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Is it time to trade in those old condo or HOA governing documents?
by: Rob Samouce
You know how it is. Some of you have been keeping that old friend family car around way past its warranty. The new car payments have long since been paid and you have paying for expensive repairs now and then to try to stretch out its use before you finally decide to trade in the reliable old clunker for a new ride.

Well, you should think the same way when it comes to looking at your old governing documents that you use as a board to run your condominium or homeowners’ association.

Even if your building or community turned over from the developer not too long ago, you already started with old developer-friendly boiler plate documents designed to benefit the developer and not you the members after turnover.

The developer wanted to sell as many units to as many people as fast as he could, so usually there are not a lot of protections for the members in your initial governing documents to prevent your community from having “bad acting” people move in as owners or tenants who can then wreak havoc on quite enjoyment of the other members.

In addition, developer documents are out of date because they do not include changes in the laws over the years. The result being is that if your board follows what the developer documents say, it will probably be doing quite a few thing illegally and not even know it. If such happens, it can become expensive legally to fix.

Some associations may have tried to stay up with the law changes with piece-meal amendments now and then and even if you hit all the law changes using the documents requires constant back-and forth reference between the original documents and the amendments, which is very confusing for most people.

The solution is to substitute the old documents with a new set tailored to your association’s particular needs and fully in compliance with today’s law.

Such a process involves completely amending and restating the Declaration, the Articles of Incorporation, and the Bylaws of the Association. The document rewriting process should not be rushed and is best undertaken with the plan of spending several months in the process.

A competent attorney with a great deal of knowledge in condominium and homeowner association law should prepare the first draft of the rewrite, and a document committee, of a few interested members of the board or the association, should be formed to review the draft.

The committee members should review the first draft and mark same with any questions or issues they may have. The committee should then meet with the attorney to go over the first draft and have their questions and/or concerns answered or addressed.

The process may require more than one meeting and will result in a second (and perhaps a third) draft. Then it may be determined to have an informal meeting of the members of the association where interested unit owners have an opportunity to see the documents and to have input to express any of their opinions and concerns.

The final draft will then incorporate any agreed to input from the members and final copies are then sent to all owners with a notice and proxy of a formal members’ meeting at which time the final vote is taken. If the requisite number of members’ votes is obtained, then the new documents are recorded in the official records of the county wherein they then become effective.

It is important to remember that the purpose of the rewrite is to update the documents to conform to the laws and updated community practices and to remove any references or provisions that were for the benefit solely of the developer, and not to change or remove any of the owners’ substantive rights.

We find that when communities update their documents, the new ones are usually pretty good for 7 to 12 years (kind of like a car) before there are significant changes in the laws again that call for another rewrite.

Once the board has the new documents they can feel comfortable in following and be doing things legally and we find that we become more like Maytag repairmen. There is not as much reason for us, as attorney’s, to get heavily involved in the day-to-day operations of the community because, like the Maytag, things are usually not legally breaking as often.

Another advantage of a rewrite is that it shows the association’s board has its act together in properly running the association, which can have a positive impact on sales in a well-run community compared to a community that is reactive rather than proactive.
Rob Samouce, a principal attorney in the Naples law firm of Samouce, Murrell, & Gal, P.A., concentrates his practice in the areas of community associations including condominium, cooperative and homeowners' associations, real estate transactions, closings and related mortgage law, general business law, estate planning, construction defect litigation and general civil litigation. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time. Those persons interested in specific legal advice on topics discussed in this column should consult competent legal counsel.