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How to Amend Your Condo Association’s Governing Documents

If you’re a board member of a condo association, you may be faced with the responsibility of changing the association’s governing documents.  Times change and older associations’ governing documents often have provisions that seemed reasonable back in the day, but no longer reflect an associations’ members’ values and lifestyle.  For instance, a $20 fine may have seemed like a stiff penalty in 1980 and now may be seen as a nuisance cost.  Worse, some older governing documents contain illegal ownership restrictions based upon race, religion and sexual orientation.  Updated governing documents will help make your associations’ property values competitive with newer communities.

 

Your association amendments will have to include certain points in order to still follow governmental regulations. This can be an intimidating process, but it’s a necessary one. Let’s examine the proper procedure you’ll need to follow when it comes to association amendments.

 

What are the Governing Documents?

 

The term “governing documents” refers to the condo association bylaws, regulations, and rules. Any documents that outline these concepts are considered part of your association’s governing documents. What documents are required varies from state to state, but may include:

 

      • Declarations of Covenants, Conditions, and Restrictions
      • Articles of Incorporation
      • Rules and Regulations
      • Association Bylaws

 

While these documents may sound similar, it’s important to understand how they differ. The board should also be very familiar with the content of each of these documents so they can properly enforce them. In addition, the board should regularly review the documents to ensure that all of them are still relevant, enforceable, and necessary.

 

All the bylaws, regulations, and rules are put in place for good reason. While board members may come and go, the governing documents remain consistent as they are meant to protect the best interests of all the members of the association.

 

The Importance of Amending Your Association’s Governing Documents

 

While some associations may go many years without amendments, there are many valid reasons why your association may choose to update their governing documents. The needs of the community might change and some of the old provisions may have become obsolete.

 

If an issue arises with any of the documents, an association typically won’t completely replace a document or even rewrite it. Instead, there is a formal amendment process that must be followed. Ideally, the amendment process should be done in small sections to ensure a seamless amendment process unless a document needs to be completely overhauled.

 

Steps for Amending Governing Documents

 

1. Decide Which Parts of the Governing Documents Should be Amended

The amendment process may be simpler if you establish a committee to help the board with this process. A board member can then be responsible for chairing the committee. However, if forming a committee isn’t possible, the board can simply act as the committee.

 

The first step to amending your governing documents is simply determining which parts you want to amend. Be specific about what’s going to change. The board should outline exactly which sentence or paragraph requires alteration, rather than a whole section.

 

If you are planning on adding to the section, the board should brainstorm together and jot down any ideas. Don’t worry about it being perfect at this stage because this won’t be the final language used in the amended documents. What’s important is that the board is able to agree about what ideas they want included in the amendment.

 

2. Consult with Your Association’s Lawyer

Your lawyer will be able to help you determine if the parts you have highlighted can legally be amended. This step is vital to ensuring your association amendments and association declarations are in line with all the relevant state laws. Only an established legal professional can be responsible for writing the exact language that will end up in the final governing documents.

 

It’s also a good idea to continue consulting with your lawyer through each step of the process to ensure that everything being done is legal. They can also help you figure out the proper voting procedure needed to amend the governing documents which may also vary depending on what kind of document you are amending.

 

3. Review the Documents

Reviewing is one of the most vital steps to ensuring your amendments are exactly what you want. Review the documents several times with your board, individually, and with your lawyer. Check for errors, ambiguity, and confusing wording. Your association bylaws and association declarations must be as close to perfect as possible.

 

Because legal language can be difficult to understand, it’s so important for the association’s attorney and the association to be in continuous communication. Sometimes the attorney may even go the extra mile by preparing a summary of the amendment so the members can understand it better.

 

4. Make Revisions if Necessary

After the board approves the amendment, sometimes they may send the proposed amendments to the other residents to get their feedback. Your association might also hold an informational meeting with the association’s lawyer where condo owners can come and ask questions. If they propose any changes, a second draft of the amendment should be created before it can be voted on.

 

5. Vote on the Amendment

After the language and the content of the amendment is exactly how it should be, it’s time to vote! Your association will need to get a state-determined number of votes in order for the proposed amendments to be approved.

 

The board will probably have to do a little leg work to secure the appropriate number of votes. Knock on doors and make phone calls to ensure every member knows how important this is and how impactful an amendment could be. If you don’t get the proper amount of voter participation, the amendment will not pass. On the other hand, if the proposed amendment is met with the legally-required amount of support, the amendment can be added to the governing documents and enforced.

 

Let LM Funding Help You Navigate Association Bylaws and Amendments

 

With all the challenges that can come with amending governing documents, you may be tempted to not initiate the process even if you think it’s necessary. However, there are numerous benefits to this process. You are able to change necessary bylaws, fix rules and regulations, and update outdated information that may get you in trouble.

 

One common area that associations amend pertains to collections.  Older governing documents often fail to provide associations with newer statutory remedies created to assist boards in fulfilling their obligation to collect dues. If you think your governing documents could use an update in this area, LM Funding can offer you expert advice. We can go through your current governing documents and come up with the most effective solutions for your needs. For help and support with collecting money on past due receivables, contact LM Funding today!