Amending Your HOA Governing Documents
Have you ever thought about what it would be like today if laws that were enacted years ago governed our society? While some of the basics still apply, many old laws no longer make sense. The same is true for condo and homeowner association governing documents. Some old rules are no longer valid or create difficulty. It’s important for your Board to revisit your governing documents and amend them as needed.
Your Board should assess the many factors that affect your governing documents—new laws and regulations, aging facilities, building codes, demographics, etc. In addition, not all governing documents were created equally. Some were carefully developed and address many of the critical issues that an HOA faces while others appear to be crafted less carefully. An annual review of how your governing documents meet reality is important to ensure legal compliance and resolve conflicts.
Our clients in Knoxville, Tennessee, often ask us about amending governing documents. Many documents contain burdensome obligations that associations would like to alter, but the Board is hesitant to take action. For example, requiring an HOA annual meeting to be held on the first Monday of September creates a challenge. Or, specifying that a meeting be held at the off-site address of the original development company is a requirement that can’t be met when the company is no longer there. Another document required an “annual audit” with a CPA that cost almost half of the association’s annual budget. We tell our clients that it’s the mark of a good Board to consider amending governing documents so they are relevant and in the best interest of the community.
As your Board reviews governing documents, combine changes into one amendment resolution if possible. Typically, there are no more than two or three changes needed. Does the Board have the authority to make the change or does it require a quorum? Plan accordingly. Documents in Tennessee are important, but there is no set method for amending a master deed, CCRs, or bylaws because each document is different. A recent blog by DR&M PLLC is a good resource on legalities and Tennessee codes for document amendments. It’s a sound practice to run changes by your HOA attorney to ensure that you have everything covered.
Reviewing your HOA governing documents is something that needs to be done regularly—just like association financial reviews. As your community evolves, make sure your governing documents keep pace with today’s realities.
Wise Property Solutions is a property management company serving East Tennessee with offices in Knoxville, TN and the Tri-Cities, TN-VA. Specializing in Condominium Association Management, Home Owners Association Management, HOA Management and Gated Community Association Management.