|Section 105: The Right to Stability in Rules and Charges|
1. Seniority of Documents. In resolving any conflict among governing documents, the senior document controls. Unless the documents otherwise provide, seniority is (a) declaration over (b) articles of incorporation or association over (c) bylaws over (d) operating rules.
2. Homeowner Powers to Amend Governing Documents. For any governing document, the following apply:
a. Except as limited by the governing document, a senior document, or statute, homeowners have the power to amend subject to the following requirements:
i. Unless the governing document, a senior document, or statute specifies a different number, an amendment adopted by homeowners holding a majority of the voting power is effective to
a) extend the term of the governing document,
b) make administrative changes reasonably necessary for management of the common property or administration of the servitude regime, or
c) prohibit or materially restrict uses of individually owned homes that threaten to harm or unreasonably interfere with reasonable use and enjoyment of other property in the community, or to amend or repeal such prohibition or restriction adopted by amendment under this ¶ 2a(i)(c).
ii. Unless the governing document, a senior document, or statute specifies a different number, an amendment adopted by homeowners holding two-thirds of the voting power is effective for all other lawful purposes except as stated in ¶ 2b and ¶ 2c.
b. Amendments that do not apply uniformly to similar homes and amendments that would violate association duties to homeowners under the model statute are not effective without approval by homeowners whose interests would be adversely affected, unless the declaration clearly and specifically apprises purchasers that such amendments may be made. This ¶ 2b does not apply to non-uniform modifications made under circumstances that would justify judicial modification.
c. Except as otherwise expressly authorized by the declaration, and except as
provided in ¶ 2a, unanimous homeowner approval is required to
i. prohibit or materially restrict the use or occupancy of, or behavior within, individually owned lots or units, or
ii. change the basis for allocating voting rights or assessments among homeowners.
d. At least 60 days before voting on any proposed amendment to a governing document, the association shall provide notice to all homeowners, including the specific text proposed and a description of the amendment’s purpose and anticipated effects. No amendment takes effect before the association provides notice of adoption to all homeowners, certified by an association officer, and to the extent required by law, the association records the
e. Directors have no power to amend a governing document except where
expressly authorized by statute or, where not otherwise contrary to statute,
expressly authorized by the governing document or a senior document;
provided that, if governing documents authorize directors to impose any
duty or charge on homeowners, this shall be done by operating rule (as
provided in ¶ 3) unless the governing document requires otherwise; and
provided further that homeowners only, not directors, shall have power to
i. any provision that affects number, qualifications, powers and duties, terms of office, or manner and time of election or removal of directors; or
ii. any provision with respect to amendment of any governing document.
3. Limits on Operating Rule Changes by Directors. Directors may adopt, amend, or repeal operating rules only if all of the following requirements are satisfied:
a. All operating rules must be
i. in writing;
ii. within directors’ authority conferred by law or corporate documents;
iii. not inconsistent with law and corporate documents;
iv. adopted, amended, or repealed in good faith and in substantial compliance with this model statute; and
b. Paragraphs 3d and 3e apply only to operating rules that relate to one or more of the following subjects:
i. Use of common property
ii. Use of a home, including any aesthetic or architectural standards that govern alteration of a home
iii. Homeowner discipline, including any withdrawal of privileges or charges for violating governing documents and any procedure for withdrawing privileges or imposing charges
iv. Any standard for delinquent assessment installment or other payment
v. Any procedure to resolve disputes
vi. Any procedure for reviewing and approving or disapproving a proposed physical change to a home or to the common area
vii. Any procedure for elections
c. For the following actions by directors, ¶¶ 3d and 3e do not apply:
i. A decision regarding maintenance of the common property
ii. A decision on a specific matter that is not intended to apply generally
iii. A decision setting the amount of a regular or special assessment
iv. A rule change required by law, if directors have no discretion as to the
substantive effect of the rule change
v. Issuance of a document that merely repeats existing law or the governing
d. Directors shall provide written notice of a proposed rule change to homeowners at least 30 days before making the rule change. The notice shall include the text, and a description of the purpose and effect of the proposed rule change, except as provided by ¶ 3d(iii).
i. A decision on a proposed rule change shall be made at a meeting of the directors, after consideration of any comments made by homeowners.
ii. Not more than 15 days after making the rule change, the directors shall deliver notice of the rule change to every homeowner. If the rule change is an emergency rule change made under ¶ 3d(iii), the notice shall include the text of the rule change, a description of the purpose and effect of the rule change, and the date that the rule change expires.
iii. If directors determine that an immediate rule change is required to address an imminent threat to public health or safety, or an imminent risk of substantial economic loss to the association, directors may make an emergency rule change; and no prior notice is required. An emergency rule change is effective for 120 days, unless the rule change provides for a shorter effective period. A rule change made under this ¶ 3d(iii) may not be readopted under this paragraph.
e. Homeowners holding 5 percent of the voting power may call a special meeting of the homeowners to reverse any rule change.
i. To call such special meeting homeowners must, no more than 30 days after being notified of a rule change, deliver a written request to the association’s president, secretary, or registered agent, after which the directors shall give notice of the meeting to all homeowners. Homeowners are deemed notified of a rule change after receiving notice of the rule change or enforcement of the resulting rule, whichever happens first. Homeowner requests to copy or review association member lists with addresses, e-mail, and phone numbers for the purpose of seeking support to reverse a rule change shall be honored as soon as reasonably possible, in any event within three business days. Homeowners shall be allowed to use common property reasonably in seeking support to reverse a rule change.
ii. At such special meeting with a quorum present, the rule change shall be reversed by majority vote of homeowners represented and voting, unless a corporate document or statute requires otherwise.
iii. Unless otherwise provided by the corporate documents, for this ¶ 3e, one vote may be cast for each home.
iv. Special meetings under this ¶ 3e shall follow laws generally applicable to special meetings.
v. A rule change reversed under this ¶ 3e may not be readopted for one year after the date of the meeting reversing the rule change. Nothing in this ¶ 3e precludes directors from adopting a different rule on the same subject as a
rule change that has been reversed.
vi. As soon as possible and not more than 15 days after the close of voting at a special meeting, the directors shall provide every homeowner with notice of the results of a vote held pursuant to this ¶ 3e.
vii. This ¶ 3e does not apply to emergency rule changes under ¶ 3d(iii).
4. Required Notice for Homeowner Votes on Assessments. Unless governing documents
require a longer period, homeowner votes to impose or increase regular or special assessments require at least 30 days advance notice.
Stability in governing documents protects homeowner expectations in buying a house. The
model statute first specifies how to resolve conflicts among governing documents, following
widely accepted rules of seniority, with the declaration (also known as deed restrictions or
CC&Rs, see Section 100 (¶ 2e), Definitions) being the most important.
Following the Restatement §§ 6.7 and 6.10, the model statute limits amendments of governing
documents, with super-majority voting requirements to secure rights that should not often
change, and to ensure essential consensus for major changes. Where directors have authority
over operating rules, the model statute ensures homeowner oversight following California law. 
The model statute would not permit management companies to impose operating rules, because managers may perceive an economic interest in generating violations and cannot be held directly accountable. Rule making by managers also raises the specter of retaliation against critics.
As recognized in the Restatement § 6.10, some rules, if not specifically authorized by the
declaration and recorded before a home is purchased, ought not be adopted without unanimous consent. These particularly include rules that restrict the use or occupancy of, or behavior within, individually owned units.  Voting rights also are fundamental as discussed in Section 108, The Right to Vote and Run for Office.
 See Cal. Civ. Code 1357.100 et seq.
 See also, e.g., Buddin v. Golden Bay Manor, Inc., 585 So.2d 435 (Fla. DCA 1991); Carey v. Brown, 447 U.S. 455, 471 (1980) (“privacy of the home is certainly of the highest order in a free and civilized society”).
Homeowners obtain adequate notice of proposed amendments in order to prevent a small group from organizing a vote before others can reflect and organize. All amendments remain subject to Section 106 (¶ 8), The Right to Individual Autonomy, requiring that terms in governing documents not be illegal, an undue burden on constitutional rights, or contrary to public policy. 
The scope of this prohibition may be broader for amendments than for initially drafted
The model statute specifically reserves two kinds of rights only for homeowners. One, in ¶ 2e(i), protects against efforts by a director to expand powers unreasonably, as well as against directors instituting self-preservation devices such as extended terms. The other, in ¶ 2e(ii), protects the amendment process.
Some states set super-majority homeowner voting requirements for amendments.  Other states contemplate that majority vote suffices for amendments.  Even where they do impose some limits, the Restatement recognizes a too-common problem: “[s]tatutes and governing documents frequently confer broad rule-making powers on common-interest-community associations, but may fail to specify the extent of that power over individually owned property.” 
The model statute here recognizes that associations can benefit from flexibility with respect to operating rules. See also Section 104, The Right to Be Told of All Rules and Charges (some implied power to make operating rules). Even on these matters, homeowners need oversight authority, because “operating rules can have a significant effect on member interests.” 
Experience cautions that specific requirements serve this better than generalities, and the model statute tracks California law.  Such procedures have added benefits of promoting homeowner understanding, acceptance, and compliance.
Fair notice cannot be accomplished by an announcement hidden in a newsletter that homeowners may not read carefully, if they read it at all. The notice must alert homeowners about significant proposed changes.
In addition to procedural requirements, all operating rules must be reasonable.  This reflects principles discussed in Section 109, The Right to Reasonable Associations and Directors.
Apart from amendments to governing documents and rule changes, homeowners deserve
stability in assessments. At a minimum, this requires advance notice so homeowners can
consider whether to support increased charges.
 See, e.g., Dyegard Land Partnership v. Hoover, 39 S.W.3d 300, 313 (Tex. App.--Ft. Worth 2001), following Hanchett v. East Sunnyside Civic League, 696 S.W.2d 613, 615 (Tex. App.--Houston [14th Dist.], 1985, writ ref.n.r.e.); Apple I Condo. Ass’n v. Worth Bank & Trust Co., 277 Ill. App. 3d 345, 659 N.E.2d 93 (1995).
 See, e.g., Harbour Estates, Inc. v. Basso, 393 So.2d 637, 639-40 (Fla. 4th DCA 1981).
 See Davis v. Huey, 620 S.W.2d 561, 567 (Tex. 1981) (absent proper notice when buying their home, homeowners cannot be said to have agreed to surprise amendments).
 E.g., Fla. Stat. Ann. 720.306(1)(b) (default requirement of 2/3rds homeowner vote for amendments other than of “rules”); see also Fla. Stat. Ann. 718.110 (2/3rds default to amend condominium documents, except 4/5ths vote needed for some purposes) & 718.111(7) & 113 (75 percent default requirement to convey condominium property or for substantial alteration); Holiday Pines POA, Inc. v. Wetherington, 596 So.2d 84 (Fla. DCA 1992); Ariz. Rev. Stat. 33-1227 (2/3rds vote for condo amendments, some exceptions); UCIOA § 2-117(a) (recognizes need for 2/3rds vote on some issues) & 2-117(f) (80 percent to prohibit or materially restrict the permitted uses or behavior in a unit, or restrict the number of people who may occupy a unit).
 E.g., Cal. Civ. Code 1355, 1355.5 & 1356; Cal. Code Regs. 2792.24.
 Restatement § 6.7 comment b, at 141; see also, e.g., UCIOA § 3-102(c) (can be read to allow some regulation of behavior inside or occupancy of a unit).
 Common Interest Development Law: Procedural Fairness in Association Rulemaking and Decisionmaking, 33 Cal. L. Revision Comm’n Reports 81, 88 (2002).
 Cal. Civ. Code 1357.100 to 150. See also infra Section 108(3) (discussing quorum requirements).
 See Nev. Rev. Stat. 116.31065 (rules must be reasonable); Cal. Civ. Code 1357.110(e); see also Cal. Code Regs., tit. 10, §§2792.15 to .28 (requires “reasonable arrangements” for assessments, meetings, and voting rights).
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