Governing Document Revisions
The firm’s attorneys often assist associations with partial amendments to CC&Rs or Bylaws and also with complete governing document revisions, also called restatements. Partial amendments pinpoint a particular change that the association wants to make such as revising a use restriction in the CC&Rs or decreasing the quorum requirements in Bylaws. Complete restatements are typically called for when it becomes apparent the existing governing documents are outdated. The following is a list of the primary reasons for updating governing documents
- Remove Unnecessary Provisions and Correct Mistakes. Updating the governing documents is an opportunity to correct mistakes and to delete provisions that no longer apply in the community. Deleting developer provisions which protect the developer’s interests, limit their liability, and do not have the owner’s interests in mind is the most obvious example. Deleting these provisions and including new ones can make it easier for the community to change with the times for smooth and efficient operation. Updating the documents entails use of plain language and a road map for our clients to follow by laying out the procedural steps to take in any given situation.
- Update for Changes in the Law. CC&Rs drafted and recorded before enactment of the Davis‑Stirling Common Interest Subdivision Act (Civil Code ”1350-1378) in 1985 do not contain many changes made by the statutes and the case law deriving from them. However, CC&Rs drafted and recorded in the nineties and 2000’s also need updating due to significant amendments to the Davis‑Stirling Act over the last 25 years as well as changes to the Corporations Code affecting the governance of non‑profit mutual benefit corporations.
- Use Experience to Address Community Concerns. Every community has its war stories or project specific concerns which a document rewrite can address by incorporating the association’s past experience and the experience of the association’s lawyers at Joel M. Kriger, APC. The firm has been in the business of representing homeowner associations for over 20 years and knows which provisions help make associations run smoothly and save its clients money.
- Delineate Maintenance and Insurance Responsibilities. A restatement of the CC&Rs is a great way to clarify and possibly shift the allocation of maintenance responsibilities between the owners and the association, and make clear the application of insurance proceeds and responsibility for insurance deductibles. Restatements prepared by the firm include a maintenance responsibility allocation checklist tailored to our client’s needs.
- Lower Quorum Requirements and Simplify Voting. CC&Rs and Bylaws drafted by developers often require that amendments be approved by a super‑majority of the owners such as 67% or 75%. Restated CC&Rs may include a lower requirement to 51% so that future amendments are easier. Depending on the preferences of the association, quorum requirements in general can be lowered to 33% for member meetings, and cumulative voting can be eliminated to simplify the annual election of directors, decrease the likelihood that a majority owner or investor will be able to control the board, and increase the likelihood of seating a full board on the first attempt.