|
AMENDING ASSOCIATION DOCUMENTS
The governing documents of a community association consist of a Declaration of Condominium for a condominium community, a Declaration of Restrictions for a subdivision, along with the Articles of Incorporation, By-Laws and Rules and Regulations of the association. A cooperative is governed by its Articles of Incorporation and By-Laws, along with the long-term lease for occupancy of a particular portion of the cooperative property. As the governing documents are the basis for the association's operations, it is imperative that the documents are current and meet the needs of the community. A well-managed association will periodically review all of its documents and update as necessary. The Condominium Act requires a certain procedure when amending condominium documents. The full text of the amended section must be provided to the membership showing the deletions stricken through and any additions underlined. This allows the membership to clearly see the proposed changes. A similar procedure is routinely used for other community associations as the accepted method of proposing changes. An exception to the underline and strike through method is if a substantial change to a particular section is being made, the proposed amendment will refer the member to the existing document and reflect the text of the entirely new provision. Many associations will use this method when adopting a new set of By-Laws and simply state that the proposed By-Laws are significantly different and refer the reader to the existing set by reference only, and provide the entire set of new By-Laws for review. Generally, a committee or the Board will determine there are specific aspects of the document which should be amended. The association's attorney will then draft the appropriate wording and provide the proposed amendment to the association for distribution. If approval of the membership is required for the amendment (as opposed to the Board of Directors approval) the association sends out the proposed amendment on a Limited Proxy with Notice of a Regular or Special Members Meeting at which the amendments will be considered. The members may then vote by Limited Proxy or attend the meeting and vote at the meeting on the proposals. Each document specifies the approval necessary for amendment. If no amendment procedure is contained in the document, a Declaration of Condominium or Deed Restrictions may be amended by seventy-five percent (75%) of the membership. After approval, a copy of the amendment should be recorded in the Public Records, along with a signed statement by the association's officers that the amendment was properly adopted. The general purpose of amendments is to address problems within the community or to update documents to incorporate statutory changes. Almost any type of general restriction or requirement may be placed in an association document by amendment. The limiting factors are that the amendment must be reasonable and must not violate any law. Many associations address parking restrictions, rental restrictions and other issues governing the use of the dwelling unit. Most associations have the authority to promulgate rules and regulations through the Board of Directors. Associations, through the Board, typically have control of the common elements or common areas. Board rules may address such items as use of the recreational building and other recreational facilities such as the pool, tennis courts and spa. In a condominium, association rules may not contradict or contravene a right given to the members either explicitly, or implicitly, by the controlling Declaration. The rules and regulations may not restrict rights addressed in the Declaration, as there is a hierarchy of governing documents. The Declaration is the paramount document subject only to the applicable law. The Articles of Incorporation create the association and contain the basic guidelines for the association's structure. The By-Laws are the operating rules for the association. The association Rules and Regulations are traditionally promulgated by the Board and are subject to the provisions of all of the foregoing documents. The governing Statutes continually change. During the 1990s, the Condominium Act and Cooperative Act had significant changes. In recent years, portions of Chapter 617, the Not For Profit Corporation Act, underwent several significant revisions in relation to homeowner associations. Most associations adopt updated By-Laws to incorporate the statutory changes. Many of the statutory revisions allow associations to have certain authority, or waive statutory requirements; however, such issues must be addressed in the By-Laws (or Declaration) otherwise the Association may not exercise such rights afforded by the newer statutory amendments. Examples are the right to impose fines against the members and to suspend the member's right to use the recreational facilities for violation of the governing documents. When an association decides to incorporate the new statutory changes, it is usually easier and less costly to adopt an entirely new set of By-Laws as opposed to making numerous changes to the existing By-Laws. The overriding issue in proposing changes to the documents is to determine whether there is a need to address such issues and whether the membership will support the proposed changes. For further information regarding proposed amendments, the association should seek the advice of an attorney that practices in the area of community associations.
By: Joseph R. Cianfrone, Esq. |