The Board Amending CC&Rs and Bylaws?Mar 21, 2022
By Kelly G. Richardson, Esq. CCAL
CC&Rs and bylaws are governing documents that normally can only be amended by a vote of the HOA membership. However, there are some narrow circumstances under the Davis-Stirling Common Interest Development Act in which a board of directors actually is empowered by statute to make certain limited amendments to CC&Rs or Bylaws.
Illegal discriminatory language – Unfortunately, many HOAs have governing documents (typically CC&Rs) containing illegal discrimination. Provisions against language discriminating against race, or sex, or children (except in senior communities, which can ban children) are required to be removed by HOA boards pursuant to Civil Code Section 4225. Older associations still have racial restrictions, and some association documents from as recently as the 1970’s or 80’s will occasionally have illegal restrictions against children. The empowerment of Civil Code Section 4225 does not only authorize amendments to remove such discriminations, but at subpart (b) of the statute requires it.
Developer construction and marketing provisions - Many governing documents (typically CC&Rs) contains language to protect the developer’s ability to complete the construction and to market the remaining unsold homes in the project. After construction and marketing by the developer has concluded, Civil Code Section 4230 allows a board to remove such provisions from the governing documents.
Outdated statute references – In 2014, the Davis-Stirling Act was relocated, reorganized, and amended in many ways. As a result, CC&Rs or bylaws predating 2014 contain inaccurate Civil Code references. Civil Code Section 4235 allows a board to amend and update the statute references in the CC&Rs and bylaws to match the new statute numbers.
Illegal rental restrictions - Civil Code Section 4741, effective in 2021, bans “unreasonable” restrictions against rentals and directs HOAs to remove such restrictions from their governing documents. Many HOA lawyers in 2021 urged their clients to try to amend their CC&Rs, an effort that often causes frustration and wasted expense due to member apathy. However, a very unique but short opportunity is currently available, pursuant to a new amendment in 2022 to Civil Code Section 4741 with the addition of a new subpart “f.” That subpart opened up a window from January 1, 2022 through and including July 1, 2022 in which boards can amend CC&Rs or bylaws without a membership vote to remove illegal rental restrictions, so long as notice is given to the membership at least 28 days before the board acts on the amendment. The complete verbatim text of the proposed amendment must be included in the announcement. This amendment could be tricky, since Civil Code Section 4741 does not list all the ways in which a rental restriction could be “unreasonable.” Consult legal counsel to try to ascertain if the governing documents violate the statute. Many HOAs may miss the July 1 cutoff or the 28-day notification requirement if they are not careful.
Boards should always seek assistance of qualified legal counsel before considering amendments by the board to the CC&Rs or Bylaws. Counsel can help ensure that the amendment qualifies for one of these four exceptions to the membership vote requirement and draft the amendment.
Also remember that any of these amendments must be approved in an open board meeting with the normal Open Meeting Act agenda announcement to the members. CC&R amendments must be filed with the County Recorder, not bylaw amendments.
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