Reader Questions - Are The CC&Rs Stale?

Hi Mr. Richardson,

How often should CC&Rs be changed, amended or restated? Our current one was prepared by the developer in 1979. How much does it usually cost to amend CC&Rs? One board member is opposing updating it for reason that we may be just wasting money if we don’t get the vote. If we do not get the vote, is there another way of amending it without needing the vote of the homeowners? Thank you,

B.L, North Hills

Dear B.L.,

Unfortunately, most developers do not focus upon whether the original CC&Rs will help the association operate well in the future. The typical goals of subdividers are to provide documents which meet the minimum Bureau of Real Estate requirements and to also protect themselves against construction defect claims. So, original CC&Rs are normally boilerplate and do not meet any unique needs of the new community.

The Davis-Stirling Act, in its earliest (and somewhat embryonic) form was enacted in 1985, and has been amended and expanded hundreds of times. Therefore, CC&Rs which are 10-15 years old or more probably do not reflect many recent changes to the law. Associations from the 90’s or earlier probably need to consult attorneys more often, since one cannot determine what is “legal” only from reading those governing documents. Updated documents should be more user-friendly, provide clarity, hopefully reduce the need to continually check with the association lawyers, and should meet the particular needs of the association and its property.

Generally, a membership vote is needed to amend CC&Rs. The CC&Rs will normally state what vote is necessary to approve amendments, but if they do not, under Civil Code 4065 a majority of all members can approve amendments. Typically, the larger the association, the more difficult it is to get members to vote on new CC&Rs. Members are often unwilling to attend meetings to listen to the HOA attorney and also too busy to read the draft document. Consequently, many members fail to vote, and that apathy often dooms the CC&Rs update effort. Civil Code 4275 allows an association to go to court and obtain court approval of an amendment if the CC&Rs had a higher vote requirement which was not achieved but more than 50% of the members voted for it.

Cost to amend CC&Rs typically is quoted by most HOA law firms on a flat fee basis. The cost and level of detail of service should be closely examined when comparing proposals, to make sure the HOA has an “apples to apples” comparison. At the end of the day, lawyers for the most part are selling their time. A lower cost proposal might involve lower expenditure of time by the attorney, and a less customized document.

Small HOAs may find it easier to amend their documents, because it is easier to obtain substantial participation, but of course the cost per home is much higher than in the larger associations. Very small HOAs might wish to consider replacing their developer-supplied documents with documents which are crafted with more realistic adaptations for smaller associations.

Before starting a governing document amendment project:

• Make sure the board is ready to get out the vote
• Avoid potentially controversial amendments
• Don’t rush the project
• Communicate to the members

Thanks for your question,
Kelly

Written by Kelly G. Richardson

Kelly G. Richardson Esq., CCAL, is a Fellow of the College of Community Association Lawyers and a Partner of Richardson | Ober | DeNichilo LLP, a California law firm known for community association advice. Submit questions to [email protected]. Past columns at www.hoahomefront.com. All rights reserved®.