Perhaps the most important tool you have as a Board member to help in your governing responsibilities and decision-making process is the association’s set of governing documents. It is the foundation for every decision you make and the playbook for how those decisions will be executed into action. Like everything else in the association, however, governing documents also need maintenance and updating.
Here are a few key areas of the governing documents that might suggest it is time to either amend sections or re-state the entire document:
Developer/Declarant Rights – most Declaration of Covenants (other common titles: Declarations or Covenants, Conditions and Restrictions) have language and numerous sections that instruct how the association should be run and give rights to the developer/declarant when the association is first incorporated and still under “declarant control.” Once the association turns over to the membership and starts to be controlled by a Board of Directors, those sections are irrelevant. They are worth removing to clean up the document and eliminate any confusion.
Ambiguous or Missing Information – the older the document, the more confusing the language can be. Some common examples of ambiguous information can be the definition of unit boundaries, listing of common elements and limited common elements, clear description of maintenance responsibilities, and scope of insurance requirements. If you find yourself spending the money to seek legal opinions for clarification, it’s a good sign you might need to amend and re-state the document(s).
Alignment with State Laws – it can be common for governing documents to contradict state laws. Under the Minnesota Common Interest Ownership Act (“MCIOA” or 515B), most sections of the statute preface by saying “unless the association’s documents say otherwise…” If the association’s document predates MCIOA, the association could be missing out on key provisions of the statute that better position the association for success. For example, MCIOA gives the Board authority to levy a special assessment. If the association’s governing documents, however, require the membership to approve a special assessment, state statute would default to the governing docs, and the Board would have to seek approval. It’s an example of a significant hamstring the Board could have on the operation of the association. In most instances, it befits the association to be a part of MCIOA and re-state the documents to both align and reference state statute.
Outdated Communication & Voting Requirements – some simple but powerful components should be a part of all governing documents. The bylaws should allow for proxy voting. Options for voting by mail and electronically should be incorporated. Delivery methods for communications should extend beyond the dated “mail only” option. Voting and communication requirements in the governing documents are a telltale sign of the age of the documents, and a good signal that it is time to amend or re-state.
Language Style – typically, the older the document, the more it sounds like a room full of lawyers drafted it. While modern day documents certainly use legal phrasing and key terms, they tend to be more clear and easier for a layman to understand.
Amending or re-stating governing documents can be a complicated endeavor. But again, they are your most powerful tool. If your documents are dated and issues listed above interfere with your interaction with them, it is a worthy cause to update.