UPDATING CONDOMINIUM BYLAWS IS A TALL ORDER

Written by Benny L. Kass

LukeQuestion: I have just been elected to the Board of Directors of our Condominium Association. There are 125 units in the complex, and I have just spent last night reading our Bylaws. They were written in the early 1970s, and I am concerned they are not current.

I do not believe they adequately address all of the issues that our Board will be facing in the next few years, and wanted your suggestions as to how we go about amending them.

Answer: First, I congratulate you for reading your legal documents. From my experience, not all board members do that –but they should, at least once a year.

Amending Condominium Bylaws is a needed — but monumental — task. You should look to the section in your Bylaws dealing with “amendments” to determine what percentage of the unit owners is required to obtain approval to amend. Typically, to amend those legal documents requires a super-majority vote from all owners. Often it will require between a two-thirds and three-fourths vote in your Association in order to have your documents changed.

It is difficult to get even a majority of the owners involved in Condominium activities, let alone the necessary percentage to amend your Bylaws.

However, this does not mean that you should ignore or drop the effort to review and ultimately amend your documents.

Oversimplified, in a condominium, the basic document that creates the condominium is referred to as the Declaration of Condominium. In some states it is referred to as the Master Deed. This Declaration is recorded among the Land Records where the project is located, and basically creates the condominium regime. It outlines certain important aspects of the association, including a description of what is included in the unit, what is included in the common elements and what is included in the limited common elements, if there are any.

The second legal document important to a condominium is the Bylaws. This document — which often is recorded along with the Declaration — spells out the basic operating procedures for the association. I call it the “bible” of the Association. It authorizes the creation of a Board of Directors, spells out their authority and the number of Board members in the association. It also talks about voting rights, and collection of assessments. There are many other items included in the Bylaws, such as insurance requirements, delinquency collections and special assessments.

However, condominium law has evolved significantly over the last 20 years. The documents drafted and implemented by developers in the early 1970s are not up to date today. You are absolutely correct that your Bylaws should be revised and updated on a periodic basis.

I suggest the board appoint a Bylaw revision committee. There should be at least one lawyer on that committee, if possible. The committee would be charged with reviewing the Bylaws, and making suggestions as to what amendments are necessary. The Bylaw revision committee would also be charged with discussing these matters periodically with the Association’s attorney.

Once the Bylaw committee has made its recommendation to the Board of Directors, and if the Board approves the suggested changes, the Association’s attorney should then be asked to draft the amended Bylaws. You should then circulate these amendments to all of the unit owners, and give them at least 30 days to comment on the suggested changes. Once you have received this community input, the revision committee would once again review the proposed changes.

You must read your Bylaws to determine what the proper process is for obtaining these amendments. It may be that you want to have the amendments brought up at the annual meeting, or you may decide to call a special meeting for the sole purpose of amending the Bylaws.

Once you are at the stage where you are going to try to get the amendments passed, you must mount a good old-fashioned political campaign. Hold a couple of open forum meetings to give people an opportunity to understand what the Bylaw amendments are all about, and why they are needed. You should also make sure that if people are not going to be present at the meeting where the vote will be taken, they give valid proxies to someone else to vote their position.

Here are some highlights of the kind of amendments which you will probably need.

Voting. Do you want to restrict voting rights to those unit owners who are current in their monthly Condominium fees? Many associations are now taking the position that unless owners are current in their financial obligations to the association, they should not be able to vote on Condominium business.

Collection efforts. There are legal cases holding that when the condominium association goes to collect delinquent assessments, the association can also recover the reasonable attorney’s fees incurred for the collection efforts. Most condominium documents contain this language. If yours does not, it should be considered for a bylaw amendment.

Leasing. More and more unit owners are not selling their units when they decide to move away from the complex, but instead are renting their units. Often, the tenants do not share the same views of responsibility as do the owners, and condominium associations often have no recourse against the tenant who may be violating rules. Some condominiums are putting restrictions on the number of renters that can live in the association. At the very least, other associations are now requiring unit owners to have the tenant sign a statement to the effect that they have reviewed the condominium Declaration and Bylaws, agree to honor those documents and authorize the condominium association to take legal action against the tenant in the event the tenant violates the rules and regulations.

Fines for delinquency. Many condominium associations are now amending their documents to specifically permit the Board of Directors to impose reasonable dollar fines against an owner who is not adhering to the condominium documents. The owner must be given reasonable notice of the violation, and given reasonable opportunity to cure the violation. However, once the cure period has expired, if the owner continues to act in violation of the condominium documents, the Board should be given some authority to enforce their own rules. Typically, however, before a fine can be levied, the errant unit owner should be given an opportunity to appear before the board (or a committtee) to explain the situation and try to mitigate the fine,

Rules and regulations. Many condominium documents do not specifically authorize a Board to adapt reasonable rules and regulations dealing with the day-to-day operations of the condominium association. Such rules include use of the swimming pool, noise restrictions and pet restrictions. Each Board should adopt rules and regulations for the governance of the association. But the Bylaws should also spell out the authority of the Board to enact these rules, and give the Board the authority to enforce those rules when there are violations.

These are but some of the highlights of the kind of Bylaw amendments that are required in 2015. Your own Association may have unique issues that should be addressed in your amended Bylaws.

As I have indicated, it is a very difficult task to amend your Bylaws. However, you cannot continue to operate on a set of Bylaws that is considerably out of date.