Amending Your HOA’s Declarations
In North Carolina, the Declarations (also called restrictive covenants) are the main governing document of a homeowner’s association. While the general statutes of the state remain the ultimate authority, they give a large amount of leeway to a planned community to craft its own governing documents. Usually the Declarations are pulled from a boilerplate set and filed by the developer at the beginning of a project. As such, in a mature HOA, the Declarations may be inconsistent or have parts that are simply undesirable for the members. In that case, the declarations can be amended and changed.
Under Chapter 47C for Condominiums and 47F for other planned communities, an amendment to the Declarations may be amended only by a yes vote of 67% of the votes of the members. The declarations can also require a greater percentage for an amendment, but the percentage can’t be lower than 67%.
Here’s how to make changes to CC&Rs.
1. Talk to your neighbors first. Obtaining a 67% majority of all the votes of the association is hard, so strong membership support is essential. Usually apathy rather than active opposition is the problem with amending the declarations.
2. Avoid controversial amendments such as those changing assessments so that some members pay more or less assessments or those requiring unpopular use restrictions.
3. Send out the exact text of the amendment. If there are relatively few changes, help the members by sending two versions — a “redlined” one showing what is being removed and added, and another version showing the exact text. If your association is pursuing a complete rewrite of your Declarations, a “redlined” version will be too complicated. Instead, consider sending along a summary or highlights of what will be new or different.
4. While trying to amend Declarations, consider if bylaw amendments are also needed. Bylaws generally deal with elections and removal of board members and officers. The process for amending the bylaws should be contained in the bylaws themselves. While the statutes regarding planned communities do not require a minimum percentage, the statutes regarding non-profit corporations, which is how most HOAs are set up, do. Under Ch. 55A, the bylaws can be amended by 2/3s of the total votes of an association or a majority of the votes actually cast at a meeting.
5. If homeowners want to express their disagreement, let them. The board should already have expressed why the amendment should be passed, in HOA meetings or newsletters. If there is a lot of disagreement or misunderstanding, the board should slow down and work more to build a consensus.
6. Have an attorney prepare the amendment. Declarations and bylaws are legal documents. Sometimes, amendments can unknowingly violate the law or contradict another part of the Declarations. Have your attorney involved very early in the amendment process to avoid wasted effort. Explain to your lawyer what you want and let him draft the language to make that happen.
7. Make sure your amendment is recorded. Once it is filed with your county’s register of deeds, all owners and future owners are deemed by law to have notification of the amendment and are therefore bound by it.
–Bradley A. Coxe is a practicing attorney in Wilmington, NC with Hodges & Coxe PC who specializes in Personal Injury, Medical Malpractice, Homeowner's Associations, Contract and Real Estate disputes and all forms of Civil Litigation. Please contact him at (910) 772-1678.