Oakmont Village Association Bylaws – Whats Next?
In a Sept 14th article to the Oakmont Observer, I indicated that there could be some “unintended consequences” if Article XI of the OVA bylaws were changed to allow a reduced quorum threshold to change other bylaws. Some possible changes were included in that article. Since that 9/14 article was written, a new issue has evolved with the bylaw revision process that requires some added comment.
After six months of reviewing comments from the community and other interested parties, the proposed March 11, 2020 resolution (that sought to change the quorum level for bylaw changes to 25% from the current 67%) was revised and approved during the October 20, 2020, OVA Board meeting. However, the new amendment seeks to include two revisions (not just for the bylaws but for both bylaws and CCRs) for the BOD to discuss with the community at a November 10, 2020 “town hall”. That current revised amendment could again be amended to reflect the community input or the resolution could also be presented as-is to the 3204 owners for a vote. Or, the whole resolution could be tabled for a later date.
As I read the resolution, the basic non-legal “bottom line” of the approved amended resolution indicates that:
A revision is sought to the original March 2020 amendment that had proposed a change to Article XI of the OVA bylaws to a 25% quorum for changing other bylaws. It was replaced with a 40% minimum quorum requirement and a “majority affirmative vote of OVA Voters”. The understanding is that “Voters” are lot owners or Garden Apartment tenants. (Although OVA President Spanier presented an amendment to increase the voting level to 55%, his suggested change did not pass.)
An ADDED amendment to the 3/20 original resolution revises two parts of the current CCRs – Article VII, Section 2 – Modification of Restrictions: The changes being sought are to 2(a) Method of Modification and 2(b) Consent of Members Required. Both 2(a) and 2(b) of the current CCRs require the affirmative consent/vote “of three quarters (¾) of the members of the lot owners or apartment ownerships in 2(a), and three-quarters of the membership of said association” in 2(b). Why there is a difference in the “lot owners and apartment ownership” and “members of the Association” is confusing and may need clarification after some review. No quorum requirement exists in the current CCRs for this section.
The revised resolution would change both of the above (2(a) and 2(b)) with an approval threshold of the “affirmative vote of a Majority of a Quorum of at least 40% of OVA Voters”. The quorum requirement is a new concept for this section of the CCRs.
Note: The original 2018 BRC (Bylaw Revision Committee) was charged with the task of looking at the OVA bylaws and other documents*. It should be noted that the BRC decided not to review CCRs or corporate documents since the primary concern was about the bylaws.
I personally do not agree with the 40% minimum quorum for bylaw changes; but, it may be a reasonable compromise if it is limited in its application to exclude major project financing requirements and long term commitments of OVA assets. However, I do not agree that the “Majority Vote of a 40% quorum” of the lot owners and Garden residents should be applied to changing Oakmont’s CCRs. CCRs are superior to bylaws and provide the primary legal structure for Oakmont. Changes to CCRs should be difficult and be reserved only for community-wide supported issues or federal/state legal requirements.
A 75% OVA membership approval requirement (currently 2403 of 3204) to change CCRs was included in the original OVA CCRs for various reasons and possibly associated with the original development process when a much lower number of lots existed. That is a very difficult bar to achieve and should be adjusted to a lower level. The approval of 50% of the total lot owners and Garden tenants (1602) would be more appropriate for CCR changes than the minimum (641)required in the 10\20\2020 revised resolution.
Finally, current or future BODs do have the ability to request a court to intervene due to “voter apathy” when the proposed changes are “reasonable amendments to CCRs”(Civil Codes 4235 and 4275 **) and at least 50% of the ownership had previously voted for the change but that vote did not reach the 75% requirement mandated by the current CCR Section 2 “Modification of Restrictions” 2(a) and 2 (b). Using that statute could be considered divisive, but it is available if needed.
With the above data as the basis, I respectfully request that the OVA BOD not approve a vote for the 10/20/2020 approved resolution or any resolution that changes the existing OVA CCRs, unless the CCR changes are mandated by state or federal laws to clarify existing CCRs.
* The Ad Hoc Bylaw Revision Committee (BRC) will: 1. Review the current OVA Bylaws (last updated in 1992) to propose updates that will bring them into alignment with current applicable California laws and regulations. 2. Consider and propose additional modifications that would modernize and update the OVA Bylaws, and where necessary to the Articles of Incorporation or other related governing documents.
** “The Davis-Stirling Act (Civ. Code §4235) allows for a simplified, non-voting amendment procedure solely to update cross-references to sections of the Act cited in CC&Rs and Bylaws. Civ. Code §4275 allows owners and HOAs to petition the court for approval of reasonable amendments to CC&Rs with less than the percentage of affirmative votes otherwise required under the CC&Rs if the required minimum number of votes isn’t obtainable, but more than 50% of the votes are in favor of the changes.”.