Allowing Bylaws to Define Occupancy Requirements

I checked the Idaho HOA Act and the Idaho Nonprofit Act for what they say about bylaws and covenants. I think I now HOPA better than the average bear.

I would change the wording of the (granted very rough draft of the above) proposed amendment a lot. The wording in the proposed amendment needs to be clear that under no circumstances will the percentage requirement be such that the HOA reverts to a non-HOPA community. Given what people signed up for when they bought a home in this HOPA community, allowing HOPA status to be thrown out via amendment of the bylaws is legally a bridge too far.

If you want the wording I would use, feel free to ask. Otherwise at present and FWIW, I approve of what you propose here.

If someone here utters a profundity (especially of a legal nature) that changes my mind (about using a bylaw to change the percentage et cetera, with authority from the Declaration), I will post back.

What I understand about the purpose of bylaws is to set down the methods of governance of the HOA. Such a purpose can be found by Googling "Purpose of HOA Bylaws."

Restrictions about the occupancy of residences, if any, are in the CC&Rs. If permitted by the CC&Rs, elaborations, clarifications, and even "changes" (that don't conflict with the CC&Rs) about occupancy are in an HOA's Rules & Regulations (which are a governing document in my state).*

You might, CjP, be able to make a "Rule" about occupancy that refers back to and gives precedence to an Article/Section in your CC&Rs that gives the HOA more flexibility. But, your Board must consult with your HOA attorney.

If owners have been been on the same page about changing the age-requirements in the CC&Rs with little contention, perhaps a final CC&R on the topic wouldn't be too difficult or expensive to implement. Perhaps something like: "At its discretion, the Board, with written owner input, etc., may change the occupancy-age limits of this article every two years by way of a Board rule (or resolution). Or similar. Again, an attorney's advice on wording is crucial with, obviously, HOPA also in mind.

*There was no restriction in our CC&Rs about short-term rentals. The Board made a Rule that leases must be a minimum term of 30 days. We also added a very hefty fine for STVRs. A few years later, when we restated our C&Rs, our GC advised us to place the 30-days restriction in our CC&Rs

Thanks, Kerry. Although Idaho's HOA Act includes Rules that can be part of our governing documents, our particular HOA has never written any Rules. We do have Policies, but those mostly just reiterate verbiage already in the CC&Rs. Rules and Regulations might be something we could consider implementing.

Ellen: Ahh, yes I did misunderstand your post. We are not looking to give more power to the Board to amend the Bylaws. We would still require 2/3 of the homeowners to approve of any changes to Bylaws, including the section about the occupancy requirements we're considering adding. I really like your wording. Excellent feedback.

Yes, CjP, since occupancy matters do not fit the purpose of bylaws, they are either in the CC&Rs, if required BY the CC&Rs, or might be in the Rules & Regs., which most HOAs we've seen here seem to have. You could start with the verbiage that Elle suggests, but eliminate "Bylaws, as incorrect. To avoid giving the board too much power. over this matter, perhaps a Rule could be made that requires 2/3 votes of paaroval, or place it within some sort of "final" CC&
Rs. Attorney's advice rally needed!

Do
google "Purpose of HOA Bylaws,"

Most common are rules about architectural guidelines. Doesn't such a document exist in your HOA? Google Rules in HOAs to see how useful they are and typical examples.

I hadn't thought about it till now, but would a board member, who's a landlord, have to be recused from voting on this matter? Attorney, need, imo.

Do you have the abillity to fine or have a fining schedule? It is one thing to have the rule. It is another to enforce it.

Oh, forgot about this one. I do think I misunderstood CJP at first. And maybe I still do?

I'm thinking that solely the CC&Rs need to be amended to (attorney's wording required here) permit 2/3 of owners (or a simple majority) to change CC&R art.. x, Sect. xxx to.....

I must be missing why it's thought that the Bylaws are the right place for the. topic.

As with other matters that owners may vote on, annual elections, etc., it's simply in the CC&Rs. Standards, policies or rules about occupancy do not belong in the Bylaws.

I'm really hoping you'll supply the attorney's opinion on this matter to this forum, CjP!

We are 51% to change a Bylaw. 2/3rds to change a Covenant.

Elle wrote: "The whole point of CjP2's inquiry was to see if the percentage could be set via a lower vote of the owners, and achieve this by allowing the number to be set by an amendment to the bylaws, voted on by the owners and only the owners."

CjP wrote: "We would still require 2/3 of the homeowners to approve of any changes to Bylaws, including the section about the occupancy requirements we're considering adding."

Since you'd require 2/3 of owners to approve and since you're amending your CC&Rs, there is no reason why the amended wording cannot be in the CC&Rs alone. What would be the purpose for also placing it in the Bylaws? The Board would simply refer to this amended CC&R section if considering changing the occupancy requirement and have owners vote.

The reason I'm pressing that this should not be in the Bylaws is because the purpose of Bylaws is NOT to restrict owners' use of their homes.* That's in the CC&Rs. The restriction might be elaborated on in an HOA's Rules & Regulations.

We had 2-3 inquiries on this forum that week where the posters clearly had Bylaws & Rules & Regs confused. I'd say this is the most common source of confusion that I've seen over the years on this forum.

The below is a blog; however, there are many many more formal but readable articles about the difference between bylaws & Rules & Regs on google. https://www.buildidaho.com/blog/what-are-ccrs-hoas-bylaws/ "What's the difference between HOA's, CC&Rs, Bylaws, and Rules & Regulations?"
Posted by Andrew Satterlee, June 2, 2023.

"CC&Rs are Covenants, Conditions & Restrictions, which cover the rights and obligations of the HOA to its members and vice versa. They are basically the rules of the neighborhood. Their main objective is to lay out rules to protect, enhance, and preserve property values in the community." "In addition, CC&Rs can have very specific rules...usually specific to the community."

"Bylaws outline the governance structure for the HOA. This includes election cycles, board member eligibility, as well as the duties and responsibilities of HOA board members." "If you want to be elected to the board, details are found in the bylaws." NOTE: nothing about how one's home may be occupied used, maintained, etc., is in the Bylaws. If the and say, AR, matters are in the Bylaws, they should be moved to a rules document as guided by HOA counsel.

"Rules & Regulations are the other, smaller rules that may not be expressed in the CC&Rs that are most easily changed."

Owners are confused easily enough about aspects of HOA's governing document without inappropriately placing "rules" about homes' occupants in the bylaws. Maybe not illegal, but certainly messy.

I support the amendment.

* Or residents' conduct in the common areas, or paint color & windows covering on this homes, yard maintenance, parking, etc. etc.

Kerry wrote: "Since you'd require 2/3 of owners to approve and since you're amending your CC&Rs, there is no reason why the amended wording cannot be in the CC&Rs alone. What would be the purpose for also placing it in the Bylaws? The Board would simply refer to this amended CC&R section if considering changing the occupancy requirement and have owners vote."

One of the main reasons we're considering adding occupancy verbiage to the Bylaws and amending the CC&Rs to point to that governing document is to make it easier for future residents to change the occupancy requirement. Ten years from now if the economy tanks and owners are unable to sell their homes because 100 percent of the homes must be occupied by at least one person over 55, it would be much easier to amend the Bylaws to change the percentage of occupancy to 90 or 80 percent instead of amending the CC&Rs to accommodate that situation. Later, if residents want to change it back to 100 percent occupancy, that would be easier as well. Allowing that flexibility in the Bylaws (that don't need to be filed with the Secretary of State) instead of the CC&Rs seems like a positive thing.

In any case, our first step is to consult our attorney to make sure this is even possible or recommended, and we plan to do that in the next several weeks. I will post the results if anyone is interested.

Thanks, everyone, for your valuable perspectives.

Follow Up:
A gentle reminder, this is not legal advice. Every situation is different, and readers should consult their own attorney for legal expertise. This is just an outcome I experienced in my particular case.

We posed this question to our attorney, and he had a few reasons for keeping occupancy requirements in the CC&Rs instead of in the Bylaws.
(1) Changing the occupancy percentage is a change to the Lot use. CC&Rs are recorded with the state, and a recorded document provides a better resource in case of disputes.
(2) Idaho does not require Bylaws to be recorded with the state, so new owners might not be aware of the Bylaws until after they purchased the home. To provide copies of the Bylaws before a sale, it would be up to the seller to provide a potential buyer with copies of that governing document if they remembered to do that.
(3) Our Bylaws require a majority vote from members to amend, and our attorney did agree that made it easier to amend than the CC&Rs. In some cases amending the Bylaws only requires Board approval, and that could be a potential issue for members if an occupancy percentage could be changed without their approval.

We are following our attorney’s recommendation to keep the occupancy requirements in our CC&Rs.

Thank you again for all your input.

Because of frat houses...

Thank you very much, CjP2, for the update!