Amendments to Dedicatory Instruments Flashcards
If we are amending the Bylaws, Declaration, or Articles, where should we look first to see the requirements for amendment?
The document itself.
TX Biz Org Code 22.105
What is the process to amend an Articles of Incorporation if an Association is managed by a Board of Directors and its Members have voting rights (like almost all HOAs)?
1) Board must adopt a resolution that specifies the proposed amendment and directs the such proposed amendment be submitted to a vote of the Members at an annual or special meeting.
2) Written notice containing the proposed amendment or a summary of the changes must be given to each member in the meeting notice (10-60 days or 20-60 days prior to meeting). May transmit notice by mail or email.
3) An amendment to an Articles of Incorporation is considered a “Fundamental Action” under the Texas Business Organizations Code. As such, it will require the affirmative vote of at least 67% of all members within the Association.
++Exceptions-
1) Articles may require a greater percentage vote to amend.
2) If there are multiple classes of homeowners, then you must have at least 67% of each class.
How is the process to amend an Articles of Incorporation different if the HOA has no board of directors and is managed by its members?
There is not Board resolution. There only needs to be:
1) Written notice of the meeting in accordance with 209.0056 (10-60 days)
2) Vote of 67% of membership as it is a fundamental action.
If the Board and Association both vote and pass an amendment to the Articles of Incorporation, what must happen next?
Association must sign and file a Certificate of Amendment with the Texas Secretary of State
What are the requirements for a Certificate of Amendment of an Articles of Incorporation?
1) Name of filing entity
2) State entity is a Nonprofit entity
3) Any provision of the Articles that are added, deleted, or amended. If deleted, you simply need to state the section. If amended or added, then you need the text.
4) Statement that amendment has been approved in accordance with the governing documents of the Association and applicable Texas law.
Will an amendment to an Articles of Incorporation affect any existing claims or causes of action against the Association?
No.
No pending lawsuit has to be abated or refiled because of a name change brought about because of an Amendment to an Articles of Incorporation.
With regards to amendment of Bylaws, what does Section 22.102 of the Texas Business Organizations code state?
Section 22.102(c) of the Texas Business Organizations Code. It states:
The Board of Directors may amend or repeal the bylaws or adopt new bylaws, unless:
1) The certificate of formation wholly or partly reserves the power to amend in the members;
2) The management is vested in the members; or
3) The bylaws expressly state that they may not be amended by the board of directors.
Section 209.00593 of the Texas Property Code provides that any board member who term has expired must be elected by members. Further, any board member may be appointed to fill a vacant position shall serve for the remainder of the unexpired term of the position. May a board unilaterally amend its bylaws to comply with that provision?
Yes. Per Section 209.00593(b), the board of a POA may amend the bylaws to provide for elections to be held in accordance with the provisions of 209.00593.
May a POA amend its bylaws in a manner that would cause them to conflict with the Declaration?
No.
If you want to amend a condominium declaration, where should you first look?
The condominium declaration itself.
Per TPC 82.067, what are the requirements to amend a condominium declaration?
NOTE- this section is for Post-TUCA condos only.
A declaration, including plats and plans, may be amended only by the affirmative vote of 67% of the members of the association, or any larger percentage that the declaration specifies.
Exception- If the condominium is restricted to nonresidential use only the declaration may specify a smaller number.
What is the procedure to amend a Pre-TUCA condo per TPC 81.111?
Per TPC 81.111, a condominium declaration may be amended only by the affirmative vote of 67% of the members of the association.
What are the major differences in the amendment process between TPC 82.067 and TPC 81.111?
TUCA:
1) If the property is restricted to non-residential use, the declaration may specify a smaller percentage of the vote to amend. if it was filed post TUCA. PreTUCA does not have this exception.
2) TUCA associations must use the declaration amendment vote percentage if it is higher than 67%. Pre-TUCA associations must always use 67%.
3) TUCA associations may amend their declarations in limited circumstances without approval of the owners. Section 81 does not allow these amendments without approval of the owners. Examples include:
a) Reallocation of limited common elements and unit boundaries by owners.
b) Subdividing units
May Pre-TUCA owners reallocate their interest in the limited common elements or subdivided their units and record an amendment to the declaration (with only board approval)? May they do so without involving members?
No. They must involve the members.
TUCA unit owners may do so without involving the members.
How may an amendment to a condominium declaration be enacted under TPC 82.067?
Applicable to post TUCA only.
1) By written ballot that states the exact wording or substance of the amendment and specifies the date by which a ballot must be received;
2) At a meeting of the members after written notice of the meeting has been delivered to each member stating the purpose of the meeting is to consider an amendment to the declaration; or
3) Any other method permitted by the Declaration.
What is the statute of limitations to challenge an amendment to a TUCA condominium amendment?
1 year from the date the amendment is recorded.
May an amendment to a condominium declaration create or increase special declaration rights?
No.
May an amendment to a condominium declaration do any of the following:
1) Increase the number of units?
2) Change boundaries of a unit?
3) Alter or destroy a limited common element?
4) Change a unit’s allocated interest?
5) Change use restrictions on a unit?
Only if approved by 100% of the votes in an association or unless otherwise provided in TUCA (eg may change unit boundaries of TUCA unit upon owner agreement and board agreement)
May an amendment to a TUCA declaration increase or modify the obligations imposed by a declaration on a declarant or reduce or modify the rights granted by a declaration to a declarant?
No, not unless the declarant agrees.
What are some circumstances where a declarant in a TUCA association may record an amendment to the declaration without the vote of the member?
1) Curing a defect with a proper execution of the Declaration
2) Records new plats or plans for purposes of exercising a developmental right
Does the board need a vote of the members to record an amendment to the declaration upon condemnation of a portion of the condominium?
No.
This is applicable to pre and post TUCA.
If allowed by the Declaration, may a Board of a condominium amend the declaration without a member vote in order to meet the requirements of FNMA, Federal Home Loan Mortgage Corporation, FHA, or VA?
Yes.
Member approval is not needed if stated in the Declaration.
Post-TUCA Only
Before a condominium association may adopt a new dedicatory instrument or amendment to a dedicatory instrument, how must the association give notice of the amendment to the condominium members?
1) Give each unit owner a copy of the amendment or change that would be made.
2) It must be given to each member between 10-20 days prior to the meeting. It may be mailed or hand delivered to each owner (with receipt)
Post TUCA Only
Who must prepare and execute an amendment to a condominium declaration?
President of the association unless another officer is designated to sign by the board.