Amending HOA Governing Documents

While an HOA’s governing documents serve as the foundation of the association, there are times when it needs to be updated. However, it needs to undergo a rigorous process that involves the entire community, not just the board of directors. Here’s the right approach to amending HOA governing documents.

What Are HOA Governing Documents?

Governing documents are your community association’s foundation. It contains stipulations that outline each and every resident’s rights and responsibilities. It also indicates the roles of both the board of directors and the association itself.

Governing documents are in place to make sure a community’s day-to-day operations run without a hitch. It prioritizes the benefit of the community through having safeguards for protecting property values and protecting the peace

There are several different types of governing documents that an HOA may have. While each set may be different for every association, it usually includes the following:

Articles of incorporation: This document, which is filed with the government, establishes the status of an HOA as a legal entity. It usually includes general details about the association, including its name, goals and structure. Having it in place lets the HOA have the rights of any other legal entity, including entering into contracts and owning property.
HOA Bylaws: The bylaws outline how the HOA operates. It indicates the essential procedures needed in running the HOA, including board member elections, meetings and decision-making procedures. It mentions all the internal functions, procedures, and related requirements for HOA operations.
Covenants, Conditions, and Restrictions (CC&Rs): Think of the CC&Rs as the HOA’s rulebook. As its name suggests, this document lists down every homeowner’s rights and responsibilities, along with the restrictions and conditions that those may entail. If you own property in an HOA community, you also need to abide by these rules.

How to Amend HOA Bylaws, CC&Rs and other Governing Documents

If the need comes up, the HOA needs to follow a process in updating HOA documents. This process is usually defined or guided by the law, as well as stipulated in the document itself.

Here is how to update HOA governing documents:

1. Evaluate the Existing Governing Documents

Before amending anything in the HOA’s governing documents, you need to check what you currently have and what changes are needed. There are many different and valid reasons for this to happen.

One such reason is inconsistency with the law. As time goes on, the law also evolves. With this, certain inclusions in your documents may become outdated. New legislation being passed may carry inconsistencies and conflicts with your current documents. This is when updating HOA bylaws, and CC&RS may be needed.

Another thing that may prompt the need for updating HOA governing documents is clarity. There are times when your governing documents are written in vague or confusing language. This creates misunderstandings and makes it difficult for the board to enforce rules. When this happens, updating HOA covenants may be necessary.

2. Understand Approval Requirements

When amending HOA documents, certain requirements are also in place. This may vary depending on the HOA’s stipulations and local laws in place.

For example, if you want to know the requirements on how to change CC&Rs in California, you need to check the law and the governing documents of the HOA itself.

In order to amend or restate CC&Rs, they must be approved by the percentage of members required by the CC&Rs and “any other person whose approval is required” by the CC&Rs. (Civil Code §4270.)

In addition to a formal vote of the owners by secret ballot, many CC&Rs may also require approval from lenders, the city or county, or another governmental entity. Generally, the method of obtaining lender or government approval is set forth in the governing documents. Otherwise, lender voting protocols are simpler than member voting.

3. Create an Amendment Proposal

Once you’ve pinpointed the needed changes and know the requirements, it’s time to start the procedure.

The first formal step to amending HOA governing documents is to make a proposal. This formal document should contain the changes you want to put forth, along with an explanation of why it should be amended.

3. Discuss the Changes Through a Meeting

After the proposal has been brought up, the board of directors will need to organize a meeting. At the meeting, they would need to discuss the change and determine whether the reasons are acceptable. This meeting should be open to all residents in the community as they can provide valuable feedback on the matter.

4. Send Out Notices

If the board agrees that there’s merit to the amendment, they will have to notify all HOA residents for a vote. The notification should be transparent and contain all the necessary information to evaluate the proposal.

Even though the board members find the amendment reasonable, they do not have the authority to implement the change on their own. A proper voting process is still needed to finalize the amendment.

5. Organize a Member Vote

Following the review and notification, the HOA will need to organize a voting process. This specific process will depend on local laws. Some areas require a vote from all members of the HOA, while others may only require a quorum.

6. Find Out the Results

After members have finished voting, the board will need to tally the votes at an open meeting. This ensures transparency with the results, which is essential in amending HOA declarations and other governing documents.

Once the votes are counted and validated, it should be clear whether the amendment was approved.

7. Record and Announce the Changes

Once finalized and approved, amendments to the CC&Rs need to be formally recorded and filed with the county recorder’s office. This step is not necessary for bylaws, however.

Nevertheless, all members need to be notified of any HOA governing documents once they are approved. Doing so ensures that all members are aware of the changes to be implemented.

A Step-by-Step Process

While uncommon, sometimes it becomes necessary to change the foundation of your community association. A formal process for that is needed to safeguard the interests of every resident and the integrity of the association. By understanding the proper way to amend HOA governing documents, you are less likely to encounter conflicts in the future.

Optimum Property Management provides comprehensive HOA services to communities in Orange County and the Inland Empire.

Call us at (714) 508-9070 or contact us online to learn more!

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