Older CC&Rs often have very high approval requirements that make it almost impossible to amend or restate the CC&Rs. The legislature recognized the difficulty and enacted Civil Code §4275 (formerly section 1356) to help alleviate the problem.
The purpose of section 1356 is to provide homeowners associations with the ability to amend their governing documents when, because of voter apathy or other reasons, important amendments cannot be approved by the normal procedures authorized by the declaration. In essence, it provides an association with a safety valve for those situations where the need for a supermajority vote would hamstring the association. (Mission Shores v. Pheil.)
Good Faith Effort. If an association makes a good faith effort to obtain membership approval and the votes fall short of the super-majority, the association may petition the court to reduce the required percentage. (Blue Lagoon v. Mitchell.) The petition must contain the following:
- The reasons for the amendment.
- The number of votes required to amend.
- The number of affirmative and negative votes actually received.
- The association's effort to solicit membership approval.
- A copy of the governing documents, text of the amendment, and the notice and solicitation materials used.
Voter Apathy. Voter apathy is not an element that must be alleged or proven to obtain relief under Civil Code §4275. (Orchard Homes v. Orchard Alliance.)
Court's Decision. When making its finding, the court need not recite each factor it considered, nor detail the evidence supporting each factor. Instead, the record need only reflect that the court weighed the relevant factors. The requirements for granting a section 4275 petition can be detailed in the association's moving papers, and the trial court's final order can reference Civil Code §4275 and simply deem that all necessary requirements have been met. (Quail Lakes v. Kozina.)
Time Frame. The petition is given priority by the courts. The process generally takes from 30 to 90 days to prepare and file the petition and have the matter heard in court.
Court Approval. The court may, but is not required to, grant the petition if it finds all of the following:
- The membership was given at least 15 days written notice of the court hearing.
- Balloting on the proposed amendment was conducted in accordance with the governing documents.
- A reasonably diligent effort was made to permit all eligible members to vote on the proposed amendment.
- More than 50% of the membership voted in favor of the amendment. (Peak Investments v. South Peak HOA)
- The amendment is reasonable.
- Granting the petition is not improper for any reason stated in subdivision (e) of the statute.
Secret Balloting. Although not mentioned in the six points listed above, the election on the amendment must follow the provisions for secret balloting described in Civil Code §5105 (appointment of an Inspector, secret balloting, public counting of ballots, etc.). Otherwise, the election itself may be deemed invalid before the court ever reaches the issue of reducing the percentage of votes required for approving the amendment/restatement.
Reasonableness. The standard for reasonableness for CC&R amendments is that they not be arbitrary or capricious; that they be rationally related to the protection, preservation or proper operation of the property and the purposes of the association as set forth in its governing instruments; and that they be fair and nondiscriminatory. (Fourth La Costa v. Seith)
Cost. Most restatement petitions are not that expensive. It can change, however, if an owner mounts a vigorous challenge and the judge is uncertain what to do. When that happens, the court may set multiple hearings and briefings. Because there is no attorneys' fees provision in the statute for restatement petitions, associations cannot recover its fees as the prevailing party. If an association spends money and time modernizing its documents and the enormous effort required to get at least half the membership to vote for the restatement, it makes sense to spend the money required to get court approval of the documents.
Recordation. Once approved by the court, the amendment becomes effective upon recordation in the county in which the development is located. Recording the amendment provides constructive notice of the amendment.
Statute of Limitations. The statute of limitations for challenging an amendment is four years.
ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.