RE: bylaws/lenders/consensus -bylaws advice
From: Rob Sandelin (robsanmicrosoft.com)
Date: Wed, 24 Aug 94 13:50 CDT
 Jean Pfleiderer  made several good points about keeping your legal 
issues straight and she is absolutely right.  They are a fall back, 
when consensus or trust fails.  A good example of this sort of thing is 
in our architectural section of our Declarations. We have developed our 
own process of doing things as far as architectural control and as long 
as everyone agrees and is happy with that way then things are fine.  
However, if someone comes in a blows off the process and paints their 
house bright orange the Declarations give us another option. According 
to the legal rules, the  board must approve all modifications to the 
house. According to our legal documents the board can hire contractors 
to undo any unauthorized remodeling work and charge that cost to the 
owner.  Would we ever do this? God I hope not, but we could.  What is 
interesting to me is how few people in our community have actually read 
the Declarations or have even the slightest clue about what they 
contain.  For our day to day life they are meaningless, and are 
basically insurance against mass failures of trust or decision making.  
It really does pay to have that insurance, even if you never use or 
need it.  That's why we paid a whole bunch of money to a very high 
priced attorney - so we can do what we want to and have our butts 
covered if somebody comes along who doesn't want to play.

We just finished another consultation with another attorney.  One of 
the things he assured us is that we are only legally bound and liable 
for the things in the Declarations.  In his opinion, if we create house 
rules to the contrary of the Declarations and someone sues us for those 
rules, we are not liable for anything except what is spelled out in the 
Declarations.  However, in the case of an area where the house rules 
are in agreement with and refinement of the Declarations, the house 
rules are valid.  For example we have a pretty strict pet policy. The 
Declarations state that the board may adopt policies on pet ownership.  
Since the board minutes actually state the adoption of the pet policy, 
it is a legally binding covenant.

There are a large number of processes and situations which are not 
covered in the Declarations upon which we might be on shaky legal 
ground to enforce. For example we set up an agreement on the storage 
and disposal of toxic materials, including burning trash and other such 
things.  This is an example of an area not covered by the Declarations 
at all, and which may be subject to dispute, although since it is a 
house rule, and the Declarations clearly give the board the right to 
create house rules, It may actually be as tight as anything else.

In terms of voting, Jean brings up a good point. What is in your Legal 
docs is going to be what the courts will uphold if there is ever a 
dispute over a vote. Make your voting majorities 2/3 not 51%.

Rob Sandelin
Sharingwood (One of the few who read the fine print)


Rob Sandelin
Sharingwood

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