Are Your Documents Awful?
Nearly every time someone asks us a question regarding their association's obligations, their individual duties, the proper method of taking action, or virtually anything related to association activity and governance, we begin our answer with, "Well, it all depends on your documents."
Of course, certain things are dictated by law, but more often than not, your documents spell out the detailed issues that aren't specifically addressed by statute. Your documents - your Declaration, Bylaws, Articles of Incorporation, Rules, and Policies - dictate how your association must respond to various situations. If you want to hold a special meeting - look to your Bylaws. If you want to know how many directors you need to have - look to your Articles of Incorporation and Bylaws. If you want to know whether you are responsible for maintenance - look to your Declaration.
Unfortunately, some documents can be awful.
When the original developer drafted the documents thirty years ago, he didn't think about the confusion it would cause when he used the terms "deck" "patio" and "porch" interchangeably. Window wells and the allocation of responsibility never crossed his mind. While the developer drafted those documents to create your community, he also drafted them to protect himself from liability and so some provisions effectively prevent associations from enforcing their legal rights against other parties. Sometimes, the attorney drafting the documents didn't understand the difference between a condominium and a townhome, and the documents make little sense.
Even if your documents do not contain obvious problems, time passes and the laws governing associations evolve, rendering documents that were once useful and compliant obsolete. Most every association will eventually need to amend and restate their governing documents, whether due to obsolescence or simple bad drafting. If your association is looking to fix bad documents, answer the following questions and discuss them with your legal counsel:
- When was the association created? If it was before July 1, 1992, does the association want to subject itself to the complete Colorado Common Interest Ownership Act?
- What in your current documents "doesn't work"?
- Have your documents caused legal problems in the past?
- Are there conflicts between the documents that require resolution?
- Are there provisions in your documents that are no longer legally enforceable?
- Are there conflicts between how your association operates and the requirements of the documents?
- How do you want your association to operate?
- Are you financially able to amend your documents?
- Are you prepared to undertake the work required to obtain approval for amended documents?
The complete amendment and restatement of your governing documents is time consuming and expensive. It can, however, help you avoid liability caused by the conflicting, confusing, and improper provisions that are commonly found in older documents. It can also help your association's daily business flow more easily, in a manner that reflects modern technology that was not contemplated thirty years ago.