What If Your HOA Can't Pass Necessary Amendments?
What happens if you really, truly, positively need to amend your HOA governing documents, but your owners are so apathetic you can't get the supermajority your governing documents require? Can you go to court to get a judge to amend your governing documents? Here, we explain whether that's possible and, if not, what you can do if you're stuck in amendment limbo.
Please, Judge, We Need Your Help!
Whether you can go to court to ask a judge to amend your governing documents will depend on your state's law. Here's the status in a few states.
Arizona — "If association documents say you need 75– or 90– percent approval, often that essentially means you'll never meet that approval rate," says Kristen L. Rosenbeck, a partner at the Mulcahy Law Firm PC in Phoenix, which represents associations. "There isn't any case law now, but we have a pending bill addressing this issue. The legislature will give a standard that would be applicable in all situations. The proposed bill would allow planned communities and condominiums to amend CC&Rs with the approval of two–thirds of those voting as long as a quorum of 50 percent of owners is present. However, they'd also retain the power to amend the CC&Rs pursuant to the procedures set forth in their documents."
The bill has passed the Arizona House of Representatives, but a vote scheduled for March 16 in the state senate was indefinitely postponed. So it's not law yet. "Until then, an association could attempt to go to court," says Rosenbeck. "But we don't have any case law indicating what the outcome might be."
Massachusetts — "In Massachusetts, theoretically it's possible," says Robert Galvin, a partner at Davis, Malm & D'Agostine PC in Boston who specializes in representing condos and co–ops. "But I've never had to do it, and I'm not aware of any reported case in Massachusetts in which it's happened."
Galvin, however, says your amendment would have to be very important to get court approval. "Maybe some owners want a no–dog policy, and others didn't," he explains. "I don't think a court would intervene in a case like that. The only time I can see the possibility is if you have documents with some kind of an insurance provision that's wrong, and it prevents you from insuring the building properly."
Virginia — "It's not possible," says David Mercer, a partner at MercerTrigiani in Alexandria, Va., who represents more than 500 associations in both Virginia and Washington, D.C. "In Virginia, the state constitution is unlike others on one particular issue. The general assembly is prohibited from passing a law that has a negative impact on the existing contract rights of the citizens of the commonwealth.
"With respect to the Virginia Condominium Act, there's a statutory process for amending the governing documents," says Mercer. "If you can't amend under that process, the general assembly isn't going to pass a law that abrogates owners' rights or the governing documents. The general assembly could say condos need only 50 percent owner approval for an amendment, but that would be relevant only to documents recorded after that change in the law. And there's no way a judge is going to say, 'This amendment is a good idea, and I can't understand why you can't pass it, so I'm going to change it myself."
Homeowners associations are a little different in Virginia. "They don't require statutory authority to come into existence," explains Mercer. "Many of the documents creating them have very inartfully written provisions on amending the documents. Some don't have any mechanism for amendments, and others require 100 percent owner approval. That dilemma has created lots of discussion with boards asking, 'Can't we change that?'
"The Property Owners Association Act tries to provide a statutory process for amending documents," Mercer adds. "It's not been constitutionally or legally tested, but I don't believe it can alter existing documents, only those created after the act was created. It's a tough question, but the contract rights of the residents are highly protected in the state's constitution."
That said, Mercer might still head to court. "For associations that can't get the required 66 percent or 100 percent, before I gave up, I'd file in court the most imaginative pleading I could for a reformation of the governing documents, with some form of amendment procedure 'approved' by the court. It would be a long shot, but I wouldn't give up until I took it. But that's assuming there's some grave need to amend the documents."
All Hope Is Not Lost
If your state is among those in which a court is unlikely to amend your documents in the face of owner apathy, what's next?
"Here's what I do," explains Galvin. "I call for a meeting giving the proper notice and give out proxies at the meeting. I don't adjourn the meeting. At the end of the meeting, I say, 'The meeting is continued to next Thursday at 7 p.m. in this room.' You don't have to give notice again, and you spend the week calling owners trying to get their vote. When the next meeting begins, you don't need a new quorum, but you count the number of proxies and votes. Eventually, you'll get the votes."
· HOA Voting: Everything You Need to Know About Proxies
· How to Get Your Homeowners to Step Up When You Don't Have Enough Board Members for a Quorum