Updating HOA bylaws for the new millennium
January 7, 2018 4:08 PM Subscribe
My HOA's bylaws exist as a scan of a typewritten document, and I have the chance to digitize and update it for the 21st century.
I was recently awarded the dubious honor of HOA President for my townhouse complex in California, and we've already had a number of issues come up which need to be checked against the HOA bylaws. The HOA was incorporated in the mid-80's so the bylaws exist as a low-resolution scan of a 93-page typewriter document. This document is impossible to search (it doesn't OCR well), has tons of spelling errors and confusing graphics, and other anachronisms that I'd like to update for how we operate the association today. In my mind, there are three ways we could take this:
1. Transcribe the document verbatim, with absolutely no changes
2. Transcribe the document and remove things that are obviously not used anymore, such as requiring meeting notices to go out over postal mail
3. Transcribe the document and make updates that would actually change policies, such as redefining parking space usage for the common areas
Which of these things require a real estate lawyer? Would we even be able to fully move to a digital copy of the bylaws, or would we always have to refer people to the old copy? And if you've dealt with HOA issues in the past, what else should we be thinking about as we review our bylaws? Thanks!
I was recently awarded the dubious honor of HOA President for my townhouse complex in California, and we've already had a number of issues come up which need to be checked against the HOA bylaws. The HOA was incorporated in the mid-80's so the bylaws exist as a low-resolution scan of a 93-page typewriter document. This document is impossible to search (it doesn't OCR well), has tons of spelling errors and confusing graphics, and other anachronisms that I'd like to update for how we operate the association today. In my mind, there are three ways we could take this:
1. Transcribe the document verbatim, with absolutely no changes
2. Transcribe the document and remove things that are obviously not used anymore, such as requiring meeting notices to go out over postal mail
3. Transcribe the document and make updates that would actually change policies, such as redefining parking space usage for the common areas
Which of these things require a real estate lawyer? Would we even be able to fully move to a digital copy of the bylaws, or would we always have to refer people to the old copy? And if you've dealt with HOA issues in the past, what else should we be thinking about as we review our bylaws? Thanks!
I would consult with your management company rep (if you have one) or a lawyer if you want to do anything except 1.
If you wanted to fix obvious mistakes (typos, maybe grammar if both the intent and putative revision are 100% unambiguous), that might be okay but I'd still get advice from an expert.
If you're already ignoring parts of the bylaws that exist (as you imply in #2), that's probably a bad idea. If you want the bylaws to work differently, follow the formal process for changing them, don't just decide (or let anyone decide) to do whatever they want.
posted by likedoomsday at 4:30 PM on January 7, 2018 [5 favorites]
If you wanted to fix obvious mistakes (typos, maybe grammar if both the intent and putative revision are 100% unambiguous), that might be okay but I'd still get advice from an expert.
If you're already ignoring parts of the bylaws that exist (as you imply in #2), that's probably a bad idea. If you want the bylaws to work differently, follow the formal process for changing them, don't just decide (or let anyone decide) to do whatever they want.
posted by likedoomsday at 4:30 PM on January 7, 2018 [5 favorites]
Do none of these until you consult a lawyer.
Your documents will specify what can be changed through a vote of the Association, and the minimum percentage of owners participating and voting yes can vary by what you intend to change.
If you just update even the typos, when a unit is sold those docs are reviewed by loan officers, underwriters, and Fannie Mae. If Fannie Mae finds out there’s a non-typo version that is not properly signed by the original filers (even if they are dead), notarized, and recorded Fannie Mae will likely freak out so horrifyingly that the sale could be killed and until it’s sorted Fannie Mae could choose to not offer loans on your building. Yes, I dealt with something similar last week for work.
If you aren’t notifying by mail and your documents say you must, this is a big problem. If you ever get involved in litigation including debt collection from a delinquent owner, it could become problematic that you aren’t following your own rules.
As well, many Association documents contain provisions that are no longer in line with current practices and I sometimes see old provisions that violate the Fair Housing Act.
You absolutely need an attorney to update these docs correctly to reflect how your Association actually runs and cleans up the antiquated stuff and adds new valuable stuff. Attempting any of this on your own is a terrible idea.
posted by littlewater at 7:43 PM on January 7, 2018 [6 favorites]
Your documents will specify what can be changed through a vote of the Association, and the minimum percentage of owners participating and voting yes can vary by what you intend to change.
If you just update even the typos, when a unit is sold those docs are reviewed by loan officers, underwriters, and Fannie Mae. If Fannie Mae finds out there’s a non-typo version that is not properly signed by the original filers (even if they are dead), notarized, and recorded Fannie Mae will likely freak out so horrifyingly that the sale could be killed and until it’s sorted Fannie Mae could choose to not offer loans on your building. Yes, I dealt with something similar last week for work.
If you aren’t notifying by mail and your documents say you must, this is a big problem. If you ever get involved in litigation including debt collection from a delinquent owner, it could become problematic that you aren’t following your own rules.
As well, many Association documents contain provisions that are no longer in line with current practices and I sometimes see old provisions that violate the Fair Housing Act.
You absolutely need an attorney to update these docs correctly to reflect how your Association actually runs and cleans up the antiquated stuff and adds new valuable stuff. Attempting any of this on your own is a terrible idea.
posted by littlewater at 7:43 PM on January 7, 2018 [6 favorites]
Best answer: Also: Find out where the original hard copy is. (See if you can get a better scan; the tech has improved immensely in the last few years. Try to get a 300dpi black and white scan, unless there's shading on the pages that makes a color scan necessary.) Odds are, it's someone's responsibility to keep track of the original paper - a low-res scan that's arguably unreadable is likely legally unenforceable.
For changes: you want a verbatim transcription to start with, followed by an updated transcription that fixes typos, clarifies phrasing, and removes content that is literally inapplicable. When you have that, with whatever legal support is necessary (may not need that to discuss it), you work toward two versions of the updated changed-policy document: one as an addendum list to existing contracts, and one folded into the main agreement for any future members.
Getting the verbatim copy, and making an updated version, don't take legal support. But getting them authorized to be used instead of your current poor-quality scan does.
Side note: the legal system isn't really happy with digital-only contracts. We're getting there - contract employers especially are used to working across state lines with PDFs signed in a browser - but we haven't had major lawsuits challenging digital signatures yet, and it's only going to take one heir involved in a high-money case to knock some serious holes in that system; I crack PDFs professionally and I'm appalled at what people think is a "secure" document.
(Signed PDFs are really, really hard to crack; there is no known way to remove the signature or change it. But it can be printed and rescanned - and that version is vulnerable to all the digital editing tricks. Someone looking at digital documents can tell the difference; a judge reviewing printouts can't.)
Feel free to memail me if you need help or advice on the best/most efficient way to get a verbatim copy from a low-quality scan.
posted by ErisLordFreedom at 10:24 AM on January 8, 2018 [1 favorite]
For changes: you want a verbatim transcription to start with, followed by an updated transcription that fixes typos, clarifies phrasing, and removes content that is literally inapplicable. When you have that, with whatever legal support is necessary (may not need that to discuss it), you work toward two versions of the updated changed-policy document: one as an addendum list to existing contracts, and one folded into the main agreement for any future members.
Getting the verbatim copy, and making an updated version, don't take legal support. But getting them authorized to be used instead of your current poor-quality scan does.
Side note: the legal system isn't really happy with digital-only contracts. We're getting there - contract employers especially are used to working across state lines with PDFs signed in a browser - but we haven't had major lawsuits challenging digital signatures yet, and it's only going to take one heir involved in a high-money case to knock some serious holes in that system; I crack PDFs professionally and I'm appalled at what people think is a "secure" document.
(Signed PDFs are really, really hard to crack; there is no known way to remove the signature or change it. But it can be printed and rescanned - and that version is vulnerable to all the digital editing tricks. Someone looking at digital documents can tell the difference; a judge reviewing printouts can't.)
Feel free to memail me if you need help or advice on the best/most efficient way to get a verbatim copy from a low-quality scan.
posted by ErisLordFreedom at 10:24 AM on January 8, 2018 [1 favorite]
Do none of these until you consult a lawyer.
Your documents will specify what can be changed through a vote of the Association, and the minimum percentage of owners participating and voting yes can vary by what you intend to change.
Yes, this. For example, are you dealing with By-Laws or Covenants, Conditions and Restrictions (commonly referred to as CC&Rs)? By-Laws can often be amended simply by a majority of a quorum at a meeting. Yours may be different. Hence, the need to consult an attorney.
CC&Rs, on the other hand, typically require the affirmative vote of a rather high percentage (often 75%) of the members/homeowners. The reason for this is that changes to the CC&Rs can significantly change what a homeowner can/can't do with his property. Ergo, changes must be made with the knowledge and participation of a super-majority of the membership.
I was once President of an HOA whose Board had been wrongly advised several years previous that a change to the CC&Rs to prohibit leasing by homeowners could be passed by a simple majority at an Annual Meeting. The change was voted and - believe it or not - actually registered with the County Clerk! Over time, maintaining the "leasing is prohibited" fiction has nearly exhausted the HOA Board's skills in employing 'smoke and mirrors.'
posted by John Borrowman at 3:04 PM on January 8, 2018 [1 favorite]
Your documents will specify what can be changed through a vote of the Association, and the minimum percentage of owners participating and voting yes can vary by what you intend to change.
Yes, this. For example, are you dealing with By-Laws or Covenants, Conditions and Restrictions (commonly referred to as CC&Rs)? By-Laws can often be amended simply by a majority of a quorum at a meeting. Yours may be different. Hence, the need to consult an attorney.
CC&Rs, on the other hand, typically require the affirmative vote of a rather high percentage (often 75%) of the members/homeowners. The reason for this is that changes to the CC&Rs can significantly change what a homeowner can/can't do with his property. Ergo, changes must be made with the knowledge and participation of a super-majority of the membership.
I was once President of an HOA whose Board had been wrongly advised several years previous that a change to the CC&Rs to prohibit leasing by homeowners could be passed by a simple majority at an Annual Meeting. The change was voted and - believe it or not - actually registered with the County Clerk! Over time, maintaining the "leasing is prohibited" fiction has nearly exhausted the HOA Board's skills in employing 'smoke and mirrors.'
posted by John Borrowman at 3:04 PM on January 8, 2018 [1 favorite]
Response by poster: Thanks everyone! My association is completely self managed by the owners, so I was kind of expecting to inherit some issues with how the bylaws and CC&Rs are being enforced. I'm new to this role, so I will definitely seek real legal advice before making any changes.
posted by perihare at 9:47 AM on January 9, 2018
posted by perihare at 9:47 AM on January 9, 2018
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posted by Gnella at 4:27 PM on January 7, 2018 [3 favorites]