For HOAs to run the safe and comfortable community they establish, they need guidance and structure. This guidance comes from rules. The rules are written into governing documents. There are usually at least three different governing documents, which can confuse every HOA board. They were all written at different points in the development of the association and have different purposes. So it makes sense that there will be times each of the documents will need to be updated. Just like each document is unique in what they do, they are unique in how it can be changed.
It all can seem complicated and within each different association issues will come up that need to be ironed out. We’ll go over the impact of each document and what that means for how they can be changed or amended.
Making Changes to Governing Documents
There are several documents involved in setting up an HOA. The governing documents are the most likely to need revisions. These include the Declaration of Covenants and Conditions and Restrictions (CC&Rs). The two outline rules for the property. Also, there are Bylaws that layout how to implement rules day-to-day; and the Rules or Regulations, which provide more detailed operating rules.
At some point, these documents will need entire rewrites and/or changes to specific sections. There might be changes to a state law or new needs of the community. Experts recommend revising the documents every 5 years, but you’ll likely have to make some changes before then.
One thing that helps when you’ve decided to change your governing documents is that the process should already be outlined in your CC&Rs. The documents’ governing power is structured in a hierarchy and the documents at the top of the chain require the most support for changes. One helpful way to understand it is to compare it to the law. Like the U.S. Constitution is the most difficult to change, an HOA’s CC&Rs are the most difficult. This is because they are at the top of their respective hierarchies.
Changing Governing Documents – Rules or Regulations
The easiest document to change is the Rules and Regulations. Usually, changes to the rules require a vote by the board and notice to the homeowners. However, conflicts have occurred because homeowners were not aware of rule changes. Being as open and communicating both before and after the vote will benefit everyone. It probably isn’t a requirement in your association but is good practice for the community. It gives homeowners a fair chance to follow new rules and lets them have their voices heard.
Changing Governing Documents – Bylaws or CC&Rs
Bylaws and CC&Rs can only be changed by a majority of the association members. The size of a majority needed can be different from HOA to HOA. Some require a simple majority of 51%, while some communities require a supermajority vote of 67% support to pass. Your CC&Rs will give you this information for your association.
Since you’ll need the community to vote on changes to the Bylaws or CC&Rs, there will be at least one open meeting for the homeowners to weigh in on the proposed change.
What can be more challenging and cost some money is figuring out the exact language changes. Because your governing documents have legal implications you need an attorney’s help with any of these documents. These documents protect board members from lawsuits, impact board options for pursuing late payments, etc. You can first determine what you want to achieve and draft plain language. This will help the attorney determine the exact change that needs to occur in your governing documents.
More specifically, making changes to CC&Rs would usually follow these steps:
- The HOA board raises making a change to the CC&Rs.
- A scheduled meeting allows homeowners and board members to discuss the proposed change.
- A secret ballot is sent out to homeowners to vote.
- The change passes or fails based on the percentage required in the CC&Rs. And a minimum number of ballots have to be returned for the vote to count.
- If approved, all homeowners will receive an amended version of the CC&Rs.
- The County Recorder’s office records the CC&Rs amendment.
- And finally, the bylaws should also be amended to coincide with the CC&Rs.
What to Do About State Law Changes
Unfortunately, one thing that is out of your control as a board member is when your state changes its HOA laws. And which laws they change. Some states amend their laws frequently. This can become very time-consuming for association boards. They’ll have to determine if the change to state law means they need to amend their governing documents. And if the association has been impacted, which documents need to be changed and how are they going to be carried out? The governing documents will only apply to homeowners if the rules follow state law. So the association needs to keep up with state changes. It also can take up a lot of the board’s time and energy.
To avoid all this, some HOAs include the “Kaufman” language in their governing documents. Furthermore, when there’s a newly passed state law, the language basically means that the HOA governing documents will have automatically amended accordingly to incorporate the new law.
Final Things to Consider When Making
Making changes to your association’s governing documents is not usually fast or free. The board will want to really think about why you want to change them, particularly for the CC&Rs.
Making any changes to the documents will also cost your association money. You will need to hire an attorney to review and edit any language and possibly provide guidance. Also, there could be a cost associated with notifying and sending ballots to all of the homeowners. These are all considerable things to think about.