Changing Outdated By-laws
Greetings!
Our POA had to revert back to our original by-laws from the year 2000 as ordered by a local court due to the changes and revisions not being done correctly.
Our by-laws have two different quorum thresholds to meet depending upon which Articles are needing to be changed. We believe that changing how votes are counted from per-acre to per-parcel would meet our owner’s expectations better as we no longer are under Declarant control as the by-laws were made during that time.
The quorum required to change from the outdated voting per acre to voting per parcel is a minimum of 2/3 of total acreage of the members. This threshold is impossible to ever meet realistically as our participation rate is at most 10% of total acreage (folks with multiple large parcels get many more votes than those with one small parcel).
AI stated that unless there would be State legislation passed to eliminate this type of supermajority lock, we will be stuck with this way of voting.
Are you aware of any cases or examples of how to legally change the unattainable supermajority lock we have?
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Cari,
The first thing we have to clear up is what you mean by “bylaws”. The CC&Rs (Declaration) are required to establish each homeowner’s allocated interest. Allocated interest consists of the financial share of the association cost and the voting rights for each homeowner. While Bylaws can govern how the association conducts its business, they cannot change or modify any provision of the CC&Rs. I suspect that your voting rights provision is in your CC&Rs, not your bylaws, or your bylaws simply duplicate the provisions of your CC&Rs. The allocated interest for every homeowner, established in the CC&Rs, is a very big deal and cannot be changed without the unanimous consent of all owners. Which as you realize is an impossible condition to satisfy. Under both Property Servitude Law and Arizona Case Law in the Supreme Court’s Kalway decision.
While I agree that the requirements are awkward and not typical, they are what they are and are actually unrelated to declarant control in any way. These were the conditions that everyone agreed to when they bought their property. While you could not change them, they were your voting rights established in the Declaration. A ten-acre lot has more voting power than a one-acre lot.
While there is a provision in Property Servitude Common law that would allow an association to seek judicial relief for a provision in the Declaration that unreasonably limits the ability of the association to conduct the business of the association, I do not believe that this voting provision could ever be overturned by a court under that approach.
While I work hard to codify the fundamental principles of Property Servitude Law into State Law and have developed proposals that would relax some of the extreme requirements in individual declarations, I would never propose a change that would affect a reasonable property right of any individual homeowner in favor of other homeowners. The buyer of a one-acre parcel knew going in that they would not have the same voting power as a person who bought a 10-acre lot. If you wanted the same voting power, you were free to buy a 10-acre property. Nor do I believe that the Legislature would ever support such a proposal.
Sorry
Dennis
Dear Dennis,
Thank you very much for your detailed response and for sharing your expertise.
You are correct — the one-vote-per-acre voting provision (including the former Declarant’s nine-vote multiplier) is explicitly established in Section 3.J of our Declaration of Covenants, Conditions and Restrictions (CC&Rs). We now have a clearer understanding of why this allocated interest is so difficult to change under Arizona law and the Kalway decision.
Given our consistently low participation rates (typically around 10%), we are seeking any realistic or creative approaches that might allow us to modernize our governance structure. If you have any additional thoughts or suggestions on possible next steps, we would greatly appreciate them.
Thank you again for your time and insight.
Best regards,
Cari