There comes a time for most community associations when they need to make some updates or amendments to governing documents. Here’s an overview of what you can expect from the revision process if your HOA is in Colorado.
Why You Should Update Your Governing Documents
When your association’s original documents are no longer serving the community’s needs, it’s time to update them. Your original documents could be too vague, no longer pertinent, or simply in need of some additions to become current.
Of course, you cannot make any amendments or changes that go against your state or federal laws relating to community associations. Every association will also have its own process in place for how a governing document can be amended or revised, so make sure you’ve studied your own procedures.
To change an existing document, the association will have two main options. They could make the updates through an amendment (or amendments) or create a brand-new document called a restatement. We recommend creating a brand-new governing document if the document in question is over a decade old or if multiple amendments are needed to bring the document up to date. This will be more efficient and cost-effective.
How to Amend Your Community Association’s Governing Documents
Amending your association’s documents will take time and money. An attorney will always need to be involved. While you may be able to get a first draft of the new amendment from the attorney in a few weeks, getting the revised documents finalized can take as long as a year.
Even the best proposed amendment is useless if it cannot gain the proper support from the members within the association. In the state of Colorado, sometimes you’ll only need a simple majority for an amendment to pass, but in other instances, you may need at least two-thirds approval. This is why it’s crucial to communicate the potential for changes to all the members. You should communicate what those amendments are and why they are being suggested and how the members would benefit.
Some of the ways you can communicate with members include town hall meetings, the community newsletter, and email blasts. Make sure you give members plenty of time to think over the changes and ask questions.
If you’ve proposed multiple amendments at once, make sure you allow members to vote on the different amendments separately. Otherwise, you could end up with members giving a blanket “no” for all the proposals because they approve of some but not all the proposed changes.
How to Keep Your Governing Documents Current
To keep your documents as up-to-date and relevant as possible, we recommend reviewing them every five years. Your association will need to budget accordingly since the amendment process can get expensive. While the legal fees associated with a single amendment may be as low as $300, you could end up paying over $10,000 for a more extensive package of changes. The cost can vary depending on how many times you need to meet with an attorney, how many revisions there are, and the willingness of members to accept the proposed changes.
While the revision process can be time-consuming and expensive, it’s well worth it so that your association no longer operates based on rules and regulations that no longer serve the members. When your governing documents are updated and accurate with clear directions, everyone benefits!