HOM E OW N E R S ’
C O R N E R
Difficulties Amending the Declarations? HELP MAY BE AVAILABLE!
A Readers of this column are encouraged to send their opinions on the above and suggestions for future columns to Sam Dolnick, c/o CAISan Diego Chapter, 1081 Camino Del Rio South, San Diego, CA 92108. Sam Dolnick has served as president of his association is a former homeowner representative of the San Diego Chapter Board of Directors and former homeowner trustee of CAI National. He is currently homeowners’ delegate on the California Legislative Action Committee, Secretary of the CAI Foundation for Community Association Research and president of the Baker/ Dolnick Education Foundation. Guest articles are always welcome!
ny association that has attempted to amend its Declarations of Covenants, Conditions and Restrictions (CC&Rs) knows how difficult it is. A prime example may be found in the Seven Oaks Senior Community in Rancho Bernardo. From 2005-2008 several boards of directors worked on revisions to the CC&Rs to incorporate many changes of federal and state laws, as well as appellate and supreme court decisions, into the revised documents. Yet, the “yes” votes failed to reach 51% of the voting power of the association, thus the association could not take advantage of Civil Code §1356. This after approximately $26,000 was spent. Most CC&Rs require either 67% or 75% affirmative votes (a supermajority) of the entire membership for the amendments to be effective. Associations also have difficulty in obtaining a quorum (usually 50% of the voting power of the membership) at their annual membership meetings. Without a quorum business cannot be conducted and the meeting may be adjourned. The adjourned meeting usually requires a quorum of 25% of
the membership. However, calling an adjourned meeting increases the expenses that the association must pay. In trying to amend the CC&Rs this becomes particularly frustrating. Hiring an attorney to properly amend the CC&Rs may cost anywhere from $2,500 to $10,000. Then there are the costs associated with printing the amended documents, providing ballots with double envelopes per Civil Code §1363.03, (Election and Voting Procedures) postage, etc., which can cost between $250 and thousands of dollars depending upon the number of separate interests in the common interest development (CID). Civil Code §1356 offers help when a quorum is present and the number of affirmative votes exceeds 51% but is less than the required number of “Yes” votes as required in the Declaration. Civil Code §1356 is entitled Amendment of Declaration by Court Petition; Contents of Petition; Grounds for Granting or Denying Petition. In order to petition the Court the details in Civil Code §1356 must be followed exactly. The importance of following provisions of Civil
Code §1356 exactly are evident in two appellate court cases decided in 2008. Both cases were in the Court of Appeal, Fourth Appellate District. The first case, #D042976, affirmed on 1-4-08, was in Division One, Fourth La Costa Condominium Association v. Barbara Seith and the second case, affirmed on 9-508, was in Division Two, Case #E043932, Mission Shores Association v. David Pheil. In the first case, Barbara Seith appealed “…an order the trial court entered that reduced the percentage of votes necessary to amend the Fourth La Costa Condominium Owner’s Association (Owners Association) Declaration of Covenants, Conditions and Restrictions (CC&Rs) (Civ. Code §1356) and Bylaws (Corp. Code §7515).” The trial court found, in addition to other items, that balloting by mail was authorized; that the Owners Association made reasonable efforts so that all eligible voters had an opportunity to vote; that notice for written notice to the lenders was adequate [more on this later]; that the proposed amendments were reasonable; and that the Continued on page 32
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Winter 2009 • Common Assessment Magazine