Change Bylaws Voting percentage to reduce investor ownership power

The bylaws and covenants are considered contractual terms. People bought into this condo association based on these contractual terms.

The courts say amendments need to be reasonable. A court might very well say that taking away the above important voting rights from a minority is not reasonable and would require 100% consent of the owners (regardless of what the amendment sections of the bylaws and covenants say).

Your board should get the advice of counsel. Why? To prevent expensive litigation.

First off, is your community an HOA, condo association, or other? I'm going to assume you're in condos since you refer to "units".

The board needs to consult with the association attorney. Your options will be limited by state law and what's currently in your governing documents.

They also will also be limited by your community's demographics. Even for changes that are consistent with current state law, homeowners will have a say in what happens. And the percentage needed to approve a new or revised rental restriction can be high (super-majority). Changes to voting percentages typically require unanimous approval - because if somebody's percentage changes, everyone else's needs to change as well (assuming you're in condos). If you don't have the votes, it won't matter how good an idea it is - it's not happening.

FWIW, my community tried something like this last year. The board at the time wanted to lower the percentage for a certain type of change that required unanimous approval in order to change our rental restriction that already only required 75% approval. The end result, if the first change would have been approved, would have been lowering the guardrails protecting us from some undesirable consequences. ** And it would have done nothing to help us approve an amended rental restriction - because we didn't have the necessary votes. ** We would have been worse off than we started. Fortunately the first change was not approved - we just paid our lawyer for a useless effort.

Long story short: be careful and listen to your attorney.

I agree, consult with an attorney.

Additionally, such a change might only apply moving forward and those individuals would be grandfathered in until they sold.

Expecting 2/3 approval to change the CC&Rs, you would need 32 lots to agree in order to amend the covenants.
Per your posting, those individuals own 17 units out of the 48. Therefore, it is unlikely such an amendment would be approved without the support of at least one of the multi unit owners.

In California, covenants are not contractual terms, they are equitable servitudes. Not sure about Florida.

substantive

For Californians reading about the enforceability of covenants:


Equitable servitudes permit courts to enforce promises restricting land use when there is no privity of contract between the party seeking to enforce the contract and the party resisting enforcement. Like any promise given in exchange for consideration, an agreement to refrain from a particular use of land is subject to contract principles, under which courts try 'to effectuate the legitimate desires of the covenanting parties. When landowners express the intention to limit land use, that intention should be carried out. (Nahrstedt v. Lakeside Village.)

California courts have made clear that enforcing covenants is easier than enforcing a breach of contract. This is a good thing.