Does Your HOA Need Covenant Revitalization?

covenant revitalization

Homeowners associations in many states will have to go through covenant revitalization at one point or another. It is important for board members to familiarize themselves with this process to avoid lapses in authority.

 

Covenant Revitalization: Do HOA Covenants Expire?

An HOA covenant is essentially a contract or agreement that homeowners associations enter into with its members. These covenants govern how the community operates, the responsibilities of board members, and the obligations of homeowners. In essence, covenants are the rules of the community, though they differ from operating rules. And, similar to other contracts, covenants do have a shelf life.

In a lot of states, HOA covenants that are more than 30 years old expire. When an association allows its covenants to expire, it can give rise to a wide range of problems for both the HOA board and the community as a whole.

This is where HOA covenant revitalization comes in. Covenant revitalization is a process that reinstates or revives the covenants of a homeowners association. It essentially restores the old covenants and makes it as if no lapse had transpired at all.

 

What Happens When HOA Covenants Expire?

Homeowners associations operate with the authority given to them by state laws and the declaration of covenants found within their governing documents. When covenants expire, they are no longer enforceable. This means that the homeowners association basically ceases to exist, and board members don’t have the power to collect dues, enforce the rules, or make any decisions. The entire community will fall into disarray, with no governing body managing the common areas or making sure everything goes smoothly. In the end, property values will plummet, and it is the homeowners who will bear the consequences.

 

How to Revitalize HOA Covenants

The process of┬árevitalizing HOA covenants can vary from one state to another. Homeowners associations must refer to their state’s Department of Community Affairs for the full step-by-step process of covenant revitalization. As a guide, though, the entire procedure typically consists of the following steps:

  1. Propose the revitalization of the HOA covenants.
  2. Obtain majority approval from the membership to proceed with covenant revitalization.
  3. Submit the newly revitalized governing documents to the appropriate state department or agency.

The specifics of the process can differ depending on where the HOA is located. For instance, Florida law requires that at least three unit owners propose the revitalization of the HOA covenants. After that, the association must disseminate the proposed covenant revitalization to all members and have a meeting. A notice of the meeting must also be properly distributed.

The law in Florida also requires HOAs to get a court reporter or attorney to certify proof of notice of the meeting. Then, within 60 days of securing a majority vote from the membership, an HOA must submit the proposed governing documents to Florida’s Department of Economic Opportunity.

On the other hand, some states allow associations to “preserve” their existing covenants and avoid the revitalization process. Typically, this only applies to covenants that are less than 30 years old.

As with many things, homeowners associations would be wise to hire an attorney for help with this matter. Similarly, an HOA management company can help associations go through the process.

 

Can You Change HOA Covenants During the Revitalization Process?

Sometimes, a homeowners association will want to update HOA covenants during the revitalization process. While this is technically possible, HOAs should still refer to the specific rules of their state or ask an attorney for guidance. They must also follow the proper amendment procedures outlined in their governing documents.

Taking Florida as an example once more, the law states that the new covenant can’t consist of more restrictive covenants than the old one. This means the new covenant must contain the same number of covenants as the one before, though there are a few exceptions. These exceptions include:

  • The new declaration may have a longer term.
  • Homeowners associations can remove restrictions from the old declaration.
  • The new covenant can govern fewer homes or units than the old one.
  • The new declaration can consist of new amendments.

 

How to Amend HOA Covenants

While the process for amending HOA covenants may not be the same for all associations, it generally consists of the following steps:

 

HOA covenant revitalization1. Review and Draft the Amendment

The first thing a board should do is review its existing documents and draft the proposed amendment. This will typically require the help of an attorney to figure out the language and make sure the amendment does not conflict with other covenants.

 

2. Distribute Amended Documents

The board should then distribute the proposed amendment to the members of the community. They can do this via email or include it in the newsletter or post it to the community website (whatever the governing documents stipulate). Communicating the proposed amendment ensures that all homeowners know of the impending change.

 

3. Schedule a Meeting

Once owners have had the chance to review the change, the board should then schedule a public hearing of sorts. This should, of course, come with proper notice of the meeting. During the meeting, homeowners can voice their feedback and concerns about the amendment.

 

4. Make Suggested Changes

An HOA board should not just schedule a public hearing for the sake of it. Board members should listen to homeowner input and seriously take them into consideration. Then, they can make adjustments to the new amendment based on feedback from the homeowners. Again, this will require the help of an attorney.

 

5. Vote and Adopt

Typically, amendments to the bylaws or covenants will require a majority vote from the membership to be approved. Operating rules, on the other hand, will only usually need the board’s vote.

 

revitalizing HOA covenants6. Disseminate and Educate

Once the amendment has passed, the board should disseminate the information and educate homeowners about what the amendment entails. It is good to have a Q&A portion at the next board meeting to clear up any misunderstandings. Alternatively, homeowners can reach out to the board via email, text, or phone (if possible). Many boards prefer not to be bothered by phone calls and emails, so they outsource the job of homeowner communication to an HOA management company.

 

A Part of Board Education

For many homeowners associations, covenants have a limited span of life. Covenant revitalization prevents HOAs from losing their authority and bridges the gap between the old and the new. As such, board members should make it a part of their ongoing education to learn about this critical process.

Condo Manager provides software solutions to both homeowners associations and HOA management companies alike. Call us today at (800) 626-1267 or contact us online for a free demo.

 

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