CAN'T AMEND THE DOCUMENTS THIS YEAR? -
GET A TUNE UP!
by Beth Grimm
re you having trouble making a decision to amend the governing documents to conform to the new laws and/or eliminate declarant provisions? If your Association cannot undergo a full amendment/restatement of the governing documents for any reason, and the documents are outdated, there is an interim process that can help. Many associations have problems coming up with the money to amend, although that is not necessarily a good reason to avoid the process. Some have "bigger fish" to fry, such as a major reconstruction project, a new reserve study in process, a board short of a quorum, or failed attempts at getting membership approval sufficient to record new documents. There are other reasons why it is difficult to undergo a full amendment/restatement process. And one more BIG thing, the legislature is so prolific in California that there are usually at least 2 or 3 or more new procedures that a Board must implement (or suffer a consequence) each year.
So even if you amended as recently as 2003 or 2004, rather than going through an entire amendment process to reflect the new laws, you could use a "tune up". What is this? It involves preparation of an Attachment that could be used with the governing documents to understand the new laws that had been enacted since the governing documents originated or were last approved by the members and recorded.
What this "Attachment" is Not! It is not an "amendment" in the sense that it is not a recorded declaration. It is an informational attachment that can be distributed with governing document packages and used by the Board. It does not require a vote of the owners. It is in essence a legal opinion identifying the new laws that control over existing document provisions or came into affect after the documents were drafted. It is truly a "tune-up."
A full amendment process generally costs anywhere from $2500 (for boilerplate documents - see the Amendment process information under the previous link) to $10,000 or more. Preparation of a useful "Attachment", if prepared by Beth A. Grimm, is about $1,000 in cost prior to July 1, 2005, and about $1,200 in cost after that date. Exceptions may apply if there is more than one Declaration to review or several interim amendments to review. The cost may be less if your latest documents are under 5 years old, or if you are getting the "tune-up" every few years and need only the most recent amendments. The idea is to get a useful tool for the Association and its members that identifies areas where the law controls over outdated document provisions. The process involves a review of your existing governing documents and identifying at what point new laws present conflicts that require reconciliation. The Association is best served in using an attorney very familiar with new legislation each year, obviously because it is very important that the drafter understands the nuances of the new laws and what the intentions of the legislators were in enacting the laws.
Summary: This alternate process is a necessary "tune-up" to keep the Association's engine running smoothly. Nothing is worse than having a fines or enforcement process or special assessment unravel, or to get sued, because of a failure to follow the law. This process results in an "Attachment" that reflects the laws enacted since the documents originated or were last amended. The legislature continues to be prolific and it is not possible for associations to keep up through the amendment process. The "Attachment" may be provided to the Owners and distributed with all document packages and that takes care of explaining the newer laws that are not encompassed in the current documents and how they apply or alter what exists in the governing documents. Boards clearly have a duty to follow the law. There is no law that says documents must be updated every so many years. However, in order to fulfill the duty to follow the laws, one must know of them, and how they interact with the governing documents. This interim "Attachment" process helps Boards fulfill their duties. Going through it every few years will assure that the Board gets the information it needs to stay out of trouble that can arise from ignorance of the new laws.
Contact me if you would like to get a "tune-up"!
Can't do this either? At the very least check out the publications page and educate yourselves with the Plain English series of books and newsletters geared to get the information out where it is needed most. Education is the key!
(copyright 2005, all rights reserved)
By Beth A. Grimm, Attorney. A "service oriented" attorney and member of ECHO and CAI and various other industry organizations in California and nationally, host of the website www.californiacondoguru.com; two Blogs: California Condominium & HOA Law Blog, and Condolawguru.com Blog, and author of many helpful community association publications which can be found in the webstore on her site.