A discussion of routine & complex issues which confront all types of shared ownership communities.

Condo and HOA Law Blog By Donna DiMaggio Berger, Esq.

Condo and HOA Law Blog By Donna DiMaggio Berger, Esq.
This blog covers every topic under the sun related to condominiums, cooperatives, HOAs, timeshares and mobile home communities from the unique perspective of attorney Donna DiMaggio Berger.

Monday, November 28, 2011

Keeping your association documents up to date and in line with your community's needs

Far too often when a new board is initially meeting with one of our attorneys, they will pull out a sheaf of haphazardly rubber-banded documents that look like they were written on parchment paper and turn them over with a flourish as the association's official governing documents. They will then advise that these need to be "freshened up" since a few decades have passed since they were first created.

Some boards take a very hands-on approach to amendments and create a Document Review Committee to go through the governing documents line by line, marking up what they wish to change. Others rely entirely upon an attorney's recommendations regarding a possible upgrading of the documents. Sometimes boards wish to have an entirely clean set of documents and others wish to have only strategic amendments prepared that will bring their association into compliance with newer statutes and changed lifestyles in their community.

No matter which approach is used, there are some amendments that almost every community should consider:

1. One of the first amendments which must be considered these days in Florida associations is whether or not to add Kaufman language to the Declaration. This language would submit the governing documents to the terms and provisions of the applicable common interest ownership statute as it "may be amended from time to time". This means latter-passed changes to the statute would be automatically incorporated into the association's governing documents. However, there are pros and cons to adding this language to your declaration so it should be discussed thoroughly with your association attorney.

2. These days many associations have some kind of leasing restriction in their governing documents. Communities with high delinquencies might want to consider easing up on those restrictions to allow owners with financial problems to rent out the property in order to meet their assessment obligation. Communities who are nearing the edge of unacceptable leasing percentages under federal lending guidelines might want to consider tightening up their rental policies in order to keep their properties attractive to the FNMA.

3. Any document amendment project should include a review of the documents to identify any archaic provisions that are no longer enforceable under the law. Illegal age restrictions and satellite dish bans are two that come to mind.

4. Some language in older governing documents may no longer bear any resemblance to the current lifestyle in the community. Parking restrictions that were created when most homes had only one car, restrictive language on what constitutes a "single family" and restrictions on any kind of business being conducted in a unit or home (which could include activities most of us undertake on a daily basis from our home computers) should all be scrutinized and possibly updated.

5. One of the issues that can be most confounding for association boards is the issue of how to stop certain behaviors deemed to be a nuisance by most reasonable people. Do repeated police visits to address a tenant's domestic violence issues constitute a nuisance under your current governing documents? Depending on how that nuisance provision is drafted, they may or they may not. Whenever an association is attempting to enforce a provision in the governing documents, any ambiguity will be construed against the association. In most cases, the more specific your documents, the better.

6. Do your documents contain a provision that requires you to use a bank as an Insurance Trustee whenever a claim is paid out under the association's policy? Have you really paid a bank in the past to serve this function? A thorough review of your documents might reveal a lot of protocol that is currently required which you are not following. Do your documents require a certain agenda for board meetings which has never been used? These discoveries should prompt a discussion on why you are not following these provisions, whether or not they are still deemed worthy and perhaps an amendment to incorporate the procedures that are being used into your documents instead.

These are just a few of the amendments that should be considered when the request is made to update your association documents. Remember, developers draft documents with an eye towards selling property and not always with an eye towards long-term living in those communities. It is up to the association members to ultimately revise the community's governing documents to best fit their needs.

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

2 comments:

Ruby Claire said...

Second and Fourth point is awesome.





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Association Management Orange County said...

Sometimes boards wish to have an entirely clean set of documents and others wish to have only strategic amendments prepared that will bring their association into compliance with newer statutes and changed lifestyles in their community.

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