Question: My homeowners’ association is about twelve years old and we are considering doing a complete rewrite of our governing documents. Some members of the board have stated that we cannot replace our governing documents, but only amend them. Is this correct? (D.N. via e-mail)
Answer: The difference between amending the governing documents and completely rewriting them is simply an issue of scope. Following transition from the developer, it is not uncommon for newly owner-controlled communities to wish to rewrite, or as it is often called, “amend and restate,” their governing documents. Goals typically include removing obsolete references to the developer and addressing substantive provisions of the governing documents to better meet the community’s needs.
The various governing documents for a homeowners’ association will normally contain a provision which sets forth the amendatory procedure for each document. With the exception of the rules and regulations which vary, the other governing documents (declaration of covenants, articles of incorporation and bylaws) all usually require some level of membership vote to approve amendments. Section 720.306(1)(b) of the Florida Homeowners’ Association Act states that unless otherwise provided in the documents or required by law, the documents are amendable by two-thirds vote of the entire voting interests of the homeowners’ association. There is typically one voting interest per parcel.
The statute goes on to provide that certain types of amendments must be adopted by all affected parcel owners and lienholders (such as mortgagees) on the parcels. These types of amendments include amendments that alter the voting interests of the parcel, and amendments that change the proportion or percentage by which the parcel pays common expenses. Otherwise, provisions in the governing documents concerning maintenance, use restrictions, architectural control and the like, can normally be changed through the regular amendatory process set forth in the documents.
The same analysis generally applies to condominium associations. However, the Florida Condominium Act has its own list of changes that may not be made without approval of all affected unit owners and lienholders of record. For condominium associations, changes may not transform the size or configuration of any unit, materially alter the appurtenance to any unit, or modify the proportion or percentage by which a unit owner shares in the common expenses of the association or owns the common surplus, unless unanimously approved.
Additionally, Section 718.110(13) of the Florida Condominium Act provides that certain amendments concerning leasing only apply to those unit owners who vote for the amendment, or who take title after the effective date of the amendment. The Homeowners’ Association Act does not contain a similar provision concerning rental rights.
Some associations undertake these projects by presenting “black-lined” documents where every proposed deletion is stricken through, and every proposed addition underlined. In my experience, the more common approach is to present an “amended and restated” set of governing documents where the documents are simply rewritten in their entirety. There are pros and cons to each approach.
According to the Florida Supreme Court, only Florida-licensed attorneys may prepare amendments to governing documents and the voting instruments that go to the owners. I have seen many associations approach these projects with cost being the overriding factor. In my experience, this often backfires.
My advice is to sit down with the attorney who represents your community and is familiar with your documents and operations. You should prepare a list of issues you feel need to be considered, whether parking regulations, pet rules, rental procedures, or architectural review. Your attorney should be able to assess whether ad-hoc amendments, or a complete “rewrite,” are best for you.