Published December 12, 2022
Boards of directors of community associations frequently wonder at what point they should restate their association’s Bylaws and CC&Rs. Many associations have older, outdated governing documents that could use a complete overhaul. At the same time, restating these documents typically requires membership approval. Restated documents should also be prepared by a qualified attorney, and must be approved in a secret, double envelope vote, so the project can be relatively costly. Below are some recommendations for when to pursue a restatement:
When portions of the governing documents are unenforceable. Older documents may have been superseded since their adoption by subsequent case law and statutes, rendering certain provisions unenforceable. Boards may want to restate their governing documents to bring them current with existing law (and thereby making them enforceable once again).
When the documents no longer fit the community’s needs. Communities change over time. A set of CC&Rs recorded in the 1970s may no longer reflect the owners’ preferences with respect to parking arrangements, architectural styles and more. Older documents also may not address innovations like solar panels and electric vehicle charging stations. Further, the board may wish to amend the governing documents to empower the board to address a specific problem in the community.
When the documents include discriminatory provisions. Civil Code section 4225 requires boards to amend out any provisions in a governing document which discriminate on the basis of a protected status. Such an amendment does not require membership approval. However, once this has been accomplished, boards may want to consider pursuing a complete document overhaul (a restatement), which does require membership approval. Documents old enough to include discriminatory provisions are likely due for an update in many other respects as well.
When the documents are just confusing. Not all Bylaws and CC&Rs are made equal. Some are better written than others. If your documents create more confusion than clarity, because of inconsistent or vague language, it may be time for a refresh. This need may be especially pressing given that vague or inconsistent language can give rise to lawsuits, as homeowners insist on interpreting the documents in one manner, and the board another!
To better protect the association’s interests. Original governing documents are typically written by the community’s developer. As one might expect, these documents frequently protect the developer’s interests rather than the association’s. The board may want to consider restating the documents to provide the board with more expansive authority, and/or insert provisions designed to minimize the association’s and individual directors’ potential liability.
No matter your association’s goals, boards should consult their community association counsel regarding the timing and procedure of restating their governing documents. Everyone deserves a makeover sometimes!
Rhonda R. Goldblatt is an Associate Attorney in the Transactional Department of Epsten, APC, and can be reached at [email protected].
*This article was originally published in San Diego Community Insider in the Winter 2022 edition and was adapted from the original article, New Year, New Documents: When Associations Should Consider Restating their Governing Documents.