Beware the folly of eliminating supermajority voting for amending the HOA CC&Rs

The latest drive by pro-HOA attorneys and lobbyists has been to seek legislation to do away with supermajority amendments to the CC&Rs.  If approved, the very foundation of majority rule in a democracy, and our long standing requirement that fundamental documents must have supermajority voting in order to be amended,  would be destroyed.  The argument is, Gee, because of the apathy, we can’t make important amendments to the CC&R.  

In the 2011 Arizona legislative session, HB 2441 was defeated at the last moment.  It would have allowed for minority – as low as 1/3 of the members — to amend the CC&Rs.  The CAI lobbyists fought hard for this bill, even telling the committee that although  it was governmental intrusion, the legislature always did that. 

Think for a moment.  If a minority can control the amendment process, it can control the HOA by enacting amendments that further strengthen the powers of the incumbent board.  Given the fact that the rogue boards are dominated by their HOA attorneys, minority control solidifies the political machines as the power elite. 

Think about it!  Under a political machine minority vote regime, the regime can eliminate all and every need for member approval, except, of course, voting for directors.  And, all future amendments will have this acceptable ground for the amendment — the apathy of the membership demands minority control.  Nobody cares, so what!

However, in spite of this persuasive argument, the infinite wisdom of the California legislature shines brightly when it enacted laws in the Davis-Stirling act permitting just such amendments as valid. Section 1356 addresses minority control of an HOA.  This section 1356 is an oxymoron and is an unreasonable and illogical intrusion on the private contract and to our fundamental belief in majority rule in a democracy.

Section 1356 allows for less than supermajorities where the governing documents require more to amend the governing documents.  So a 60% voting requirement would allow for minority control.  There is no restriction in the law on the lower limit for approval except to appeal to the judge that “this ain’t right.”  In other words, like the failed Arizona bill, 1/3 can be acceptable, and even a 20% requirement would be acceptable.

The lunacy of this law is that a majority voted amendment to reduce supermajority voting requirement is valid, if approved by a judge.  Go figure!  The law has circumvented the CC&Rs private contract putting the cart before the horse!  That the members have spoken is the basis for this requirement, in spite of evidence of psychological indoctrination to obey and legal pressures of financial harm for not obeying. (See Why do people harm others in HOAs?)

But if a supermajority was needed, as currently required by the CC&Rs, the amendment to amend before the court would fail. I mean, isn’t that why the HOA is before the court?  They can’t get anything done with a supermajority! 

How to get a supermajority vote?  It’s done every day, everywhere.  The content and need for the amendment must be conveyed to the membership in an open forum, an open meeting, and be debated before the membership.  And not in some one-on-one private meetings or phone calls. 

There is no requirement in the law to hold an open meeting of the membership to debate the amendment before approving the elimination of supermajority voting.  A requirement that is found in all legislative and state agency rule-making procedures – public input.

 

In the recent court opinion (Quail Lakes Owners Assn. v. Kozina (2012) 204 Cal.App.4th 1132), the homeowner does not challenge the validity of this law, but advances procedural arguments under the law.  That was a big mistake (he lost), as I’ve repeated argued, of not seeing the ugly forest through the trees. The mandatory requirement under § 1356(c)(5), that “the amendment is reasonable” was never argued as I’ve argued above.  In fact, my arguments above were made loudly and clearly in defeating Arizona’s HB2144, and that defeat went to the very last vote.

This decision is another example of bad law becoming a detrimental precedent against homeowners.  If you think you have problems now, wait until your HOA blindly obeys the board and allows for  a minority controlled HOA.

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