In this week's tip, we get you started on the complex task of amending your governing documents.
One question you'll need to address early in the process: Do you do all the amendments you need at once, or are there amendments you should separate from the rest? And what types of amendments should be taken all by themselves to make the process more transparent or easier for owners to accept or understand?
And another thing: Would it ever be worth it to add a juicy amendment to garner interest—as an HOAleader.com reader and Florida HOA president did with the hot-button topic of sex offenders—to encourage people to vote?
Let's start with the mantra we often begin with: Check your state law first. For instance, a court case in Arizona has made amending governing documents much more of a challenge than in the past, reports Melissa S. Doolan, an attorney at The Travis Law Firm in Phoenix, who has represented community associations for the last 15
years.
“Amending has become really difficult in Arizona,” says Doolan. “Kalway v. Calabria Ranch HOA says you can amend only if it was anticipated as a topic
in your documents. For instance, if your documents didn't have rental time period restrictions, it would be hard to amend to include rental restrictions.”
Another important consideration might be financial. It might cost more money to do
several separate amendment processes.
“Typically, if the documents have a lot of issues, a lot of it is a cost-benefit analysis,” says Elina Gilbert, CCAL, a shareholder at Altitude Community Law in Lakewood, Colo., who has specialized in
community association law for 24 years. “It sometimes isn't cost-effective to do it piecemeal. Just bundle it all, and rewrite the whole document.
“That depends on how many changes you're making and the severity of the changes,” she says.
“For instance, if you want to revise your entire budget process or maintenance obligations, those are big changes. If you have that much going on, you're better off rewriting the whole document.”
Another factor: Do you need to amend all
your governing documents, meaning your CC&Rs, bylaws, and articles of incorporation?