OVA Governing Documents Progress Report – 2025 January 7
The OVA Governing Documents Ad Hoc Committee (renamed from the Bylaws Ad Hoc Committee) meets on the first Tuesday of each month at 1 pm in Suite B of the OVA offices. The Committee web page, with links to all posted agendas and meeting minutes, can be found at https://oakmontvillage.com/article/author/bylaw-revision-committee/ . Minutes are now being approved and posted soon after the Committee meets. These provide the permanent documentation of Committee activities and decisions. For this month’s meeting, the agenda is posted here.
In today’s meeting, it was reported that Nathan McGuire, the attorney who is supporting the work of the Committee, should soon deliver proposed re-stated governing documents (see Phase 1, below). It was also reported (Agenda item VII. A.) that the Committee will present a list of candidates for Committee membership to the OVA Board of Directors (BOD) at its next meeting on January 21.
Of particular interest at today’s meeting was a discussion (under agenda item VIII. A.) of the proposed 5-Phase strategy for updating the OVA governing documents. This strategy is to be presented for approval at the January 21 OVA BOD meeting. As I understand it, these 5 phases are as follows (this is unofficial, from my notes and memory of today’s meeting):
- Update governing documents to bring them into regulatory compliance — In the six decades since our documents were created, laws and regulations have changed a huge amount, but our documents have not been updated to keep up. The OVA BOD has a responsibility to update our documents, in order to bring them into compliance. The plan is to do this by re-stating all of our documents, i.e. by replacing the current documents with new ones that comply with the law but which otherwise are the functional equivalent of our existing documents. I.e. this phase will not introduce any changes for the variety of substantive issues (e.g. 2 votes for a 2-member household, member votes on major capital improvements, etc).
- Amend the CC&Rs and the Bylaws, to lower the requirement for making future amendments — Amending the CC&Rs or the Bylaws requires a vote of the OVA membership, and the current/original requirement for passing an amendment (majority of the voting power of the OVA membership for Bylaws amendment, 75% of the voting power for CC&R amendments) is so stringent that it is very difficult to achieve — the slightest hint of controversy, or any coincidental factor that lowers the voting turn-out, is likely to spell defeat of an amendment. Therefore, to facilitate passage of future amendments, the second phase will focus on lowering the amendment approval requirements to make it easier to pass future amendments.
- Amend the CC&Rs and the Bylaws, to implement desirable changes for OVA governance — This phase will include consideration of substantive Bylaws amendments that have been proposed over the years. The Governing Documents Committee will recommend amendments to the OVA BOD, who, upon approval, will hold elections in which the OVA membership will adopt or reject them.
- Review OVA rules to ensure compliance with the revised governing documents — The Committee will recommend rules changes to the OVA BOD, to ensure compliance with the revised governing documents and with state law.
- Final wrap-up — The Governing Documents Committee will prepare a final report to the OVA BOD and, after delivering it, will be dissolved.
Note that Phase 1 changes will be subject to the current stringent requirement for passage, but these changes are required by law to be made. There should be no reason to vote against these changes, but if people are confused by the process, or if the turn-out is insufficient to achieve the required thresholds, the vote could fail. In this case, the OVA BOD will be forced to either try again with more public education followed by another election, or to take the issue to court, which will have the authority to order the changes to be made.
Phase 2, amending the provisions setting the thresholds for voter approval of amendments, will also be subject to the same current stringent thresholds. The Committee will have to choose their recommended thresholds carefully because, although clearly they need to be lowered from current levels, if the thresholds proposed to the membership are too low, the amendment will be controversial and will not be approved.
The next regular meeting of the Committee will take place on February 4 at 1 pm in Suite B of the OVA offices. Among other topics, there will be an informative discussion of the circumstances under which a vote of the OVA membership (i.e. you and me!) is required by law in order to change our governing documents (CC&Rs, Articles of Incorporation, Bylaws). If you would like to see first-hand how the Committee operates and what progress they are making, you should consider attending.
Phase 1 is housekeeping. It should be done but since we’re obligated to follow the law, it will only make for easier reading by members.
The decision on Phase 2 is critical as you note, Bruce. Governing documents should not be amended by anything less than a clear majority of members or a supermajority of voters.. The last go-round in this endless process included a proposal to lower the bar to allow an activist minority to govern the OVA.
I couldn’t agree more, and I will personally oppose an amendment that lowers the bar too much!
With respect to the requirement of the CURRENT Real Estate Code’s requirement of a membership vote on large capital projects, like many/most/all statutory changes to the status quo, shouldn’t 2792.21 be regarded as an intended substantive change in legal requirements for HOAs?
(The documents of the Orchard and Meadows HOAs could not have been originally stated lacking 2792.21 requirements precisely because the law changed since other Oakmont HOAs – and OVA- were chartered/incorporated. One assumes Incorporating 2792.21 didn’t happen because the new HOAs wanted to have those requirements but because the law at the time of incorporation then required them.)
If the objective of updating the documents to conform to current legal requirements via restatement is to preserve the essence of our documents EXCEPT as they have been altered by changes in the law, and then to restate the documents as if they were being written now, in conformance with current law, then a reasonable deduction is that the requirements of 2792.21 must be reflected in the new documents.
What a blessing it would be to have this issue decided via the restatement process by this logic, with all parties simply acknowledging – whether begrudgingly or enthusiastically – that, regardless of positions and preferences, the documents should conform to current law, and current law is 2792.21!
I agree with your logic, and I hope that 2792.21 is a requirement for restatement of bylaws, but I am not sure whether or not this is the case. I asked Copilot (Microsoft’s AI chatbot) whether or not any restatement would have to include 2792.21 and it said yes, but I asked a lawyer with some expertise in HOA law, and he said no.
One point that was clear from discussion in the January 7 Committee meeting was that the Committee feels that they should and must submit Phase 1 changes to a membership vote. Their legal advisor convinced them that the avenue of making minimal changes required by law without a membership vote would be unwise or illegal.
I think the logic of the contrary argument is relatively easy too: OVA dox do not reflect the Real Estate Code b/c they predate its effective date; OVA could have chosen to incorporate the new requirements — or adopted some other restriction and vote requirement – if it wished, but has not done so; the Board does not wish to do so; therefore the restatement should reflect the status quo on this issue unless and until the dox are properly amended to include the Real Estate Code restriction and membership vote requirement or some other restriction and vote requirement.
That said, if the asserted point of view of the restatement is the law as it applies today, I think the logic that 2792.21 should be reflected is the more persuasive proposition.
And, as noted, it would be such a peaceable blessing for the community if the restatement rationale were considered and used as a requirement to incorporate 2792.21, thus putting this longstanding contentious issue to bed.
However attractive the thought that this could be settled almost automatically, we have a record of legal opinions, and practices, that suggest otherwise. The appeal is obvious. Excluding members from a direct say in the decision, less so.
Personally, I favor the provision, but is it appropriate for all HOAs all the time? The intent of HOAs was to provide residents with a measure of self-governance. I believe OVA members if given a vote will vote to require member approval of large projects. I prefer to have this policy decided by members in Oakmont, not Sacramento. Looks easy to me.
The hard part is getting a Board that will allow it to be put to a vote. This is why it is also important, if we are ever able to make reasonable amendments to the Bylaws, that the potential for member-initiated Bylaws amendments is preserved. This is a key feature that the 2020 Board removed from the Article XI amendment proposed by the 2019 Bylaws Revision Committee, causing controversy which doomed that amendment.