Lifestyle Blog

Seven Essential Steps to Change Your HOA's CC&R Agreements

Posted by Duane McPherson, CMCA, PCAM® on Mar 14, 2018 8:01:00 AM

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Covenants, Conditions, and Restrictions are rulesets established by a neighborhood, homeowners association, builder, or developer. These legal documents explain the responsibilities of the Homeowner Association and its property owners.

 

The CC&Rs are the highest-governing agreements of a community association; they should not be confused with the Bylaws, which explain how the homeowner association hearings are conducted. Most homeowners receive a copy of the CC&R when they first purchase or rent their home. When purchasing their home community members agree to live by the terms established in the CC&R. This agreement can include restrictions on noise levels, paint colors, and parking to name a few.

What if your HOA wants to change its CC&R agreement? You may wonder is there is a way to change your HOA's CC&Rs. Amending the document can be a time-consuming and costly legal process. You'll often need to obtain professional advice to ensure the ruleset change is done properly. Here, we’ve made a short seven-step guide to help Homeowner Associations amend their CC&Rs.

1. Determine whether your HOA needs to revise its CC&Rs.

When first considering a CC&R revision the HOA should examine the document, read the agreement, and see if it needs to be revised. You should only change your agreement if you have a valid, rational, and legal reason to do so. The primary motivation for amending CC&Rs should be state law changes so that your community will always stay within state compliance. A second great reason is that a majority of homeowners want new living arrangements. For example, property owners want to allow pets on the property.

The CC&Rs should not be altered for minor reasons like rezoning of a single residential property for a commercial purpose. Changes like these can take a great financial toll on your community.

 

2. Find out your state's legal process to change CC&Rs.

Great, your organization determined that it needs to amend its CC&R agreements. What's the next step in the process? You'll need to research your home state's laws that govern the CC&Rs amendment process. This process will take some time since the legal requirements to change CC&Rs differ throughout the United States.

Some local governments require organizations to obtain property owners' permission before changing community CC&Rs. Others ask HOAs to provide community members with advanced notice and a commentary period. There are even states that don't mandate groups to give property owners any notice before changing the rules.

3. Contact an attorney.

The HOA will need to consult with an attorney to ensure the CC&R amendment process goes smoothly. Even simple rule changes can ignite disagreements in the community. You should seek attorney referrals from other HOAs, and check the attorney's references before retaining them.

Present copies of your old and new CC&Rs to your attorney. They should identify new amendments that could cause conflicts within your proposed CC&Rs. Have your attorney read the new governing document and provide feedback on how best to move forward. Once the first draft of your new CC&Rs is finalized, the next step is to get it approved by homeowners.

4. Notify homeowners about proposed amendments to CC&Rs.

It's a good practice to tell all property owners about proposed CC&R amendments, even if your state doesn't require HOAs to notify them. Residents will appreciate the transparency put forward, and may be more inclined to agree with any proposed changes to the rules.

The most common way to notify property owners is to send out notices to homeowners about upcoming changes. When you send out letters, provide drafts of the new CC&R. You can give a printed draft or online document link to community members. Request anonymous written feedback from your community, and take into consideration any concerns/suggestions that may be brought forward.

Be prepared for a variety of responses. Some tenants will become upset about the new agreement. Others will be angry if they're not allowed to provide input about the amendments. All criticism should be taken with some reverence, but understand that any changes made will be up to the Board of Directors in the end.

5. Host open community meetings on CC&R changes.

After the notification period, it's time to advertise a series of open hearings to discuss the HOA CC&R changes. Schedule the meetings during a time when the majority of property owners can attend. You can bring forward popular opinions brought forward during the notification period.

At the hearings, allow individuals to provide suggestions and air grievances about the changes. Take their objections seriously. Once the hearing process is finished, use their comments to finalize your CC&R document.

6. Get homeowners to vote on the proposed CC&R document.

Once you're finished with the hearing process, it's time for your community members to vote on the proposed changes. Arrange a confidential mail-in ballot with a clear start and ending date. The vote should last approximately 90 days; this will give owners enough time to read the document and send in their ballot.

Some voters will not respond. If they do not put in a vote, send them a reminder to read the changes and send in their ballot. You may also need to knock on doors to remind people to vote. Their approval, or disapproval, of the change is necessary to move forward.

Get quorum approval. If you do not reach quorum you'll have to turn to the Homeowners Association Board for a final vote. In some associations, not reaching quorum may even prevent the CC&R change from moving forward.

7. Hire an experienced HOA Manager to help with the amendment process.

The HOA CC&R amendment process can be time-consuming. Hiring an experienced professional HOA management service to help expedite the process can relieve a lot of stress from the Board of Directors. Not only would a manager be able to help with the CC&R process, they can help with the normal day to day events in an HOA.

Grand Manors has HOA management services for high-rise condominiumsactive adult communitiesmaster-planned communities, and mixed-use communities. The firm will act as your point of contact through the whole process.  If your board is about to make changes to its CC&R agreements, contact Grand Manors today.

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