malvasia bianca

I’ve been on the board of the HOA of the townhouse complex that I live in for the last three years; and we just passed a new set of governing documents. And there was enough going on there that I figure I might as well write down some notes on it.

 

When we first considered buying here, we looked at the CCRs. (And the Bylaws.) There was a decent amount of stuff there that made me roll my eyes (no clotheslines in your back yard? drapes must be white or off-white?), but ultimately, there weren’t any deal breakers. (In particular, they allowed us to have dogs, which wasn’t the case for all of the HOAs we looked at.) And we liked and could afford the house, so we bought here; it’s been a good choice.

Over the years, issues with the CCRs have come up occasionally. The maintenance responsibilities aren’t super clear; one board paid a lawyer to give an opinion about what the HOA was responsible for, and that gave us some clearer guidelines, but it was still too vague: having the responsibilities depend on on knowing what qualifies as “trim” wasn’t great. But they were manageable, and passing a new set of CCRs seemed like a pain, so nobody did anything about it.

 

That changed five years ago: one board member felt motivated to change things, found a lawyer, and produced a first draft. At least I assume that process was mostly motivated by the feelings of that one board member: I wasn’t normally attending board meetings so I don’t know what discussion happened there, and the board didn’t actually tell people about it in advance. (I’m basically the only person who has served as a board member who treats communication with everybody as a priority…)

And, when I saw that draft, I was not impressed. There were a several sections that felt like that person’s hobbyhorses, and I didn’t agree with most of those hobbyhorses. It was structured in a really bizarre way, with a lot of stuff being listed both in the CCRs (which requires a very difficult vote to change) and in the rules and regulations (which future boards can change on their own), which made no sense to me; I don’t know how that happened. (And some of those items really did not belong in the CCRs.) And there was stuff that probably came from the standard template that that lawyer used that traded in one set of things that made me roll my eyes for another set.

So I complained about that version. Nothing much happened with it the rest of that year, and then that person left the board; the next board did a decent job of trying to understand points of contention in that draft and seeing if they could turn it into something that had a plausible chance of passing in a vote, but that was difficult, and they gave up after a couple of meetings.

 

I came on the board pretty soon after that; I can’t remember the exact timing, but either the next year or one year later, I think? At any rate, the first year I was on the board (during my current stint, I’d been on the board once before), our liaison on our property management company every once in a while would say to us “your CCRs are really out of date, state law has changed a bunch”, and I would nod and agree, but we had a decently large crisis around our fire alarm system, and of course COVID was happening, so I had other priorities that year.

And I also had other priorities the start of the following year, but one of the things that came up then was a lot more annoying than it should have been because the CCRs were unclear about who was responsible for what. So eventually, when things calmed down, I figured that, yeah, I had enough breathing room and this was important enough that I’d start looking into getting the CCRs changed. (There were two other people on the board, but neither of them was likely to take the lead in a big project, so if it was going to happen, I would have to spearhead it.)

We decided to start from scratch: in my opinion, the draft from the earlier attempt was unusable, and it had been long enough that my assumption was that, even if we’d wanted to edit it, probably the lawyer would have charged us more like we were starting from scratch. So I searched for lawyers; we ended up going with one that our property management liaison recommended, and I’ve very glad we did, he’s been very good to work with.

 

At this point, my questions were: Is updating our CCRs even possible? How much work was this going to take? What are my goals in this process? And what should I do to increase the chances of meeting my goals?

Taking those in order: for this to be possible, we need more than half the owners in the complex to vote yes on it. (Not just more than half of a quorum: more than half of the owners have to turn in a yes ballot, not turning in a ballot for this is the same as voting no.) Which is a pretty high barrier: it takes some amount of nagging to just get people to turn in the vote for board members every year, even though the HOA can’t function without a board.

But what I was more worried about was that the CCRs (or Bylaws, I can’t remember) have this clause that says that changes to the CCRs require approval from half the mortgage lenders, and the idea that half of them would provide approval for a CCR rule change felt very far-fetched to me.

Fortunately, our lawyer explained that this wasn’t nearly as bad as it seems: yes, mortgage lenders almost never respond, but there’s case law that says that we can treat their lack of response as a yes, as long as we wait 30 days. So mortgage lenders approval turns out to be the easy part, I just need to focus on finding 13 (out of 24) yes votes from the owners. And the lawyer’s process seemed pretty straightforward: he has a questionnaire that we’re supposed to fill out, he’ll plug that into his standard template (including specific rules that we ask for), there’s one round of reviews, and then he’ll prepare the materials for a vote, talk to mortgage lenders, and talk to the city.

 

I spent a while thinking about my goals: there’s a fair amount that I don’t like about the existing CCRs and would like to change, after all. But watching how the process had gone in the earlier attempt and seeing what the practical problems with the current CCRs had been, I decided that my first priority wasn’t actually to fix all of my pet peeves. What I really wanted was to have the maintenance responsibilities be clear (and I didn’t even care too much about the specifics of what owners were responsible for and what the HOA was responsible for: I mostly wanted clear rules), and the management company’s point that stuff should be up to date with current law made sense to me. And I cared about both of those more than I cared about fixing my pet peeves.

So, when I looked at those priorities, and I combined those with how the previous attempt fell apart because contentious changes were proposed and with the difficulty of getting votes at all, my main lesson was: I should try to avoid contentious topics, even if they’re about changes that I would like to see. There are 24 units in the HOA, and maybe I can convince 16 people to turn in a ballot if I work hard at it (but it will require work!); so I can only afford 3 no votes. And the more people argue, the greater the chance that we’ll have more than 3 no votes and/or that people will just feel uncertain about the process and will decide to not turn in a ballot at all.

Putting that all together, the story that I decided to tell folks was that our main goal here was to modernize the current CCRs. And we would explicitly try to avoid making changes to contentious areas of the CCRs: that meant that people with opinions on the CCRs (including me) would end up unhappy compared to their ideal result, but the new CCRs would hopefully still feel like an improvement over the old CCRs to almost everybody. And this also seemed like a goal that is compatible with our lawyer’s process (and in particular with the fact that we basically have one chance to ask for revisions on the draft): that goal should help limit the argument and gives a relatively clear criterion that we can use to make decisions about issues that do come up with the initial draft.

That seemed like a good approach pragmatically, but I also like it philosophically. If we want to, say, have an argument about changes to how people are allowed to rent out their units (which is one issue that came up in the last attempt), then that discussion will be a lot easier to have if we’re only having that discussion, instead of mixing it with a huge number of other changes. So what I would like us to happen is for us to modernize the CCRs (which, unfortunately, basically requires a complete rewrite), and then, in future years, we could have targeted votes on other more focused changes, changes that would only affect one or two paragraphs of the CCRs. That seems like a pretty healthy way to make changes.

 

So, with that in mind, the process was this:

1) Make sure that everybody knows that we’re talking about changing the CCRs, that our main goal is to modernize them while avoiding contentious changes, and that people will have two opportunities to provide feedback.

2) Fill out the questionnaire that our lawyer sent. (That was the first board meeting where people would have an opportunity to provide feedback.)

3) Once we got the draft, send it out to everybody, and schedule a board meeting to discuss changes to the first draft. (That’s the second opportunity for people to provide feedback.)

4) Get the second draft, schedule a vote, try to convince people to vote yes.

5) Get the mortage approval, and send it to the city.

Which was an amount and nature of work that I was willing to sign up for.

 

The questionnaire board meeting went pretty well. Two non-board-member owners attended; one quite reasonable person who didn’t have a strong opinion about the rewrite (but who supported it and our goal), and one person who was more opinionated, and who had been a major source of recent requests to the board. (And who was also the person who had been a driving force in the previous attempt to change the CCRs.) That person had reasonable enough stuff to say about questionnaire items, so the discussion was fine; and then she brought up something specific that she wanted in the new CCRs.

That specific proposed item sounded like a quite bad idea to me; so, after letting her talk for five minutes or so and not seeing the item get any particular traction from other participants, I checked with the other board members and made sure that they didn’t want to proceed with discussing the item, and then I said that she were moving on. She was annoyed (but not actively rude or anything) and left the meeting; it went smoothly after that, and we ended up with responses prepared for the questionnaire in a little less than two hours.

 

When we got to the draft, I read it a bunch and prepared a list of items that I wanted us to discuss and probably change, the other board members read it some, and one owner (not one mentioned above) prepared a pretty detailed list of changes. I thanked her and invited her to attend the board meeting about the changes, but she said that she wouldn’t do that, she didn’t do well in that kind of live discussion environment; so I said I’d bring her changes to the meeting.

And we went through all of the items that people had brought up. (I think the only non-board-member owner who attended was the aforementioned supportive person.) We came up with what seemed to me to be a reasonable set of requests to send back to the lawyer; again, it took just one board meeting and less than two hours, which was great.

I e-mailed the owner who had submited a list of changes after the meeting, basically saying “we talked about your changes, we agreed with you on these changes, we discussed the other ones but decided to not go along with your other proposed changes, and (for the ones that were larger) here’s our reasoning why we went a different way”. I was pretty happy with how that interaction had gone; I felt like we’d improved the CCRs based on her feedback, and she seemed to appreciate that.

 

So yay: we’d gone through the comment period without any big disagreements, it seemed like we were on a good track? Then two things happened. One is that one other owner emailed in comments on the draft; he did this maybe half a month after the board meeting where we were going to talk about that sort of thing, six weeks or so after we’d sent out that draft. I asked him if he really wanted us to schedule a board member for us to go over his comments; he said no, but he hoped we would make the changes he wanted anyways. Which is kind of a nonstarter!

Reading through his changes, I actually would have been happy to go along with several of them (though certainly not all of them) if they’d come up in the review period that we’d broadcasted; but they didn’t. The thing is, though, one of them did seem like it was pointing out something important that we missed (and, to his credit, he particularly emphasized that one); so I did talk that one over with the lawyer and the lawyer agreed that the clause in question wasn’t actually useful.

The other thing that came up was that our HOA liaison had one issue that he particularly wanted us to have addressed in the revised CCRs. This one at least did get brought up in a board meeting, just not the one that had been intended for that purpose; we went through a couple of rounds of email exchanges with the lawyer, but ended up not doing anything with that change.

 

So, after that, we were ready for the vote. It had gone pretty smoothly so far, I was optimistic that the vote would go well, but who knows. So we sent out the ballots, and I sent an email to everybody talking about our goals for this, the process so far, and the importance of voting.

I got some supportive emails; but also the same two people who had commented on the first draft sent out emails saying talking about what they were unhappy with about the proposed CCRs, and one of their spouses and one unrelated owner also sent a brief email supporting the concerns that those two raised. Both of them were taking the tack “we shouldn’t be voting on this now, we should do another round of changes”; I kind of rolled my eyes at that, we had a process for talking about changes, one of the two basically ignored the process and the other two just threw proposed changes over the fence while refusing to participate in the discussion? I’m not saying that the process was perfect, but if their goal had really been to get a better process leading to better CCRs, then maybe bring that up earlier instead of waiting until we’ve already sent out the vote?

Anyways, for both of them I took a pretty similar tack. Yes, the CCRs aren’t perfect, but I think they’re good enough; if we want to make it better, what I’ll propose is that we approve these broad changes and then have a subsequent vote on targeted changes that are important to people; and for the specific changes that you’ve called out as most important, here (in the least inflammatory language I could come up with) is why I either disagreed with your proposed change or why I didn’t think this topic is important enough to hold up the entire process for. (E.g. I’d do stuff like point out bits of state law that meant that a specific concern was already addressed by state law.)

 

I was kind of nervous after that. Clearly I had two, probably three no votes; and I could count on maybe 8 people to vote yes. But that leaves a whole bunch of people that I didn’t have evidence about; if almost all of them vote no or don’t vote at all, then it wouldn’t pass. (My earlier estimate was that I could get 16 out of 24 people to vote at all, so three no votes already uses up my entire buffer!)

At least there weren’t too many people who were openly complaining. So I figured that I wouldn’t worry about people being against it, but that I would worry some about people not voting at all. (Whether because they weren’t sure if it was a good idea or because they just didn’t get around to voting.)

And that seemed like something I could have an effect on. (My guess that 16 people would vote is just a guess, after all.) I obviously can’t learn how people vote before all the votes are opened, but our management organization was willing to tell me who had submitted votes. So I got the list of people who hadn’t yet submitted a vote, skipped the people who I either had reason to believe would vote no or whom I didn’t get along with on a personal level, and I emailed each the rest of the people encouraging them to vote. I didn’t actually encourage them to vote yes: I just encouraged them to turn in a ballot, and said I’d be happy to answer any questions they had.

 

And all of this seemed to work – 19 of the 24 households voted, and 16 of those households voted yes! Yay for that, always nice when things turn out well.

I did email people saying “if people were serious about wanting to make improvements to the draft CCRs, I’d be happy to make time in the next board meeting to discuss proposed further amendments”. And I got zero uptake on that offer; so yeah, I don’t think those two people really wanted to work to make the new CCRs the best they could be, probably what they really wanted was to stick with the old CCRs and were just trying to accomplish that while still trying to seem like they were participating in the process.

 

Anyways, I guess the lessons that I took out of this are:

• Figure out what’s most important to you, and make sure to prioritize that.
• Figure out what failure mode you’re most worried about, and make sure to prioritize that.

For the first of those, what I most wanted was to get modernized CCRs passed; I cared about that more than any particular change that I would have liked. And for the second, I was most worried about people just not voting at all: so I wanted to try to avoid having enough arguments that people weren’t sure which way to vote, and also I wanted to avoid people just not getting around to voting.

And that, in turn, meant that I tried to avoid controversy as much as possible, and to frame the new CCRs as sticking to the original CCRs as much as possible on controversial topics. That seemed like a message that I could defend while sounding as reasonable as possible, which would hopefully avoid the most argumentative negative scenarios? And also the second point meant that I should spend time pushing people actually send in their ballot; my personality is such that I normally don’t do that sort of thing, but this seemed like a situation where I should make an exception.

 

Glad my process worked; and glad that I won’t have to spend any more time thinking / worrying about this.