One of the questions that we are often asked is “What is required to amend the CC&Rs?” Civil Code section 1355 (Civil Code section 4270 starting in 2014) provides that an amendment to CC&Rs is effective after all of the following requirements have been met:
- The requisite approval of the percentage of owners as required by the governing documents has been obtained,
- Written certification of the approval by an officer of the association, and
- Recordation of the amendment
While the specific approval required must be determined by looking at the specific set of CC&Rs, most such documents require the approval of a super-majority of owners, typically 67% of the total voting power. If the CC&Rs are silent on the required percentage of owner approval necessary to amend the CC&Rs, then Civil Code section 1355 provides that an amendment may be approved by a majority of all members.
If there are multiple classes of membership, it is not uncommon for the CC&Rs to require the approval of a super-majority of each class of members to also be required. In addition, certain types of amendments may require the approval of first mortgagees (the banks who hold the mortgages on the various units or residences in the association), or even the city. The types of amendments which require the approval of the first mortgagees are spelled out in the CC&Rs, and typically are limited to amendments which could adversely impact the security interest of the mortgagee, such as amendments changing the manner in which assessments are imposed or allocated among the various owners.
How Do We Vote?
Once the required approval percentage is determined, the Davis-Stirling Act requires that voting on the proposed amendment must be done by the double envelope secret ballot process set forth in Civil Code section 1363.03(b) (Civil Code section 5115 starting in 2014), with the votes counted at an open meeting so that the vote counting can be observed by the members. The ballot must contain the proposed amendment to be voted on by the members.
What If We Don’t Achieve Quorum or the Required Number of Ballots?
It is often difficult for associations to obtain the votes of even a quorum of members therefore obtaining the required number of ballots for a CC&R amendment is often extremely difficult. Boards and the association’s Inspector of Elections may extend the balloting in order to solicit ballots and maximize member participation in the vote. If an association cannot achieve the super-majority required by the CC&Rs, the Civil Code provides a “safety valve” for those situations where the need for a super-majority vote is not obtained. Civil Code section 1356 (Civil Code section 4275 starting in 2014), allows for possible court approval of the amendment if at least a majority of members approved the amendment, and the association has made a good faith effort to obtain the required membership approval.
When is the Amendment Effective?
If the various approval of the members and, if necessary, the first mortgagees, is obtained, an officer of the association (typically the secretary) must provide written certification of the approval of the amendment by the members. The amendment must then be recorded, at which point it is effective, and the process for amendment of the CC&Rs is complete.
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