Governing documents are the heart of any homeowners association. If documents pre-date laws addressing important topics such as assessment collection, election rules, document disclosures and water damage claims or they are not properly written, an association can be exposed to potential liability and needless legal expenses. To avoid potential problems, CC&Rs should be amended or restated.
Amend/Restate Defined. An amendment revises or replaces one or more paragraphs in a set of CC&Rs. A restatement revises and/or replaces, and reorganizes everything in the document. The operative language “amend and restate, in their entirety” or the equivalent phrase “amended and restated in its entirety” are industry standard used in CC&R restatements and is generally found on the first page of a restated document.
Reasons to Restate. Some reasons for restating your documents:
- Current Laws. In 1986, the “Davis-Stirling Act” went into effect. On January 1, 2014, a revised and Restated Act replaced the original Act, putting governing documents throughout the state out of sync with the law in areas such as the Open Meeting Act, electric vehicle charging stations, pets, and rentals, to name a few.
- Declarant Provisions. Remove all provisions related to the Declarant, the original developer of the project.
- Plain English. Remove all legalese in the document and put all provisions in plain English so board members and homeowners alike can understand what they are reading.
- Maintenance Obligations. Older documents are often ambiguous when it comes to maintenance responsibilities. Developers are known for using boilerplate documents that often mention components that do not even exist within the development. Failure to properly define duties leads conflict, insurance disputes and litigation. A maintenance chart should be included as an exhibit which provides an easy reference for respective maintenance obligations.
- Elections. Changes in the law have dramatically affected how elections are handled and ethics issues for directors. Older bylaws fail to have adequate qualifications for the election of directors, have void nominations procedures, make no provision for secret elections, and fail to address the selection of independent inspectors of election. Associations need to adopt modern election rules and amend their bylaws to bring them current with the law.
- Pet Restrictions. Pet restrictions can be relaxed or strengthened depending on the needs of the association. Condominium associations, in particular, may wish to restrict the number, weight and breed of dogs.
- Rent Restrictions. Add rent restrictions that conform to the Davis-Stirling Act.
- Insurance Provisions. Provide a requirement that owners are to carry insurance, address insurance deductibles, and clearly spell out the association's obligations.
ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.