Where and how to file updated CC&Rs

Started by ChuckB2 • 17 replies • 6577 views

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ChuckB2 (Washington)
Posts: 14

Posted:

I live in Washington State and our HOA has just made modifications to the CC&Rs with overwelming support from the homeowners.

Does anyone know how we file the changes (what documents, etc.) and whom we file with? I have looked around on the Washington State and Thurston County websites but haven't found the answer.

SusanW1 (Michigan)
Posts: 5,202

Posted:

Start here: call them if necessary to find out.

http://www.tre.wa.gov/Rev/rd_toc5.htm

SusanW1 (Michigan)
Posts: 5,202

Posted:

Here's another one

http://apps.leg.wa.gov/rcw/default.aspx?cite=64.38

MaryA1 (Arizona)
Posts: 7,043

Posted:

Chuck,

In most instances the CCRs and any amendments are filed with the Co. recorder of the co. in which the HOA is located. This should be addressed in your CCRs under the article entitled "Amendments".

ChuckB2 (Washington)
Posts: 14

Posted:

I am going to contact the County Recorders office tomorrow. Nothing in our CC&R says where or how changes to the document are processed.

Thanks All

Chuck

GlenL (Ohio)
Posts: 5,491

Posted:

And after they're filed copies have to go to all the mortgage holders who may or may not approve the changes and agree to be bound by them. Depending on what is in your CC&R's about amending, WA state law and the contract the H/O has with the mortgage holder.

Studies show that 5 out of 4 people have problems with fractions

ChuckB2 (Washington)
Posts: 14

Posted:

GlenL

Thanks for your reply but the part where each mortgage holder has to agree doesn't make sense. If you are talking about the banks. If you mean the person that bought the property and has a mortgage then that has already been done. I think you mean the banks.

Contacting 40 mortgage holders and a bunch of second holders would be extremely time consuming and difficult. How many have to say no before we are prevented from changing the CC&Rs? What if few of them even reply? What constitutes a quorum of mortgage holders?

I am pretty darn certain that my mortgage holder didn't even look at the CC&Rs before providing the money when we bought the house a couple of years ago.

Our existing HOA records don't show where any mortgage holders were polled when the current restated CC&Rs were put into place.

If such a requirement exists it would make it extremely difficult to change the CC&Rs to start with.

What I found in the Washington State law regarding HOAs only says that the mortgage holder (i.e., bank) has the right to inspect our records. Since we could, theoretically, forclose on someone for not paying their assessment this would make sense.

We will, however, take a careful look at this angle.

Thanks

Chuck

GlenL (Ohio)
Posts: 5,491

Posted:

Chuck it all depends on what is in your documents regarding amendments and in the H/O's mortgage and any governing law. This is what ours says:

Section 14.15. Amendment of Declaration and By-Laws. This Declaration and the By-Laws attached hereto as Exhibit C may be amended upon the filing for record with the Recorder of County, of an instrument in writing setting forth specifically the item or items to be amended and any new matter to be added, which instrument shall have been duly executed by the Unit owners entitled to exercise at least seventy-five percent (75%) of the voting power of the Association. Such Amendment must be executed with the same formalities as this instrument and must refer to the volume and page in which this instrument and its attached exhibits are recorded and must contain an affidavit by the President of the Association that a copy of the amendment has been mailed by certified mail to all mortgagees having bona fide liens of record against any Unit ownership.

No amendment shall have any effect, however, upon a bona fide first mortgagee until the written consent to such amendment of such mortgagee has been secured. Such consents shall be retained by the Secretary of the Association and his certification in the instrument of amendment as to the names of the consenting and non-consenting mortgagees of the various Units shall be sufficient for reliance by the general public. If less than all mortgagees consent to an amendment to this Declaration and / or the By-Laws attached hereto as Exhibit C said amendment or modification shall nevertheless be valid among the Unit Owners, inter sese, provided that the rights of a non-consenting mortgagee shall not be derogated thereby.

No provision in this Declaration or By-Laws attached hereto as Exhibit C may be changed, modified or rescinded, which, after such change, modification or rescission would conflict with the provisions of Chapter 5311, Ohio Revised Code, nor may any amendment be made to the percentage interests set forth in Section 3.3(B) without the prior unanimous approval of all Unit owners and their respective mortgagees, except as provided in Article of this Declaration.

(inter sese - Lat: among or between themselves; commonly applied to trust instruments to signify that only the rights of shareholders and trustees are involved.)

Studies show that 5 out of 4 people have problems with fractions

MaryA1 (Arizona)
Posts: 7,043

Posted:

Glen,

This is how my CCRs read with regard to amendments and notification to mortgage co's, etc.:

"Section 14. FHA/VA Approval. So long as there is a Class B membership in the assn, the following actions shall require the prior written approval of the Fed. Housing Admin or the VA: annexation of additional properties, dedication of Common Areas or an amendment to this Declaration."

Note that class B membership means the developer; therefore this requirement only pertains to the time of declarant control.

There is nothing in the CCRs which state the assn must notify each mortgage holder of an amendment to the CCRs. It only states that the amendment must comply with the "rules, regulations and requirements of the VA, the FHA, the Fed National Mort Assn and the Gov. Nat'l Mortgage Assn, the Fed Home Loan Mort Corp and any other similar agency" but ONLY if the assn or the declarant wishes to seek approval for purposes of financing or mortgage guarantees. No requirement that any of these agencies must receive a copy of the amendment.

I would suggest thoroughly researching the gov. docs to find out if there is a requirement to notify all the mortgage co/banks. This really seems to be far reaching to me, not to mention possibly impossible.

GlenL (Ohio)
Posts: 5,491

Posted:

Mary if you re-read my posts that is exactly what my advice to Chuck was - to follow what HIS documents and any applicable law says. I only included our section to give him an idea of the type of language to look for.

Studies show that 5 out of 4 people have problems with fractions

MaryA1 (Arizona)
Posts: 7,043

Posted:

Sorry, Glen. Didn't mean to parrot what you said. We may have been posting our messages at the same time. Can't go by the time that is shown on the message.

GlenL (Ohio)
Posts: 5,491

Posted:

Quote:

Posted By MaryA1 on 05/08/2008 9:12 AM
Sorry, Glen. Didn't mean to parrot what you said. We may have been posting our messages at the same time. Can't go by the time that is shown on the message.

Mary I didn't think you were parroting me. I took your post to mean that you thought I was saying this is the way it has to be done when that wasn't what I meant at all. Sorry I didn't mean to go all Harold on you.

Studies show that 5 out of 4 people have problems with fractions

ChuckB2 (Washington)
Posts: 14

Posted:

Glen
Mary

I really appreciate your replys and the detail. They really help put this situation into focus.

It appears that the intent of Ohio law is to keep a HOA from making a covenant change that affects the mortgage company negatively and gives them the ability to not agree with the changes. That makes sense now. It also appears that changes that are not approved my the mortgage company still have an effect on the home owner.

In our case, our modifications do not add any new requirements but do delete and change the wording of others. Nothing is made more demanding than it was originally. A lot of words that were directly related to the developer were removed as well as words that gave specific people power over the HOA. The developer is gone (bankrupted) and the named persons are no longer present in the community. The original CC&R was desiged to protect the neighborhood during development and the selling of the homes. When the last home was sold the CC&Rs were changed slightly but the developer retained control until none of them were lot owners. Consequently our CC&R was really outdated and contained a lot of meaningless protections for the builder. Also, some of our changes specified how displaying the American flag and political signs may be done and how basketball hoops may be installed. The flag and political signs were added because Washington State mandates that they be allowed but they say the HOA can specify there use. For example, we don't allow LED flags in windows and we limit the length of time before and after an election a political sign may be displayed.

Our lawyer will review our changes and advise us on what we need to do. I have found nothing in Washington State law that directs us to contact the mortgage companies for approval. That doesn't mean it doesn't exist, just that I was not able to find it.

This is truely one of the best forum I have used, and I have used many for various reasons.

Thanks

Chuck

RogerB (Colorado)
Posts: 5,067

Posted:

Chuck, some Declarations require approval of amendments when there are significant changes, such as selling land and amenities, annexing more property, or other big ticket financial items. Other Declarations may be written to require all owners to approve by a % such as 2/3 and mortgage companies to approve by a majority. It is difficult to get this many owners to approve and almost impossible to get mortgage companies to approve if this is required. If your Declaration requires approval of mortgage companies it may require going to court to change that requirement.

RogerB (Colorado)
Posts: 5,067

Posted:

Add "mortgage company" after .. require .. in my first sentence.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Glen,

Believe me, never would I confuse you with Harold! LOL Frankly I'm still getting used to this forum's format. I hate not being able to see the message I'm responding to! :-(

MicheleD (Kentucky)
Posts: 4,491

Posted:

If you click the "Reply" button in the upper right-hand corner of the message to which you want to reply (right next to the "quote" button), it puts the text of that message just above the blank "Body:" box that you'll be typing your reply in.

At that point, you can copy and paste from that content, as well.

(like this:

Posted By MaryA1 on 5/8/2008 8:46:12 PM
Subject: RE: Where and how to file updated CC&Rs
Message: Glen,

Believe me, never would I confuse you with Harold! LOL Frankly I'm still getting used to this forum's format. I hate not being able to see the message I'm responding to! :-("

If you just hit the Add Reply button at the bottom left of the message thread, then you will have to put the check mark in the little box next to "Show Replies:" (under the "Submit" and "Cancel" buttons) and it will then put all the thread below the box.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Chuck,

You said: "This is truely one of the best forum I have used, and I have used many for various reasons." I couldn't agree with you more. SO many knowledgeable people posting and doing so in such a pleasant way is really refreshing. So unlike most of the internet message groups and, I too, have been on many of varied interests. Kudos to everyone here! :-)

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