The Critical Role of the Board in Amending Governing Documents
Evolving community needs and changing legal requirements often present a community association board of directors with a daunting task: amending the association’s governing documents. A well-crafted amendment that complies with applicable law is the obvious objective of any board of directors that is considering proposing revisions to its governing documents. Developing this amendment document itself is generally the easy part of the amendment process if the association is represented by an experienced community association attorney.
More frequently, the hardest parts of amending governing documents are getting the association members’ attention, marketing the amendment to them and obtaining their approving votes. But, unless the necessary majority of members participate, any amendment, no matter how well drafted, is doomed to failure. So, if your board of directors is considering proposing an amendment for approval by your association’s members, getting members engaged and responding likely will be key to a successful amendment. Because of this reality, here are four questions to ponder if your board is proposing to amend its governing documents::
- Is the amendment really necessary?
The amendment process involves significant expense and effort. A smart board of directors will ask whether the issue that the amendment is intended to fix can be addressed in any other way. In consultation with the association’s attorney, the board will want to consider whether, for example, an available statute will serve to address the issue or whether a board resolution would have sufficient authority to avoid the need to go through the amendment process. Similarly, the board will want to consider whether the issue arises so infrequently that attempting to amend the documents in order to address it is not justified. - Can association members be expected to perceive the value of the amendment?
The members of the board of directors are engaged, often on a nearly-daily basis, in the business of the association. From this perspective, the directors can readily appreciate the value of the proposed amendment. The other members of the association, however, are almost certainly not engaged in the association’s affairs and are involved instead in their daily lives. This leaves them little time to understand or worry about association issues that, to the directors, mandate an amendment to the governing documents. Because of this fact of life, a proposed amendment has a far better chance of membership approval if the need and value of the amendment can be shown to the members in as brief and “non-legalese” a way as possible. One wit has suggested that it must be possible to explain the need and effect of an amendment “before the light changes at Main and Broad.”
Board members should carefully think about “talking points” for use in both oral and written presentations to the members. The talking points must simply and clearly set out the reasons for and anticipated effect of the proposed amendment. These talking points must make the strongest case possible as succinctly as possible. - What is the “marketing plan” and how will it be implemented?
The approval of at least a majority of members is required by most association documents in order for an amendment to become effective. This, together with the non-involvement of most members in the affairs of the association, calls for a well-thought out plan for marketing the amendment to the members.
Such a plan might include a mailing to members containing the language of the draft amendment, a red-lined copy of the section or sections to be amended showing the change being made, a covering memorandum using the talking points to explain the reasons for and effect of the amendment and reporting the board’s (hopefully, unanimous) recommendation of the amendment and, if approval can be obtained outside of a meeting, a ballot form. The plan might also call for one or more “town hall” meetings of the members to present the amendment and respond to members’ questions.
If the association documents require a vote at a meeting, a formal meeting might replace the town hall meetings. In that case, the package to the owners would include a formal notice of meeting that complies with the association documents and state law. The marketing plan might also provide for a follow up mailing or email to members that addresses any questions or concerns raised by members as a result of the mailed package or during the town hall meetings. - What steps will be taken to obtain members’ approvals (or disapprovals) of the proposed amendments?
Assuming, as is frequently the case, that members’ approvals may be obtained outside the confines of a meeting, the board will want to plan steps to get members to submit ballot forms. Several things can be done to encourage members to submit written evidence of their approval of the proposed amendment. Forms allowing members to indicate either approval or disapproval of the amendment can be included in the package sent to owners. Such forms can also be available at town hall meetings and members should be encouraged to submit the forms during or at the close of those meetings. Drop boxes at the association property and email responses should be considered if consistent with the amendment and voting provisions of the association’s documents.
The board should have a plan to follow up. This can include email broadcasts to members, telephone trees to contact those who have not previously responded to encourage them to do so and, should it prove necessary, door-to-door campaigns at a time when most members can be expected to be at home. In considering follow up steps, the board will want to remember the need to encourage non-resident members to respond, as non-residents can often make the difference on whether the amendment will be approved or not, even though those members are often the least engaged in the association’s affairs.
If the governing documents require that amendments must be voted on during a meeting of the association, the board should include proxies in the package provided to all owners if the association documents will allow voting by proxy. In this connection, the board will want to consult with the association’s attorney to be sure that the proxy form is valid and to be sure that any limits on the number of proxies a single person may exercise are honored. Follow up emails and, as necessary, telephone trees and door-to-door efforts to obtain proxies should be part of the board’s plan.
Conclusion
Without doubt, carefully crafted amendments and adhering to necessary legal steps and other formalities are necessary for valid amendments. However, a well-represented association can depend on its attorney for these.
The board of directors’ critical role in insuring that a necessary amendment to the governing documents becomes effective lies in developing support among the members for the amendment and in doing what can be done to insure that members vote on the amendment by the necessary majority. The steps described above will help a board of directors more easily get approval for an amendment that it knows to be necessary for the good of its association.