Category: Amendments

Amendments

Associations should be very careful when amending their documents.

First, there may be a different amendment process for each particular document. Thus, one must not assume that the amendment process with respect to the declaration is the same as the amendment process with respect to the bylaws. There is no substitute for reviewing each particular document.

The exact wording of the amendment provision must be analyzed very carefully. For example, there is a difference between “75% of the owners” and “owners of 75% of the lots.” If a person owns multiple lots, he or she would still only have one vote if you are counting owners, but he or she would have multiple votes if you were counting lots.

Also, be aware that certain terms may have a legal meaning. For example, if the owners need to “acknowledge” the amendment, then the signatures need to be notarized. We have seen several associations spend a significant amount of time collecting signatures only to find out later that the amendment was not valid because the signatures were not notarized.

In summary, amending the declaration may, in some cases, make the community a better place. However, before embarking on the amendment process, the association should fully understand the process and the legal ramifications.

Amending without attorney’s assistance

Often, associations will amend their bylaws, rules and regulations, design guidelines and other governing documents without the assistance of an attorney.  However, the association’s attorney needs to receive copies of these updated documents as soon as possible to keep the attorney’s file current.  If these documents are not forwarded to the attorney and the association requests a legal opinion, the attorney’s work may be based on old, out-of-date documents that are no longer legally binding.  To ensure that the attorney’s work complies with the current documents, please make sure that the association forwards any amendments or amended and restated documents to the association’s attorney immediately after the amendment process is completed.

Updated Bylaws to Comply with the New Laws

On July 20, 2011, a series of new laws will go into effect that will significantly impact the governance of homeowner associations in Arizona. Specifically, these new laws will impact the manner in which associations hold board meetings. This new legislation addresses a variety of topics, including notice requirements, the taping of board meetings by members, emergency board meetings, requirements of the open meeting laws, and the right of members to speak at board meetings.

As a result of these changes in the law, many homeowner association bylaws may now contain provisions that conflict with the new laws. Having governing documents that conflict with the law can cause confusion among board members, association members and community managers as everyone tries to determine how the document provisions interact with the laws. Such confusion can lead to disruption at meetings, disagreements among members, and potential lawsuits against the association.

Now is the ideal time to review your association’s bylaws and adopt amendments to bring the bylaws into compliance with the new laws. In addition to compliance with the law, amendments can also be proposed to modernize the bylaws and make it easier for the association to function. For example, bylaws may be amended to add qualifications for board members, such as a requirement that a board member remain current in assessments, or that board service be limited to one member per household at a given time.

Our firm has assisted many associations in the past with reviewing and amending their governing documents, both to bring the documents into the compliance with the law, as well as to make improvements to language and content. If your association is interested in reviewing and revising its bylaws, please contact attorney Jessica Maceyko at 480-922-9292 or jmaceyko@ekmarklaw.com to obtain a cost estimate for this process.