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Navigating Impasses
Legal Tools for CC&R and Bylaw Amendments
By Karyn A. Larko, Esq.
California Civil Code (“CC”) §4275 provides a way for community associations with a super-majority approval requirement to amend their CC&Rs to obtain court approval for amendments when they cannot obtain sufficient member votes to pass the amendments.
An association may file a 4275 petition if it has conducted a member vote to approve the amendments that comply with California law and the governing documents, and obtained the approval of at least a majority of the members (i.e., over 50%).
To succeed in a 4275 petition, an association must demonstrate to the court that a reasonably diligent “effort” was made to obtain the required member votes. While the only legal requirement in this regard is that the member vote be conducted in accordance with California law and the governing documents, there are additional efforts that improve the likelihood of a court granting the petition. These efforts include extending the voting deadline at least twice to give members more time to vote; mailing, emailing or posting notices reminding members to vote; and calling or going door-to-door to encourage members to vote.
California Corporations Code (“Corp. Code”) §7515 provides a similar mechanism by which associations can petition the court to approve bylaws or other governing document amendments when insufficient member votes are received regardless of the approval requirement. As with CC §4275, the association must show that it conducted the member vote in accordance with California law and the governing documents. Unlike CC §4275, however, §7515 does not require the association to obtain the approval of at least a majority of the members to file the petition. Having said this, if the approval of a super-majority of the members is required to amend the bylaws, the court could, on its own volition, impose this requirement.
What You Need: Documentation to Prepare and File the Petition(s)
A petition to amend the CC&Rs or bylaws requires a large amount of documentation to be submitted to the court, including copies of the association’s governing documents, the proposed amendments, an explanation of the reason(s) for the amendments, all documents sent to members regarding the amendments and/or vote, a copy of the ballot packet, any official report on the results of the vote, including the signed minutes from the meeting where the votes were tabulated and the certification of the inspector(s) of elections as to the outcome of the vote. Because it can help get the petition granted, a statement describing the actions taken to encourage members to vote should also be submitted. This statement should include a description of the actions taken, the approximate date(s) of these actions and the person(s) involved.
Finally, if the association has a history of struggling to achieve quorum for member meetings or obtain sufficient member participation in other votes, a statement describing these difficulties should also be submitted to the court.
How it Works: The Petition Process
The association’s legal counsel will prepare and file the petition with the court, along with an ex parte hearing application to obtain a hearing date. The ex parte hearing (i.e., a hearing where only the association appears) is frequently held within a week or so following the filing of the application. At this hearing, the court will decide how the association must notify the membership of the hearing to consider the petition (“petition hearing”), and will generally set the hearing date.
The date for the petition hearing, which depends on the court’s availability, is usually set at least six weeks from the filing date so the association has time to prepare and send out the hearing notices. CC §4275 requires the association to give members notice of the petition hearing no less than 15 days prior to the hearing date. If any other parties are entitled to notice of the petition hearing under the CC&Rs, such as lenders, the city or county, notice must also be provided to these parties by this same deadline.
Once the petition hearing notices are sent out, members and, if applicable, other parties with the right to approve or disapprove the amendments, may file letters or declarations of opposition to the court. It is also not uncommon for members to simply show up at the petition hearing to contest the petition. If this occurs, the court could continue the hearing to give the association an opportunity to respond to the opposition.
The court is often lenient with any members appearing in pro per at the petition hearing (i.e., without legal counsel) to oppose the amendments.
Even when there is opposition, CC §4275 and Corp. Code §7515 petitions are routinely granted, although sometimes the court will exclude any amendments it deems unreasonable.
If a CC §4275 petition is granted, the amendments must be signed by the person designated in the CC&Rs or by the association for that purpose, or if no one is designated, by the president with their signature notarized, and the signed and notarized amendments along with the court order granting the petition must be recorded in the County Recorder’s Office. Upon recordation, the amendments become effective.
Within a reasonable time after the amendments are recorded, a copy of the amendments with a statement that the amendments have been recorded must be provided to all members via individual delivery, as set forth in CC §4153.
Corp. Code §7515 is silent as to what actions must be taken once a petition is granted. In the absence of any statutorily imposed notice requirement, it is reasonable for the board secretary to promptly sign the court approved amendments, and for the signed amendments to be sent to all members. It is not necessary to record bylaws amendments.
Practice Tips
To maximize the likelihood that a court will grant your association’s petition(s), ensure the vote to approve the amendments strictly complies with CC §5100 et seq., extend the voting period at least twice, and take additional actions to encourage members to vote (e.g. send out reminder mailings and email blasts, post signs in the common area, mobilize volunteers to call members and/or knock on doors, offer gift card draws for members who vote by a specified date), and keep a detailed record of the efforts made to encourage members to vote to provide to the court.
Consult with the association’s legal counsel at the beginning of the amendment process to ensure the member vote is conducted in strict compliance with California law and the governing documents, as well as to ensure that no other parties, such as the developer, city, or county are required to approve the amendments.
If insufficient member votes are received to potentially approve the amendments, consult with the association’s legal counsel before conducting the meeting to open and count the ballots for guidance on how to improve the association’s ability to pursue a CC §4275 and/or Corp. Code §7515 petition.
