All homeowners associations think about amending HOA governing documents every now and then. But, when done improperly, the process and its results can be disastrous. On the other hand, when done correctly, it can clarify vague provisions and reform outdated rules.
Important Factors to Consider Before Amending HOA Governing Documents
Amending HOA governing documents is no simple task to accomplish. Many HOA board of directors assume that they will be able to modify the governing documents of their HOA without any issue. However, the process can be quite complex. This is why it is essential to understand the requirements to avoid common pitfalls and unnecessary delays. If your HOA board of directors is considering amending HOA bylaws, keep the following in mind:
1. Understand the Complexity of Updating HOA Governing Documents
HOA governing documents are created when the community is originally constructed. For this reason, they typically have provisions that are common for the time period. As a result, older communities usually have more outdated documents that require modernization.
Attempting to amend any part of the HOA governing documents can be a long and costly process. And, even when the process is complete, the HOA board may not have the votes needed to approve the amendments. By accepting this fact before even beginning, you can go into the process with reasonable expectations.
2. The Timeline of Amending HOA Governing Documents
Amending homeowner association covenants involve a multi-step process. HOA boards that want to amend their association’s governing documents must first identify the reasons for the amendments. After identifying the reasons for the amendments, they need to determine any statutory requirements and additional voting requirements.
The HOA board must then decide the process of voting and solicit owner feedback on any proposed amendments. Once the board makes necessary preparations, the vote will need to formally occur. To pass, the HOA must obtain a majority vote stipulated in the governing documents of the HOA.
Should the vote be successful, then the amendments must be formally recorded with a notarized signature. If the board requires any additional governmental approvals, it must obtain them. The last step is to record the amendments with the county recorder. All in all, the process should take about 2 to 4 weeks.
3. The Importance of Identifying the Reasons for the Amendments
Many HOA boards make the mistake of not communicating to homeowners the reason for amendments.
To avoid this issue, the HOA board must meet to have a clear understanding of why they are attempting to modify the governing documents and how their residents would potentially benefit from the changes. By having this preliminary discussion, the HOA board will have a better chance of passing the changes that they are trying to make.
While there are many common reasons to amend HOA governing documents, most have to do with ambiguous provisions, legislative changes, outdated provisions, removal of declarant language, changes to the community demographic, and the adding or removing of restrictions.
If the HOA board of directors can sway a higher percentage of owners to vote yes, their proposed amendments to the HOA governing documents will have a higher chance of success.
4. Have a Clear Understanding of What Is Required for a Vote to Be Successful
Amending HOA covenants will require a vote in favor between 65% to 75% of the entire ownership. Typically, homeowner association bylaws amendments will require a majority vote of the owners. At times, the laws of specific states will require different additional approval requirements.
For example, some states may require above a 75% majority to amend HOA governing documents. Meanwhile, others may require the majority vote of the HOA board to remove discriminatory provisions from the HOA governing documents. Make sure your HOA board clearly understands the particular local requirements so that there are no additional delays.
5. Consider How the Voting Process
Many residents do not have time to attend a scheduled vote. Even if the residents view the changes as worthwhile, there will always be scheduling conflicts. As such, the HOA board must go with a method that encourages resident participation.
While many HOAs stick to paper ballots, having an online ballot arranged will encourage higher resident participation. This will help obtain the desired results of getting the proposed amendments approved.
Be sure your HOA board has considered which way residents can participate with ease and what the time period of voting should be to ensure residents have sufficient time to participate. Having automatic email or text message reminders is an excellent way to increase online participation should your HOA board of directors decide to utilize an online voting system.
6. Understand the Process of Finalizing and Recording
After approval of the amendments, it is time for signature and recording. In certain instances, the state or a governmental authority must receive and approve the amendments.
Normally, to enforce the amendments, they should contain references to the original documents. Amendments must also undergo notarization before filing them with the county recorder’s office. Even after a successful vote, any amendments that are not recorded with the county recorder’s office remain ineffective.
7. Consider Hiring an Attorney
Amending HOA governing documents is a time-consuming and often perplexing process. It requires a certain level of expertise and sufficient background to accomplish without trouble. While an HOA board can attempt to do it themselves, they will soon learn that expert advice is necessary.
When revising your governing documents, it is best to hire an attorney to help with the process. An attorney can easily identify any conflicting provisions — whether new or existing — and recommend any remedial actions. Additionally, an attorney can provide legal advice and inform you when certain clauses are in breach of state or local laws.
Make Necessary Amendments Smoothly
Whether you like it or not, amendments are a natural part of running a community. Some provisions are just too outdated to implement, and it is not advisable to simply ignore them when enforcing rules. Amending HOA governing documents is not as easy as it seems, though. You must take a lot of items into consideration and devote ample time to complete the project. But as long as you follow these tips, you should be good to go.
If you are still facing problems with amending documents or any other HOA-related issues, consider hiring an HOA management company like us. With professional help, your HOA can continue to thrive. Reach out to us today. Fill out our online contact form or give us a call at (855) 238-8488.
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