(1)(a)(i) To amend the governing documents, the governing documents may not require:
(A) for an amendment adopted after the period of administrative control, the vote or approval of unit owners with more than 67% of the voting interests;
(B) the approval of any specific unit owner; or
(C) the vote or approval of lien holders holding more than 67% of the first position security interests secured by a mortgage or trust deed in the association of unit owners.
(ii) Any provision in the governing documents that prohibits a vote or approval to amend any part of the governing documents during a particular time period is invalid.fn1
(b) Subsection (1)(a) does not apply to an amendment affecting only:
(i) the undivided interest of each unit owner in the common areas and facilities, as expressed in the declaration;fn2
(ii) unit boundaries; or
(iii) unit owners' voting rights.
(2)(a) A contract for services such as garbage collection, maintenance, lawn care, or snow removal executed on behalf of the association of unit owners during a period of administrative control is binding beyond the period of administrative control unless terminated by the management committee after the period of administrative control ends.
(b) Subsection (2)(a) does not apply to golf course and amenity management, utilities, cable services, and other similar services that require an investment of infrastructure or capital.
(3) Voting interests under Subsection (1) are calculated in the manner required by the governing documents.
(4) Nothing in this section affects any other rights reserved by the declarant.
(5) This section applies to an association of unit owners regardless of when the association of unit owners is created.
Enacted 2007, ch. 223. Amended: 2015, ch. 325, eff. May 12, 2015; 2017, ch. 324, eff. May 9, 2017.
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1. Can the HOA simply define what (a) and (b) are?
2. Or must the HOA follow the Non-profit Act (using either mail in ballots or petition)?
3. Or can amending be accomplished by a simple vote at the annual meeting, where general purpose proxies are counted for those absent?
2. So, as to #2, yes, the HOA must follow the Nonprofit Act. In lieu of a meeting, the association must use either a written ballot process or a petition/written consent process, as set forth in the Nonprofit Act. Or a combination of a written ballot and a meeting may be used, or just a meeting.
3. Yes. Amending can be accomplished by a vote at the annual meeting (or a special meeting), where general purpose proxies are used for those absent, if the vote is done by written ballot where the owners sign their ballots so as to fulfill the requirement that 2/3 of the owners sign an instrument. Additionally, the notice of the meeting should describe the proposed amendment to be voted on (although that’s not necessarily strictly required depending on what would be considered fair and reasonable notice of the meeting in a particular circumstance – see Section 16-6a-704 “Notice of meeting”).
(3) Notice is fair and reasonable if:
……………………..
(b) “the notice of an annual or regular meeting includes a description of any matter or matters that:
(i) must be approved by the members; or
(ii) for which the members' approval is sought”
1. It sounds like nothing can be brought up for a vote at a meeting, unless it was announced in the meeting notice, correct?
2. Therefore, the HOA cannot, on the spur of the moment, call for a vote (in this example, to amend the CC&RS), if no mention of that was made in the notice of the meeting, correct?
3. Furthermore, if there were absentee owners, not at the meeting, and had signed over their proxies to others, they wouldn't find out until later that their proxies were used for something outside the matters mentioned in the meeting notice accompanying their proxy form. Problem with that too?
The provision you quoted is one of those safe harbor provisions. So, if an association only votes on matters at a meeting that were described in the notice of the meeting, that notice is deemed fair and reasonable. But, it is possible for an association to vote on a matter at a meeting without having described the matter in the notice.
1. It is best practice to only hold votes on matters that were described in the notice of the meeting. But, it is not strictly required, as long as, considering all the circumstances, notice was fair and reasonable.
2. Not necessarily. There could be circumstances when such a vote would be proper, without prior notice. If for instance the necessary number of owners are present in person to adopt such an amendment and if the law and the governing documents allow the members to adopt an amendment to the CC&Rs by written consent without a meeting and without prior notice, then the necessary number of owners simply need to sign such a consent. It doesn't matter that the consents happened to be signed during a meeting.
3. On the other hand, if many of the members are represented by proxy at the meeting, it will depend on the wording of the proxy appointment form and, at any rate, it is less likely that notice would be considered fair and reasonable in such a scenario.
See also, Index, "notice" for other examples.
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