We Have Unwritten Rules

We Have Unwritten Rules

Dear Mr. Richardson, Our board frequently adopts new rules, generally following the required process of providing 30-day notice to homeowners prior to voting at an open board meeting. The new rules are documented only in the board meeting minutes. Consequently, many of these rules have been “lost” throughout the years as homeowners come and go and memories fade. New homeowners moving in have no knowledge of these undocumented rules and naturally they are upset when the board enforces them. So, where should new and/or modified rules be documented? D.W., Cerritos Dear D.W., If the rule change is not published in writing, it is not a rule, per Civil Code 4350(a). Once the board has completed the rule-making process, the final steps are sending notice of adoption of the change and amending the rules document to include the change. If a new owner is not provided a copy of the rule, it might not be enforceable against that owner. Also, per Civil Code 4525(a)(1), all governing documents are to be provided to a member upon request so that they can be given to a prospective buyer. Rules are part of the association governing documents, per Civil Code 4150. Hoping this is helpful,Kelly Dear Kelly, I showed our president your article which said Civil 5850 requires associations to have a list of fines and that the list is part of the Annual Policy Statement packet. He said that there is no annual list of fines as we have an Assessment and Collection policy in place, and that the board is not empowered to change it. Our C.C.& R’s on two pages mentions...
Are These Rules Valid?

Are These Rules Valid?

Dear Mr. Richardson, The Davis-Stirling Act requires HOAs to develop certain operating rules, e.g., for elections or dispute resolution. Can (or should) the required rules be incorporated into the bylaws? Our small planned development (no recreational facilities, public streets, etc.) has little need for any rules other than what the Act requires. J.B., Santa Maria Dear J.B., The Davis-Stirling Act requires five sets of rules: Election rules (Civil 5105), internal dispute resolution policies (Civil 5905); architectural application procedures (Civil 4765); a schedule of fines (Civil 5850), and assessment delinquency policies (Civil 5310(a)(7)). Most associations have additional rules meeting their particular needs, such as amenity usage rules, architectural and landscaping standards, parking rules, and meeting rules, for example. Bylaws should not contain rules. Bylaws are meant to be more permanent, since normally a vote of the entire membership is required to amend bylaws. Bylaws should speak to how the corporation is governed – such as corporate powers and limits and board eligibility. Rules are less permanent, since they can be amended by the board with 30 days’ notice to the members. Could your community vote to amend the bylaws and transplant all the rules into the bylaws? Yes, but it’s not a good idea. As time passes, you all may find that some updating of certain rules is necessary and you do not want to have to hold a membership vote each time. Thanks,Kelly Dear Kelly, I bought a condo in Richmond, CA. and without reading the HOA rules I replaced carpet with hardwood because I have asthma and allergies. I love my new home but last month I received a letter...
Before Amending CC&Rs, Avoid “Ready, Fire, Aim!” [10 Tips]

Before Amending CC&Rs, Avoid “Ready, Fire, Aim!” [10 Tips]

First, check with the members Amending CC&Rs usually takes a supermajority (i.e. more than simply a majority of the quorum), so strong membership support is essential. Drafting a great amendment is meaningless if the homeowners will not vote for it. Avoid controversial amendments Amendments changing assessments so that some members pay a higher or lower amount or unpopular use restrictions should be avoided. Some amendments do not require a membership vote Under the Civil Code, amendments deleting developer marketing provisions (Section 4230) or removing illegal discriminatory restrictions (Section 4235), or simply changing the old Civil Code references to the current (Section 4235), are all amendments which can be adopted by the board of directors in an open meeting. Get out the vote Explain to the members that the failure to vote (abstaining) is the same as a “no” vote. Divide up the community into sectors and divide those sectors among volunteers. CC&R amendments are not often very interesting, and apathy is usually their greatest enemy. Missing supermajority If you cannot meet the supermajority required by your CC&Rs, Civil Code 4275 allows the HOA to file a court petition to seek judicial approval – however, to petition, more than 50% of all members, not just a majority of the quorum, must vote in favor. These petitions really should be viewed as a last resort, due to the legal, mailing, and copying cost involved. Verbatim The EXACT text of the amendment must be sent out with the ballots – even if it was already previously distributed. This is required by Civil Code 5115(e). When sending amendments to members, help them by...