Procedure for revising HOA covenants

Does anyone have any suggestions for a procedure for revising HOA covenants? What are your ideas about having the HOA attorney to first incorporate amendments into the coventants that have been made over a period of time and simultaneously collect Covenant committee suggestion for changes, incorporating those changes, as he reviews all infor. for legality. The attorney would have the whole document (covenant)re-reproduced with the changes in a draft for the Board to present to the residents for approval.

Roger writes:

>>>We recommend providing a carefully written explaination with the need for the changes to encourage approval by anyone who would not readily approve<<<

Roger,

Wouldn't it be more prudent to do this when a draft is prepared, prior to requesting Membership to sign off on the final version, to avoid a dealbreaker on one or more changes that could tank the overall revamp?

Assuming you are proposing multiple amendments, I would (in addition to the early feedback already suggested):

* Send only the proposed amendments with appropirate discussion of the proposed changes. The complete restated convenants is likely longer than most people will read , expensive to print and send, and it is irrelevant to them making an informed decision.

* Strategically group amendments together for voting purposes. Don't just try and get it all done in one vote where objection to one thing or a higher approval requirement scuttles the rest of the amendments. If any amendment requires a different percentage or different groups (e.g., of units or eligible mortgagees) to be approved, it should probably be voted on and grouped seperately. Some amendments that usually have a higher approval requirment are rental restrictions, changes to boundaries of a unit, changes to common expense liablity percentages for a unit. Non-controversial amendments, such as updating dollar amounts (to account for inflation) or making amendments to comply with applicable law (e.g., deleting sections that are no longer enforcable or adding sections on new state law requirements), should be grouped and voted on together. Controversial amendments should likely be voted on their own unless tieing two or more controversial ones together facilitates passage. In other words, in a mixed-use building, you may tie an amendment that a commercial unit really wants (but is deterimental to the residential units) with one the residential units wants with the hope the two amendments together are enough of a compromise that both amendments will be approved.

* If allowed under your governing documents, I would suggest a written ballot rather than ballots at a meeting of the membership. You have better chances of getting out the vote and at least getting enough ballots returned so that passage is theoritically possible. If not enough ballots are returned, the amendments will die.

* Finally, even though the Board is likely for the amendments, I would suggest that you be fair and offer both a view for/against the amendment. This leads to an appearance of fairness, reduces rumors/prevents polarization in the community, and an informed membership voting on the proposal. You should be able to get some sense of the opposition or unintended consequences from the early feedback meetings with the membership.

Shirley G2
Amending bylaws must be taken with the utmost care. The fairest way to amend bylaws is to have a document with the amendments directly under the language to be changed. Due to the complexity of the language, homeowners must be very careful not to let language detrimental to them slip in.
Here's a warning alert being sent to Maryland condo and HOA homeowners:

Homeowners, or a committee of homeowners, should review new wording thoroughly, comparing existing wording to new wording line-by-line. This works best by having old text and new text in different fonts or colors while reviewing the documents.

1. Beware of boiler plate documents that completely replace old documents with new, and often inappropriate, guidelines. Such documentation is currently in use by some attorneys.

2. Beware of language that states the homeowners should pay “all attorney fees actually incurred by the Board of Directors.” This wording obligates homeowners to pay for the Board’s attorneys’ fees, as well as their own attorney’s fees, even if the judgment is in favor of the homeowner. Such wording sets up a “no-win” situation for homeowners and could lead to bankruptcy and/or foreclosure for any homeowner unfortunate enough to be put into this situation. California has addressed this issue with Civil Code 1354(c) which states “in an action to enforce the governing documents, the prevailing party shall be awarded reasonable attorney’s fees and costs.”

3. Beware of documentation wording that gives the Board the ability to file a lien for unpaid fines and then foreclose on the property. Wording such as: “the Board shall have the power to impose reasonable fines which shall constitute a lien upon the property and shall be collected in the same manner as any other assessment levied against a unit owner…” should be avoided. Recently California and Florida have passed legislation to prohibit associations from including fines in a lien and fines may not be characterized, nor treated in the governing documents as an assessment which then becomes a lien. Arizona has passed legislation that an association can file a lien for unpaid fines, but the lien cannot be collected until the property changes ownership.