Interpretation Help

I am a newish BOD member in a small single family home planned community in AZ. This is the last paragraph in our declaration of CC&Rs. Nobody now on the BOD (or homeowners I have spoken with) know what it means. The "old timers" are all pretty much gone now. I welcome all comments on what this might mean. Thanks.

ARTICLE VII - TERMINATION OF DECLARATION

Section l. All of the covenants, conditions and restrictions contained herein shall continue and remain in full force and effect at all times as against the Owner of any portion of said Property, however his title thereto may be acquired, until the commencement of this calendar year 2013, and shall be automatically continued thereafter for successive periods of ten years each; provided, the Owners of a majority of the Lots subject to these restrictions may, by executing and acknowledging an appropriate agreement or agreements in writing for such purpose and recording the sale at any one time at least one year prior to March 1, 2013, release all of the Property so restricted from said restrictions or may release the property so restricted from said restrictions, said release to be effective March 2, 2013. During each successive ten-year after March 1, 2013, a majority of the Owners shall have the same power to release said restrictions to any Property then covered by said restrictions by executing, acknowledging and recording an appropriate agreement or agreements at least one year prior to expiration of said ten-year period, said release to be effective at expiration of said ten-year period.

Tom,

Off the cuff, I would say it means the CCRs will terminate in 2013 unless the members vote to extend them for another 10 years. However, I see a lot of ambiguity in the article. For starters, I'm not sure what it means by saying "his title thereto may be acquired" and at the end it says the "Owners shall have the same power to release said restrictions to any property then covered by said restrictions." This appears to mean that one property owner could be removed from the HOA, which is highly unusual. I really think the BOD would be very wise to obtain a legal interpretation of this article. The year 2013 is not that far off and the BOD must be prepared to take appropriate action at that time. If you are located in the Phx area there are quite a few HOA attorneys here. I can give you a recommendation if you like.

Tom,

I would stick with the 75% requirement if your looking to abolish the Declaration.

I understand how Mary, and others, on a first read could interpret the paragraph to mean that if nothing is done, the Declaration ends. This is just not the case. As I said, with any legalize you need to look at all of it together and also as individual sections/conditions within the same paragraph. This is where a lot of the if/then/else statements (if a happens then b else c) are contained and can be easily overlooked. The paragraph is very clear in stating that the document automatically renews every 10 years unless the members vote otherwise at least one year prior to the renewal date.

You should also know that abolishing the Declaration of Covenants Conditions and Restrictions does not abolish the HOA. That is a separate process. If you have common area to maintain and can't get someone else to maintain it you can't ever really abolish the Association.

If you have the money, it never hurts to get a legal opinion.

If the Board is not considering abolishing the document then I honestly wouldn't even worry about it since it does auto renew. If you are looking at amending the document, this can be done at anytime and not just at the 10 year mark.

Hope this helps and give it some more time, I'm sure others will offer their advise as well.

Tim

Tim,

You are right; upon re-reading this bit of legalese I see that I made a mistake. The CCRs will automatically roll over for another 10 years unless a majority of the prop owners vote to terminate them. If the members are to take such action it must be done one year prior to the termination date of 2013. But, there is so much ambiguity in the whole article that I really think the BOD needs to consult an HOA attorney. For starters, what is mention of "sale of property" all about? And, certain wording sounds as though an individual member can opt out of the CCRs.

Bottom line: This article is very poorly written. If the BOD decides to obtain a legal opinion they may also want to ask the attorney to re-write the whole article then take steps to have the CCRs amended.

FYI, this is how my CCR article is written:

"This declaration shall be effective upon recordation thereof. As amended and supplemented from time to time, this declaratin shall continue in full force for a period of 20 years. From and after said date, this declaration shall be automatically extended for successive periods of 10 years each. This declaration may be terminated at any time if 75% of the votes entitled to be cast by the voting owners shall be cast in favor of termination at a meeting held for such purpose. If the necessary votes are obtained, the board shall cause to be recorded with the County Recorder of XXX Co a certificate of termination duly signed by the president or vice president and attested by the secretary or assistant secretary of the assn, with their signatures acknowledged. Thereupon this declaration shall have no forther force and effect, and the assn shall be dissolved pursuant to the terms set forth in its articles. So long as the declarant owns any lot, any termination of this declaration must be approved in writing by the declarant in order to be effective."

IMO this article is very good example to look at as it is easy to read and understand.