Sunday, January 13, 2013

Why should your condo, coop or HOA board consider amending the association's governing documents?

Without fail, every month sees at least several new association clients who arrive with a sheaf of dusty parchment paper that they present to us with a ceremonial flourish and the ominous words: here are our governing documents.

After gently thumbing through the documents which are naturally unbound and have the consistency of fragile onionskin, the question "Are you here to discuss amending these?" is often met with a quizzical look and a negative head shake. Why are so many associations reluctant to amend documents that are so obviously in need of a major face-lift?

I think it's because many associations have been burned previously in the amendment process. Sometimes they have attempted to amend without professional guidance and not gotten the results they wanted and other times they have used their attorney to prepare the amendments and gotten a whopping legal bill at the end.

The amendment process does not have to be torture if a board does two things: keep its expectations reasonable and stay involved throughout the process. Here are my other recommendations to make amending your documents a little easier for everyone involved:

Decide if you need a complete overhaul or whether strategic "spot amendments" will do. Some boards think they need to completely rewrite the documents to remove archaic references to the developer; sometimes those kinds of amendments can be window dressing. You might save money by leaving it in there.

Have a frank and ongoing discussion with your association attorney about what you are trying to accomplish and how much you want to spend. If you are way off base, he or she will tell you. You should also get a realistic delivery date on those amendments so your membership meeting can be planned accordingly.

Speaking of your members, involve them early. It would be prudent to do a straw poll vote first to see if your community actually supports freshening up the documents; chances are they do but it couldn't hurt to check before you spend a lot of money on amendments that won't pass.

Some amendments are simply easier to get approved than others. Removing illegal and unenforceable restrictions on children and satellite dishes make sense to avoid liability and should easily win approval. However, tell folks what they can and can't do with their property and whom they can have in their homes as guests and you're likely to have a real battle convincing some of your members to cast yes votes.

If your association's governing documents haven't been touched substantively in years, you may be missing out on some important legislative changes over the years; you may also have hidden time-bombs in your documents that put your association at a distinct disadvantage when it comes to lenders and others.

The start of a New Year is the perfect time to dust off those old documents and give them a fresh outlook.

1 comment:

  1. Can an HOA board "adopt" a transfer fee to be collected when any transfer of title has taken place? Or would they need to amend the declaration that does not authorize a transfer fee? I attempted to find it within Chapter 720 but was unsuccessful.