and bylaws into one document and refer to them as Bylaws instead of covenants.

In these cases, I think it would be best to discuss the issue with an attorney so the correct section of the document is amended.

WendyM5 (North Carolina)
Posts: 1,522

Posted:

Quote:

Posted By TimB4 on 07/07/2023 2:45 AM
Expecting that your Association is incorporated, your Bylaws would have to comply with the corporation act.

If your Bylaws are silent on how to amend, then the Association would follow what is written within the corporation act.

Note: Bylaws specify how an Association is to run. They should not contain items/restrictions that should be within the covenants.
Associations that add restrictions to the bylaws instead of the covenants can run into potential legal issues if the restriction is challenged in court.

See:

What's the Difference Between Homeowners' Association (HOA) Bylaws and CC&Rs? From Nolo

HOA Bylaws and CC&Rs: What’s The Difference? from a management company

That's what I think as well, but I've got another board member disagreeing. They say the Declaration lists the Articles of Incorporation as Exhibit B and the Bylaws as Exhibit C. And since these documents are mentioned in the Declaration then they too should be at 75% to amend. He's even going as far as saying that the Articles of Incorporation should not be 66% as written but 75% because their hierarchy is lower.

No where in the delcaration does it state that the declaration controls the other 2 documents. I would agree if there was a blatant conflict between the documents then the Declartion would win, but this deals with missing information on how to amend, not a conflict.

Ive reached out to a couple of lawyers and am waiting to hear back. Just getting other viewpoints so I can discuss it intelligently.

vis ta vie

TerriS6 (California)
Posts: 3,284

Posted:

Declaration and Articles supersede bylaws.

TerriS6 (California)
Posts: 3,284

Posted:

And I would venture to say that the Articles give the corporation the power to enforce the Covenants so that the Articles' figure of 66% wins.

JackS20 (North Carolina)
Posts: 271

Posted:

Quote:

Posted By TerriS6 on 07/07/2023 4:48 AM
And I would venture to say that the Articles give the corporation the power to enforce the Covenants so that the Articles' figure of 66% wins.

no Articles are under the CCRs.
Each document specifies how to amend it.One can't say the Articles say 66% so the bylaws are also 66%.

https://www.hoamanagement.com/hoa-documents-hierarchy/

based off above hierarch website.

JackS20 (North Carolina)
Posts: 271

Posted:

Quote:

Posted By TerriS6 on 07/07/2023 4:45 AM
Declaration and Articles supersede bylaws.

only if there is a conflict. Absent a conflict, one can't just infer something over.

What if a HOA resident went up to the BOD and said they needed to get 75% approval to make changes to the Rules and Regulations? The logic being that the Rules and regulations are under the Declarations? The BOD would tell them they have the authority to make changes without anyones approval.

TerriS6 (California)
Posts: 3,284

Posted:

The Declaration outlines the obligations of the parties. The Articles give the corporation the power to enforce the obligations.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Each document is different and serve different purposes. Articles of Incorporation makes the HOA incorporated. CC&R's are for the restrictions on the property/home. By-laws are rules. Many states only the Articles and CC&R's are required to be filed. By-laws are not but often accompany CC&R's filing for record keeping. By-laws are HOA documents and not necessaarily "public" documents. CC&R's and Articles are PUBLIC. Articles on a STATE level and the CC&R's on a COUNTY level.

They do not required the same amount of votes to make changes usually. Our Articles required 90% and CC&R's 75% (By-laws too). Part of the changes can be for changing the percentage voting if that is agreed upon. Just have to get the original percentage required to vote on it first for the change.

Former HOA President

WendyM5 (North Carolina)
Posts: 1,522

Posted:

Quote:

Posted By MelissaP1 on 07/07/2023 5:08 AM
Each document is different and serve different purposes. Articles of Incorporation makes the HOA incorporated. CC&R's are for the restrictions on the property/home. By-laws are rules. Many states only the Articles and CC&R's are required to be filed. By-laws are not but often accompany CC&R's filing for record keeping. By-laws are HOA documents and not necessaarily "public" documents. CC&R's and Articles are PUBLIC. Articles on a STATE level and the CC&R's on a COUNTY level.

They do not required the same amount of votes to make changes usually. Our Articles required 90% and CC&R's 75% (By-laws too). Part of the changes can be for changing the percentage voting if that is agreed upon. Just have to get the original percentage required to vote on it first for the change.

I agree with everything you said. However you have no opinion on what to do when bylaws do not state how they are to be amended?

vis ta vie

WendyM5 (North Carolina)
Posts: 1,522

Posted:

Quote:

Posted By TerriS6 on 07/07/2023 5:06 AM
The Declaration outlines the obligations of the parties. The Articles give the corporation the power to enforce the obligations.

Maybe in your state in North Carolina the Declaration is above the AOI. Excerpt below taken out of CIC in NC 2nd edition writen by a lawyer:

Ideally, the main governing documents for the homeowners association compliment one
another and are entirely consistent. When conflicts in the declaration, bylaws and articles arise, the
question becomes, what document controls? Is one document given more importance than another?
Generally speaking, in order of priority, the declaration should be given top priority, followed by
the articles of incorporation, followed by the bylaws and then any rules adopted by the board.

Robert’s Rules of Order prioritizes the documents in this order. All planned communities and
condominiums in North Carolina are to run their membership meetings and board meetings by
Robert’s Rules of Order.
............
When possible, the bylaws and articles of a corporation are to be read so as not to place
them in conflict with each other.
If one cannot avoid the conclusion that there is in fact a conflict
between the bylaws and the articles, then the articles would trump the bylaws.
When there is a conflict between the bylaws and the declaration, both the PCA and Condominium Act are also
clear that the declaration trumps the bylaws in such cases.
Of course, sometimes the documents
themselves may proscribe the priority of the documents. In such cases, this order should be followed
unless the documents provide that the bylaws are to be given priority over the declaration, which
order would clearly be inconsistent with the PCA and the Condominium Act.
In situations where there is a conflict between the main declaration and individual deed restrictions in private deeds,
most courts have held that the declaration controls.

vis ta vie

TerriS6 (California)
Posts: 3,284

Posted:

California - I'm just saying they are different. You can write whatever obligations you want in the Declaration but if those obligations are not within the scope of the corporation's specific purpose, there is no power to enforce them. That also from an attorney, an authority on associations.

SheliaH (Indiana)
Posts: 6,964

Posted:

Since your documents don't say how to amend them (that was a big boo-boo by someone), this is an opportunity to add the 51% requirement (the HOA is a non-profit, so I don't see any reason why you couldn't do that). It may take a little longer, but it would be better to add this to your documents first and then address the rest of the bylaws you'd like to update. For now, you may as well go with the 51% - it's still a majority and doesn't stop anyone from voting, so if you prefer a 75% yes rate, get off your ass and vote, and encourage your neighbors to do the same.

You could also ask homeowners to vote on a package of changes to address this and other parts of the bylaws. That may be a little too much for some people, so focus on addressing this first. You already know you'll have to consult an attorney to confirm what you can and can't do because you want all this to stand up in court.

What do your board colleagues think of this - they'll have to be involved so all of you can talk to the homeowners as to why this is important. You can always debate which percentage you want, although I agree 51% is probably easier. You've spoken of problems with getting quorum at your annual meetings, and this may be a good time to tell people how their lack of participation can and does hamper the board from taking certain steps that are necessary to run the association effectively.

While you're at it, you might want to ask the attorney what needs to be done to simplify the wording in the documents. One reason people don't read Bylaws and CCRs {besides laziness} is that the legalese is too intimating. These days, legal writing classes are emphasizing using everyday English, but there's more to it than just changing words. You might also change the meaning or take something out of context - or make the item completely unenforceable if this isn't done properly. You may be able to hire a paralegal to do this for you to save money, although an attorney should still take a look to ensure nothing's missed.

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

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By TerriS6 on 07/07/2023 6:17 AM
California - I'm just saying they are different. You can write whatever obligations you want in the Declaration but if those obligations are not within the scope of the corporation's specific purpose, there is no power to enforce them.

TerriS6, as others indicated, in a conflict between the Declaration and the Articles of Incorporation, and in California per Civil Code 4205, the Declaration controls. See https://www.davis-stirling.com/HOME/Statutes/Civil-Code-4205

If you are speaking about amendments to the Declaration, the courts say the amendments have to be reasonable. What "reasonable" is depends on the particular issue.

TerriS6 (California)
Posts: 3,284

Posted:

ElleN you are correct and I was off topic because I wasn't addressing the percentages. I'm sure the atty will have an answer.

WendyM5 (North Carolina)
Posts: 1,522

Posted:

Quote:

Posted By ElleN on 07/07/2023 6:42 AM

huh? this is about the bylaws not the Declar. or Articles.

vis ta vie

WendyM5 (North Carolina)
Posts: 1,522

Posted:

Quote:

Posted By TerriS6 on 07/07/2023 6:45 AM
ElleN you are correct and I was off topic because I wasn't addressing the percentages. I'm sure the atty will have an answer.

no you are off topic because the questions is about the bylaws, not the declar. or articles.

vis ta vie

WendyM5 (North Carolina)
Posts: 1,522

Posted:

Quote:

Posted By SheliaH on 07/07/2023 6:18 AM
Since your documents don't say how to amend them (that was a big boo-boo by someone), this is an opportunity to add the 51% requirement (the HOA is a non-profit, so I don't see any reason why you couldn't do that). It may take a little longer, but it would be better to add this to your documents first and then address the rest of the bylaws you'd like to update. For now, you may as well go with the 51% - it's still a majority and doesn't stop anyone from voting, so if you prefer a 75% yes rate, get off your ass and vote, and encourage your neighbors to do the same.

You could also ask homeowners to vote on a package of changes to address this and other parts of the bylaws. That may be a little too much for some people, so focus on addressing this first. You already know you'll have to consult an attorney to confirm what you can and can't do because you want all this to stand up in court.

What do your board colleagues think of this - they'll have to be involved so all of you can talk to the homeowners as to why this is important. You can always debate which percentage you want, although I agree 51% is probably easier. You've spoken of problems with getting quorum at your annual meetings, and this may be a good time to tell people how their lack of participation can and does hamper the board from taking certain steps that are necessary to run the association effectively.

While you're at it, you might want to ask the attorney what needs to be done to simplify the wording in the documents. One reason people don't read Bylaws and CCRs {besides laziness} is that the legalese is too intimating. These days, legal writing classes are emphasizing using everyday English, but there's more to it than just changing words. You might also change the meaning or take something out of context - or make the item completely unenforceable if this isn't done properly. You may be able to hire a paralegal to do this for you to save money, although an attorney should still take a look to ensure nothing's missed.

I dont' want 51% I want what NC 55a states which is 51% or 2/3rd approval when a meeting has quorum. Since our quorum is 1/3 that could be as low as 2/9th of the entire owners, which is pretty much a reasonable struggle given the apathy in the neighborhood. One of the biggest reason for apathy is becuase its hard to change anything. I'm not gonna increase apathy by requiring a 51% approval, something that has not been achieved in 26 years.

vis ta vie

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Since by laws are not required to be filed publicly and a re basically internal documents to the HOA only, it does not take much to change them. Our lawyer told us that we could amend or change the bylaws by showing it in our meeting notes. We could vote for a change at a meeting and then note it in our official meeting notes. That is just for by laws if separate from CC&Rs.

Former HOA President

TerriS6 (California)
Posts: 3,284

Posted:

Wendy, your original comment was about bylaws, declaration, and articles.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By WendyM5 on 07/07/2023 4:19 AM
the Declaration lists the Articles of Incorporation as Exhibit B and the Bylaws as Exhibit C. And since these documents are mentioned in the Declaration then they too should be at 75% to amend. He's even going as far as saying that the Articles of Incorporation should not be 66% as written but 75% because their hierarchy is lower.

I would want to see every sentence in the Declaration that refers to the Bylaws. I would be looking in particular for references to "amended bylaws."

If the Declaration makes no reference to amended bylaws, then to amend the Bylaws in this case, IMO the HOA is stuck with meeting the requirements to amend the Declaration.

Further elaboration:
A HOA cannot lawfully just swap the current Declaration Exhibit C with a new Exhibit C. It's the same idea as a contract that has exhibits. Exhibits may be changed only if the terms of the contract allow the change. Declaration Exhibit C is written in concrete until such time as a Declaration amendment occurs. Plus one should keep in mind how much confusion may result if the Bylaws are amended without simultaneously changing Exhibit C. The old bylaws will be floating around, conflicting with the new ones and confusing owners, directors and the courts alike.

Quote:

Posted By WendyM5 on 07/07/2023 4:19 AM

No where in the delcaration does it state that the declaration controls the other 2 documents. I would agree if there was a blatant conflict between the documents then the Declartion would win, but this deals with missing information on how to amend, not a conflict.

If your HOA amends the bylaws without simultaneously amending the Declaration (in particular, its exhibits), then IMO the old Bylaws still control, since they are an Exhibit within the Declaration, unless perhaps the Declaration says more about amended bylaws.

Be aware that:
-- North Carolina statutes 47F states that in a conflict between the Declaration and Bylaws, the Declaration controls. See https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_47F/GS_47F-2-103.html

-- North Carolina statutes 47F says the bylaws must include the method of amending the bylaws. See https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_47F/GS_47F-3-106.html

-- The North Carolina Nonprofit Corporation Act specifies not "51%" but a "majority." A majority is 50% + one more vote.

WendyM5 (North Carolina)
Posts: 1,522

Posted:

Quote:

Posted By ElleN on 07/07/2023 7:17 AM

Quote:

so when the articles of incorporation say 66% to amend that is incorrect as well, we actually need 75%?

by that logic the board needs to get approval to modify the rules and regulations because the Declaration mentions the Rules and regulations, but our rules and regulations have no clause saying how they need to be amended?

47F/GS_47F-2-103 does not apply becuase there is no conflict, there is just missing info on how to amend bylaws.
47F/GS_47F-3-106 does not apply to our pre 1999 hoa, but even if it did, all it would accomplish is telling us that our bylaws do not meet the law and would need to be amended.

Below are all instances of bylaws mentioned in the Declaration:

Homeowners Association, Inc., as a nonprofit corporation for the purpose Of exercising and performing the aforesaid functions, said corporation to be governed by the bylaws attached hereto as Exhibit "C” and incorporated herein by reference.

(1.5) "Bylaws" shall mean the Bylaws for the Association attached as Exhibit "C" hereto and incorporated herein by reference.

(3.2) Delegation and Use. The right and easement of enjoyment granted to every Owner in Section 3.1 of this Article may be exercised by members of Owner's family and guests thereof. An Owner may delegate to his tenants his rights of enjoyment in and to the Common Area and such facilities thereon as may be provided, in accordance with the Association's Bylaws and rules and regulations, if any.

There shall be no obligation to call a meeting for the purposes of considering the budget except on petition of the members as provided for special meetings in the Bylaws.

vis ta vie

WendyM5 (North Carolina)
Posts: 1,522

Posted:

Quote:

Posted By MelissaP1 on 07/07/2023 7:12 AM
Since by laws are not required to be filed publicly and a re basically internal documents to the HOA only, it does not take much to change them. Our lawyer told us that we could amend or change the bylaws by showing it in our meeting notes. We could vote for a change at a meeting and then note it in our official meeting notes. That is just for by laws if separate from CC&Rs.

might want to get a new lawyer. that sounds sketchy as heck and would never fly in North Carolina. at a bare minimum the Non profit law 55a would apply.

vis ta vie

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By WendyM5 on 07/07/2023 7:44 AM
so when the articles of incorporation say 66% to amend that is incorrect as well, we actually need 75%?

The above is how I see it.

Quote:

Posted By WendyM5 on 07/07/2023 7:44 AM
by that logic the board needs to get approval to modify the rules and regulations because the Declaration mentions the Rules and regulations

The Declaration's "mention" of a document is not the same as incorporating the document into the Declaration via an Exhibit.

Quote:

Posted By WendyM5 on 07/07/2023 7:44 AM
47F/GS_47F-2-103 does not apply becuase there is no conflict, there is just missing info on how to amend bylaws.

I was referring to the conflict that arises from (ostensibly) amending the bylaws while not amending the Declaration's Exhibit C.

Quote:

Posted By WendyM5 on 07/07/2023 7:44 AM
47F/GS_47F-3-106 does not apply to our pre 1999 hoa,

You would have to cite this for me to believe it.

I am not saying you are wrong. I am saying that so far, I do not see this.

Quote:

Posted By WendyM5 on 07/07/2023 7:44 AM
[A few] instances of bylaws mentioned in the Declaration:

Homeowners Association, Inc., as a nonprofit corporation for the purpose Of exercising and performing the aforesaid functions, said corporation to be governed by the bylaws attached hereto as Exhibit "C” and incorporated herein by reference.

(1.5) "Bylaws" shall mean the Bylaws for the Association attached as Exhibit "C" hereto and incorporated herein by reference.

The above seals it for me. As far as I am concerned, the number is 75%.

If per chance only the Declaration must be recorded with the County, this provides still more support for the number being 75%. Your HOA should not want the Declaration, with the original Bylaws, floating around as public record and legal notice to all, when the HOA is instead using amended bylaws.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

I am with Ellen on this. 75% as the Bylaws do no give a method to amend themselves.

WendyM5 (North Carolina)
Posts: 1,522

Posted:

Quote:

Posted By ElleN on 07/07/2023 8:02 AM
Posted By WendyM5 on 07/07/2023 7:44 AM
so when the articles of incorporation say 66% to amend that is incorrect as well, we actually need 75%?

The above is how I see it.

Quote:
Posted By WendyM5 on 07/07/2023 7:44 AM
by that logic the board needs to get approval to modify the rules and regulations because the Declaration mentions the Rules and regulations
The Declaration's "mention" of a document is not the same as incorporating the document into the Declaration via an Exhibit.

Quote:
Posted By WendyM5 on 07/07/2023 7:44 AM
47F/GS_47F-2-103 does not apply becuase there is no conflict, there is just missing info on how to amend bylaws.
I was referring to the conflict that arises from (ostensibly) amending the bylaws while not amending the Declaration's Exhibit C.

Quote:
Posted By WendyM5 on 07/07/2023 7:44 AM
47F/GS_47F-3-106 does not apply to our pre 1999 hoa,
You would have to cite this for me to believe it.

I am not saying you are wrong. I am saying that so far, I do not see this.

Quote:
Posted By WendyM5 on 07/07/2023 7:44 AM
[A few] instances of bylaws mentioned in the Declaration:

Homeowners Association, Inc., as a nonprofit corporation for the purpose Of exercising and performing the aforesaid functions, said corporation to be governed by the bylaws attached hereto as Exhibit "C” and incorporated herein by reference.

(1.5) "Bylaws" shall mean the Bylaws for the Association attached as Exhibit "C" hereto and incorporated herein by reference.
The above seals it for me. As far as I am concerned, the number is 75%.

If per chance only the Declaration must be recorded with the County, this provides still more support for the number being 75%. Your HOA should not want the Declaration, with the original Bylaws, floating around as public record and legal notice to all, when the HOA is instead using amended bylaws.

Declaration made in 1995, Articles in 1996 and bylaws unknown. The only exhibit actually included in the Delcaration is Exhibit A a description of the map/land that makes up the HOA. Given that exhibit B and C have never been and were not orginally presented with the Declaration it is fair to say they were made afterwards IMHO.
below is table from legal book saying 106 does not apply. Even if it did apply wouldn't change anything. We arleady know the bylaws lack an amendment clause and need to be updated.

vis ta vie

WendyM5 (North Carolina)
Posts: 1,522

Posted:

Quote:

Posted By JohnC46 on 07/07/2023 8:29 AM
I am with Ellen on this. 75% as the Bylaws do no give a method to amend themselves.

do you also agree with Ellen that the Articles are also 75% even though they state 66% to amend?

vis ta vie

WendyM5 (North Carolina)
Posts: 1,522

Posted:

Quote:

Posted By JohnC46 on 07/07/2023 8:29 AM
I am with Ellen on this. 75% as the Bylaws do no give a method to amend themselves.

do you also agree with Ellen that the Articles are also 75% even though they state 66% to amend?

vis ta vie

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I agree with Ellen. Your documents maybe more restrictive than the laws you quote.

Former HOA President

WendyM5 (North Carolina)
Posts: 1,522

Posted:

Quote:

Posted By MelissaP1 on 07/07/2023 8:40 AM
I agree with Ellen. Your documents maybe more restrictive than the laws you quote.

If the Declaration , AOI and Bylaws were actually part of the same document filed at the same time I could see that arguement. But given that the AOI & Bylaws were made years afterwards and never actually labeled Exhibit B and C respectively, it is hard to conclude the original Declaration would apply to non exsistant exhibits at the time.

vis ta vie

KerryL1 (California)
Posts: 14,550

Posted:

My original response way above was written before Wendy informed us that the Bylaws are an Exhibit of the CC&Rs. (1.5) "Bylaws" shall mean the Bylaws for the Association attached as Exhibit "C" hereto and incorporated herein by reference. To me, agreeing with others, that means that they only can be amended with 75% approval.

On this site, we've rarely, if ever, seen such a high % needed. We've seen in a few HOAs that the board can simply make amendments.

One piece of hope might be NC Non Profit law 55a, which says updating bylaws takes 51% of owners or if voting at a meeting 2/3 of the ballots cast as long as quorum is met. Does it state anything like "unless the governing documents say otherwise" or anything like that? "Unless the Bylaws state otherwise?" If it does not, then I'm thinking the state statute prevails.

Your HOA attorney also might have a different take on this entire matter. Perhaps, for instance, 75% approval is so much more difficult to achieve compared to what's standard and typical in NC HOAs, it's not in the best interests of the corporation to demand it.

(I do not agree that the Articles need 75% since the declaration's own Exhibit sets a smaller %.)

(I do not agree that bylaws are "rules" as Melissa maintains. Rules & Regs are usually a separate doc and often elaborate on the restrictions in the declaration or add rules if the declaration permits.)

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By WendyM5 on 07/07/2023 8:34 AM
Declaration made in 1995, Articles in 1996 and bylaws unknown. The only exhibit actually included in the Delcaration is Exhibit A a description of the map/land that makes up the HOA. Given that exhibit B and C have never been and were not orginally presented with the Declaration it is fair to say they were made afterwards IMHO.

Have you gone to the County Clerk's and confirmed that the recorded Declaration omitted inclusion of Exhibit C?

Are the current Bylaws recorded with the County Clerk?

SheliaH (Indiana)
Posts: 6,964

Posted:

Quote:

Posted By WendyM5 on 07/07/2023 7:09 AM
If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By ElleN on 07/07/2023 9:46 AM
Posted By WendyM5 on 07/07/2023 8:34 AM
Declaration made in 1995, Articles in 1996 and bylaws unknown. The only exhibit actually included in the Delcaration is Exhibit A a description of the map/land that makes up the HOA. Given that exhibit B and C have never been and were not orginally presented with the Declaration it is fair to say they were made afterwards IMHO.

Have you gone to the County Clerk's and confirmed that the recorded Declaration omitted inclusion of Exhibit C?

Are the current Bylaws recorded with the County Clerk?

In addition, are the bylaws on file with the North Carolina Secretary of State? Sometimes when a corporation is first established, the Declarant files both the Articles of Incorporation and the bylaws with the state's Secretary of state.

SheliaH (Indiana)
Posts: 6,964

Posted:

Whoops, sliced and diced a little too much.

You said "I dont' want 51% I want what NC 55a states which is 51% or 2/3rd approval when a meeting has quorum. Since our quorum is 1/3 that could be as low as 2/9th of the entire owners, which is pretty much a reasonable struggle given the apathy in the neighborhood. One of the biggest reason for apathy is becuase its hard to change anything. I'm not gonna increase apathy by requiring a 51% approval, something that has not been achieved in 26 years."

Ok, but that decision's not entirely up to you. You may have a 1/3 quorum for meetings, and I don't remember how many homes are in your community, but there's still the matter of getting that number there and then hoping they vote your way. If the apathy is as bad as you say, that may not be as easy as you think. If your quorum is, say, 50, you'll need to get that number to show up and then at least 38 will have to sign off on the proposal. There could be a problem if only 20 or 10 show up at the meeting, or only half vote to approve it.

You still haven't said what your board colleagues think of all this, and you'll need their help in drumming up support for a meeting and the vote. I hope someone's looking at the apathy issue to take a deep dive to find out why, because it may spell the difference between this getting passed or not going anywhere. There's no one answer - some people probably are frustrated that it's hard to get people to change and have given up, or the issue wasn't important to enough people, the message didn't get through or people were hostile to it, etc. Change is never easy and never happens overnight, nor do people automatically care about something just because you do (believe me I've walked down that road).

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

WendyM5 (North Carolina)
Posts: 1,522

Posted:

Quote:

Posted By SheliaH on 07/07/2023 10:13 AM

You still haven't said what your board colleagues think of all this,

One director told me via email me they will only come to the board meetings and doesn't have time for anything else. Other one who's main passion is violation inforcement pretty much feels the same way. It's only me really heading this up. But I do have the survey's to back up many changes that people want with much more than 50% support.

Only saving grace is NC allows electronic ballots and we can run an amendment ballot for months to get the needed votes. We dont' have to corral cats together on one night to accomplish this.

vis ta vie

WendyM5 (North Carolina)
Posts: 1,522

Posted:

Quote:

Posted By ElleN on 07/07/2023 10:03 AM
Posted By ElleN on 07/07/2023 9:46 AM

Posted By WendyM5 on 07/07/2023 8:34 AM
Declaration made in 1995, Articles in 1996 and bylaws unknown. The only exhibit actually included in the Delcaration is Exhibit A a description of the map/land that makes up the HOA. Given that exhibit B and C have never been and were not orginally presented with the Declaration it is fair to say they were made afterwards IMHO.
Have you gone to the County Clerk's and confirmed that the recorded Declaration omitted inclusion of Exhibit C?

Are the current Bylaws recorded with the County Clerk?

Still need to check with county clerk. Sec of State only has the Ariticles of incorporation available on their website.

vis ta vie

WendyM5 (North Carolina)
Posts: 1,522

Posted:

Quote:

Posted By SheliaH on 07/07/2023 10:13 AM
you'll need their help in drumming up support for a meeting and the vote. I hope someone's looking at the apathy issue to take a deep dive to find out why, because it may spell the difference between this getting passed or not going anywhere.

forgot to mention they generally vote to support what the community wants on the surveys I do, But I dont' expect them to knock on doors or do any of the leg work to get this passed.

vis ta vie

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By WendyM5 on 07/07/2023 11:14 AM
Still need to check with county clerk. Sec of State only has the Articles of Incorporation available on their website.

I advise: Call up the Sec. of State as well. Also see if what is at the web site has the Bylaws within it along with the Articles of Incorporation. Things were a bit more loosey-goosey in the 1990s and earlier (before the digital, paperless age compelled so many changes in the management of documents).

WendyM5 (North Carolina)
Posts: 1,522

Posted:

Quote:

Posted By KerryL1 on 07/07/2023 9:34 AM

One piece of hope might be NC Non Profit law 55a, which says updating bylaws takes 51% of owners or if voting at a meeting 2/3 of the ballots cast as long as quorum is met. Does it state anything like "unless the governing documents say otherwise" or anything like that? "Unless the Bylaws state otherwise?" If it does not, then I'm thinking the state statute prevails.

Yes it states unless the bylaws or Articles state a greater vote.

§ 55A-10-03. Amendment by directors and members.
(a) If the corporation has members entitled to vote thereon, then, unless this Chapter, the
articles of incorporation, bylaws, the members (acting pursuant to subsection (b) of this section),
or the board of directors (acting pursuant to subsection (c) of this section) require a greater vote or
voting by class, an amendment to a corporation's articles of incorporation to be adopted shall be
approved:

vis ta vie

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Several of our BOD Members are seat warmers but at least they are not obstructionists nor ankle biters.

WendyM5 (North Carolina)
Posts: 1,522

Posted:

Quote:

Have you gone to the County Clerk's and confirmed that the recorded Declaration omitted inclusion of Exhibit C?

Are the current Bylaws recorded with the County Clerk?

Went to the registry of deeds website. Was able to see all maps drawn out for our subdivision, the Declaration with Exhibit A which is a Map description, but no Exhibit B or C. The dates prove there is no way exhibit B and C could of been submitted with the Declaration, they were made afterwards.
Sec of State has articles of Inc. which were filed a few weeks after delcaration. No public record of bylaws I can find, other than our own HOA website.

vis ta vie

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Again by laws are NOT public documents. They do not require to be filed in most states. Although a copy maybe file with the CC&Rs. By laws are HOA documents internally.

Former HOA President

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By WendyM5 on 07/07/2023 12:26 PM

Went to the registry of deeds website. Was able to see all maps drawn out for our subdivision, the Declaration with Exhibit A which is a Map description, but no Exhibit B or C. The dates prove there is no way exhibit B and C could of been submitted with the Declaration, they were made afterwards.
Sec of State has articles of Inc. which were filed a few weeks after delcaration. No public record of bylaws I can find, other than our own HOA website.

Then I like the chances in court of anyone arguing that, for amendment of the bylaws, the statute (and not the Declaration) controls.

My reasoning is loose. I do not know if a court would buy it. I am aware of a court-made rule of "acquiescence" (as it applies to contracts). Reams of case law speak to "acquiescence" and its finer details.

Per the courts and the recording at the County Clerk's, all owners went in with eyes wide open. Owners knew the Declaration had omitted inclusion of Exhibit C. Despite the omission, owners knew the HOA was subject to bylaws. This is because statutes and the Articles of Incorporation (on file) say the HOA is subject to Bylaws.

For over two decades when owners read the Declaration, the owners had no set of Bylaws to which they could turn when the Declaration referred to the "Exhibit C."

But AFAIC just because the Declaration does not include a copy of the Bylaws here does not mean the Bylaws do not exist. For years, the owners have acquiesced to operating under the present bylaws. They have run elections, had meetings, submitted records requests and more, all per the bylaws (and state law). At the same time, owners also have treated the latter bylaws as a wholly separate governing document from the Declaration. They were "guessing" that the bylaws have legal authority.

Because of these facts, I say that legally the Bylaws do exist, and owners have consented for over 20 years to their use. In my opinion these Bylaws continue to have authority as a "governing document."

When it comes to the Bylaws, the Declaration currently holds a "big nothing" in Exhibit C. This means there is nothing to amend in Exhibit C. In theory the owners could vote to add the Bylaws as Exhibit C. But why bother? This other document, titled presumably "Bylaws," has been clearly alive and well at this HOA for two decades. All that's missing is what to do to amend the Bylaws. Fortunately the NC nonprofit corporation statute provides the means to amend.

This is my crude sense of the bottom line of what a court would say.

I do have a lot of confidence that the less competent HOA attorneys could make a lot of money off this situation.

WendyM5 (North Carolina)
Posts: 1,522

Posted:

Quote:

Posted By MelissaP1 on 07/07/2023 12:32 PM
Again by laws are NOT public documents. They do not require to be filed in most states. Although a copy maybe file with the CC&Rs. By laws are HOA documents internally.

great that will save us the headache of filing them.

vis ta vie

WendyM5 (North Carolina)
Posts: 1,522

Posted:

Quote:

Posted By ElleN on 07/07/2023 1:05 PM
Posted By WendyM5 on 07/07/2023 12:26 PM

Went to the registry of deeds website. Was able to see all maps drawn out for our subdivision, the Declaration with Exhibit A which is a Map description, but no Exhibit B or C. The dates prove there is no way exhibit B and C could of been submitted with the Declaration, they were made afterwards.
Sec of State has articles of Inc. which were filed a few weeks after delcaration. No public record of bylaws I can find, other than our own HOA website.

I do have a lot of confidence that the less competent HOA attorneys could make a lot of money off this situation.

Yep any attorney might take advantage of an ignorant client. the best I can tell the bylaws were made in 1999 3 years after the HOA was formed. that guess is based on the fact that the only copy we have is a faxsimile copy which has fall 1999 transmission date. It just has a generic bylaws of XXX HOA Inc as the title. No exhibit C or other words that tie it to the original declaration. I'll share this information with other board members. thanks

vis ta vie

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