Changes, Changes, and More Changes: Amending Governing Documents in Oregon
Community associations have varying reasons to amend their governing documents and we previously discussed when to amend governing documents in our February 2014 weekly email. Sometimes, a current rule does not fit a community. Other times, an association wants to impose additional rules or changes are needed because of inconsistencies. Depending on the type of amendment and the specific document that is being amended, varying procedures must be followed. In general and because of the varying requirements, amending governing documents is not often for the faint of heart.
In a planned community or a condominium association, unless otherwise provided in the governing documents, amending the declaration or bylaws begins with an amendment proposal offered by a majority of the board of directors or by at least 30 percent of the owners. After the amendment is proposed, then owners vote on the amendment. If owners approve the amendment, we are often asked if the amendment becomes effective immediately. Instead, there is an important additional step for an amendment to become effective: recording the amendment in the real property records. It’s important to ensure your association does not miss this last step.
Upon recording, an amendment puts current and future owners on notice that the amendment is effective. If the amendment is not recorded and the association proceeds as though the amendment is effective, it can become difficult to untangle the issue down the road.
Declaration/CC&R Amendments: Requirements for Approval
Planned community associations may only amend their declarations with the approval of owners representing at least 75 percent of the total votes in the planned community or any larger percentage specified in the association’s declaration. In general and barring a couple of exceptions, the same is true for condominium associations. For both condominiums and planned communities, some specific types of declaration amendments may even require 100% approval. For condominiums, depending on the type of declaration amendment, the Real Estate Commissioner, the county assessor, and/or the county tax collector may have to approve the amendment before it can be recorded.
Bylaw Amendments: Requirements for Approval
Condominium associations may amend their bylaws if the amendment is approved by at least a majority of the owners. In condominiums that are exclusively residential, the bylaws may not provide that greater than a majority of the owners is required to amend the bylaws unless the amendment relates to the following:
1) age restrictions,
2) pet restrictions,
3) limitations on the number of persons who may occupy units, or
4) limitations on the rental of units.
Those specific types of amendments are only effective if approved by 75 percent of owners or a greater percentage specified in the association’s bylaws. In addition, for a condominium association, the Real Estate Commissioner must approve any bylaw amendment that occurs within five years of the recording of the initial bylaws.
Planned community associations may amend their bylaws if the amendment is approved (unless otherwise provided in the bylaws) by a majority of the votes in a planned community present, in person or by proxy, at a duly constituted meeting, by written ballot in lieu of a meeting or other procedure permitted under the association’s governing documents.
Notably, if a provision in the bylaws is required to be in the declaration under the Oregon Planned Community Act or the Oregon Condominium Act, the voting requirements for amending the declaration shall also govern the amendment of that specific provision in the bylaws.
The procedures and approval requirements set forth above are often supplemented or adjusted by an association’s governing documents; therefore, it’s important to carefully review your association’s specific procedural and approval requirements before embarking on the amendment process. Please let us know if you have any questions.
For further reading please visit Barker Martin’s Northwest Condo and HOA Law Blog. As always, please feel free to contact me with specific questions on this or any topic of interest to you regarding common interest associations.