Is It Time to Amend Your Documents?

Is It Time to Amend Your Documents?

As the saying goes, change is the only constant in life. This fact applies equally to boards of directors of community associations who are tasked with operating their communities consistently with existing governing documents, even if those documents no longer fit the needs of the community or no longer comply with existing laws.

Interestingly, we are reminding you of this fact at this time not because of changes which did occur, but instead, as a result of a proposed bill which would have severely limited homeowners from adopting future regulations dealing with renting and leasing in their communities. This includes the regulation of short term rentals such as AirBnB and VRBO. While this bill failed in 2019, we fully expect that it will again be voted on next year.

One bill that passed this year prohibits counties and cities from regulating vegetable gardens on residential properties. While the new law does not stop community associations from passing amendments or regulations related to vegetable gardens now, it could very well be amended in the future to also prevent community associations from passing a rule requiring vegetable gardens be planted in the backyard of lots, for example.

As the leaders of your communities, you should occasionally review your documents to ensure that they are consistent with both the existing scheme and vision of the community and the laws which apply to the community.

The general question of whether Governing Documents should be amended has no correct answer. Instead the board’s investigation should consider many factors, including the following:

  1. The age of the Governing Documents. For instance, how many laws have been amended since the documents were created?
  2. The existing scheme of the community. For instance, do most owners now have small children; what is the existing mix between owner occupants and investor owners?
  3. The operation of the association. For instance, should there be more or less board members, does the quorum requirement need to change?

Now is a perfect time to review and make appropriate changes, if necessary, and to get in front of some of the proposed legislative changes which did not pass this year but will come up again in the near future.

Enclosed please find a “General Amendment Checklist” to assist you in this endeavor. We also suggest that you consult with your association’s attorney to identify key provisions in your Declaration, Bylaws, Articles of Incorporation, and/or Rules and Regulations that should be removed or amended to reflect the current law and present needs of your association.

As always, Becker would be happy to work with your board to ensure that your governing documents are not only comprehensive and up-to-date but also ahead of the game on the issues that matter most to your community.

 

GENERAL AMENDMENT CHECKLIST

  1. General Provisions and Definitions
    • Does your Declaration define important words and phrases such as “short-term rental,” “guest,” and “single-family residence”?
    • Should your amendment process/procedure be amended to make it easier to pass proposed changes?
  2. Association Maintenance Responsibility and Owner Maintenance Responsibility
    • Does the current Declaration clearly define the maintenance responsibilities of the Association and owners for such things as landscaping, shared walls or other shared amenities?
    • Does your Declaration contain an “incidental damages” clause?
    • Does your Declaration allow for self-help procedures for abandoned or vacant properties?
  3. Collections and Assessments
    • Does your Declaration contain language which automatically incorporates statutory changes to Chapter 720 (HOA) or Chapter 718 (Condo) (“Kaufman Language”)?
    • Does your Declaration allow you to charge the highest allowable interest rate and/or late fees when an owner becomes delinquent?
    • Does your Declaration entitle you to pre-suit attorney fees and costs for collections enforcement?
  4. General Use Restrictions
    • Do your Governing Documents limit the type and amount of animals allowed to occupy a unit or household?
    • Do your Governing Documents prohibit smoking while on association property?
    • Do your Governing Documents regulate where and what type of landscaping is allowed on Lots?
  5. Bylaws and Other Governing Document Amendments
    • Should the date and time of the annual meeting be amended to reflect updated preferences and practices regarding the same?
    • Should the number of director positions be amended?
    • Should the quorum threshold be lowered to make it attainable based on current owner participation?
  6. Board and Member Meetings & Official Records Requests
    • Has your board adopted rules governing the frequency, duration, and other manner of member statements during board and member meetings?
    • Has your board adopted rules governing the frequency, time, location, notice, records to be inspected, and manner of inspections for official records requests?