Earlier this week, we started a discussion on changing your community rules, starting with the very basics of reviewing the current laws and ensuring that the new rule you are considering is supported by most of your community homeowners or the board members. Continuing this week, we will discuss precisely how to start realizing those changes and the process behind making them part of your community's governing documents.
[Continued from Part 1]
Once an official proposal has been submitted, the board must discuss the change. The board may choose to make this the topic of their regular meeting or hold a special meeting to address your proposed rule changes. Board members will debate the pros, cons, and purpose of the rules, and they may draft a new - more document-ready - draft of your proposal to serve as the formal changes to be made.
Once the board has discussed this, they may approve your proposal for a vote or ask you to discuss the changes. In some cases, the discussion will reveal flaws in your proposal, or they might have a few strong reasons why the rules currently are how they are. Going through Step 2 will make it easier to get past Step 3 without any severe objections - as you will have already addressed the issues at-hand during a previous council meeting.
The next step is to hold a vote with the entire community. Every member homeowners vote counts, and they will all need to participate in voting your amendment into the governing documents. This is often the most challenging part of changing your HOA rules, as most members are in the habit of ignoring the neighborhood government and may not be responsive to outreach methods.
You will need a total majority vote to pass your changes - your documents will decide if this is a standard 2/3 or 3/4 majority. You will likely need an extended period to alert members and collect their votes. Some states require secret ballots, which is usually a smart way to approach the process.
Once all the votes are in, the council should hold a public counting. Those members invested in the outcome should appear for a special meeting where they are counted in front of everyone. You may also - in our modern era - create a video of the vote count for those members unable to be present - especially in light of social distancing today.
When the votes are counted, your amendment will pass if you achieved the required majority. If not, you can start the process repeatedly with the feedback you gained the first time through.
If your rule-change passes the vote, then the next step is to update your governing documents. Bring out your By-Laws and CC&Rs and make the appropriate adaptations to the policy. We strongly suggest having your association lawyer and manager present to ensure your changes are both well-presented and written in a legally binding way for homeowner members.
When your documents are updated, you must send a copy to every homeowner in the community. Just as the association is required to provide these documents when a new member buys a community home, the rules must provide the updated documents to ensure members always know the community's rules and rights.
Lastly, you will need to register all or most changes with the county recorder's office. In most states, the rules can internally record your by-laws (governing the board), but CC&Rs are governing homeowners must be registered with the county to be enforceable.
Take your updated and lawyer-approved documents to the county recorder's office and submit them as an update to your community policies. The record's office will help you complete this process correctly, and then your new terms are legally enforceable for members inside the community.
There are many unique and essential reasons to change the rules of your HOA community. Often, rules that made sense during the founding or resonated with the original community aren't relevant anymore. You may find some rules are no longer fair when enforced in a modern setting or are too oppressive for your current member homeowners' attitudes. Or times have changed, and you need a new rule that wouldn't have existed when the original governing documents were written.
Whatever your motivation, it is possible to change your HOA rules. All you need is the correct procedure and a majority vote of all your neighborhood members. Just be sure to consult your association lawyer and HOA manager before making changes to ensure that everything is legally and strategically squared away. For more helpful HOA information and management insights, contact us today!