Articles

Tips for Amending Your Bylaws

By Patrick Collins, Attorney at Law

At our office we receive a lot of questions from our community association clients on many issues. The purpose of this article is to answer a common one on amending your bylaws.

There is not a single set of bylaws in existence that could not be improved. Sometimes those changes may be minor, such as changing the designated date of the annual meeting, and some are significant changes, such as modifying the election process. Whether making a change to your bylaws is worth the trouble is the first question. If bylaw modifications seem prudent, I suggest you consult with your association’s attorney to get an idea of what may be involved. In the meantime, but here are some tips.

In general, the basic rule is that the board of directors can modify the bylaws of the non-profit corporation - the association - unless your governing documents state otherwise. Often developers draft governing documents, such as bylaws, without giving much thought to how it may work out after they leave and turn everything over to the homeowners. Developers are focused on getting the lots or houses sold and not so much on the association’s business procedures. Usually, the developer has near total control and can unilaterally modify covenants and bylaws as desired – so there is usually not much reason for developers to make bylaw changes.

Once homeowners take over the association’s board and governance, they are faced with electing directors, collecting assessments, enforcing covenants, and taking care of the common areas. Over time, problems with the bylaws start to show themselves. Common shortcomings clients identify to our firm are things like the number of directors, term lengths, getting directors’ terms to be rotating so every position is not up for election at the same time, handling proxies, the quorum number being impossible to meet, and many other things involving the business management part of the association.

So, to amend bylaws, the first step is to figure out who can make the change:  the members or the board? Check to see if there is any conflict between what the declaration states versus what the articles of incorporation and the existing bylaws say about amending the bylaws. We see conflicts in documents  quite often. If those governing documents do not address the question of who has the authority, then the board can amend the bylaws under Alabama law.

The second step is to simply come up with a list of issues you see in the bylaws that may need to be addressed and communicate those to your association’s attorney. I suggest you use an attorney who has done this before, because the next step is critical for a successful bylaw upgrade project. Also, if possible, schedule a meeting with the attorney and as many board members as possible so the directors are “on the same page” during the amendment project.

Third, have the association’s attorney review your list of issues and make recommendations for any additional changes. If you are going through this process anyway, it is best to complete as many good bylaw improvements as you can at one time, especially if it is going to require a vote of the membership. I find our clients appreciate seeing these suggestions and gain confidence that what they are doing is going to help their neighborhood – which is the point after all.  

The fourth step is simply reviewing the drafted changes and approving them. If it takes a members’ vote, a meeting of members may be required, along with using properly drafted proxies. If your board has the authority to approve the changes, we often recommend publishing the proposed changes to the membership prior to the board voting. Your board meeting minutes should reflect the action.

Last, once the bylaws are passed, they should be properly signed and attested to by the appropriate officers. While bylaws do not have to be recorded in probate, I highly recommend that our clients take that final step.  

Your bylaws are important. They not only provide operating protocol, they can protect your association and its members if challenged in a court of law. In any event: read yours. Just because the bylaws have been around a while does not mean they are sound.

© Copyright 2022, Patrick Collins, LLC, Attorney, Daphne, Alabama. Used by permission.

Flag Display Controversies Continue

By Steven F. Casey, Esq. - Jones Walker LLP

A recent news story is a reminder that flag display controversies continue to be an issue for community associations to address.  An Alabama woman appeared on “Fox & Friends” recently to complain that her neighborhood homeowner association has demanded that she remove her U.S. flag display.  (Alabama homeowner defies HOA request to remove flag pole: 'Old Glory is still waving' | Fox News).

The homeowner claimed to have sought Association permission to install a stand-alone flagpole in her front yard, but after waiting 3 days for a response, proceeded to have the structure installed without permission.  A few weeks later, a letter from her community association instructed her to remove the flagpole.  She has resisted, saying that she and her family are patriotic and wish to honor her family’s military service by flying the nation’s flag and the U.S. Army flag in this way.

The restrictive covenants for this particular community state very clearly that “[no] flag poles, other than those mounted on the home and no longer than four (4) feet shall be erected on a Residence without the prior written consent of the ARC.”  That particular association seems, therefore, to have a reasonable basis for its position.

In addition to an association’s covenants, of course, there are statutory provisions that must be considered.  The Freedom to Display the American Flag Act, Pub.L. No. 109-243, 120 Stat. 572 (2006), restricts the ability of community associations to prohibit their members from flying the U.S. flag.  Under the Act, however, HOAs are permitted to place reasonable restrictions on the time, place, and manner of the display to protect a “substantial interest of the association.”  Whether an association’s restrictions on the flying of the U. S. flag are “reasonable” or not, and whether those restrictions serve a “substantial interest of the association,” of course, are matters of judgment.  If an association’s statement of policy is challenged in court, it is likely that a local, elected, circuit court judge will be the one to make that determination.

While there is no way to predict the outcome of such litigation with complete accuracy, judicial decisions from a few such cases give us some guidance.  Generally, the courts have viewed restrictions that moderate the size of U. S. flags displayed, as well as their placement on or near homes, have been upheld.  Such approved guidelines for the display of our nation’s flag most often seem to have uniformity of display within a neighborhood as the main goal.

Even if a policy is sound and complies with the law, an owner who believes that the restrictions in the HOA policy are unreasonable could still file suit and cause the Association to spend thousands of dollars litigating the issue.

Earlier this year, a bill providing similar restrictions on an HOA’s ability to prohibit the flying of the Alabama state flag, was introduced in the Alabama legislature.  I have not yet determined whether that legislation was ever passed.  The terms, however, were essentially the same as the federal legislation referenced herein.

Restrictions on the display of other flags (political, seasonal, sports-related, etc.) are easier to support and do not violate any widespread legal principles.  Although some homeowners have challenged such restrictions on free speech grounds, courts have generally held that since HOAs are not governmental entities, they are not subject to such arguments, as long as the display restrictions don’t favor specific political positions over another.

Some associations prohibit sports-related flags, while some allow them.  Some associations allow them with restrictions, such as game day display only, but those kinds of restrictions, while appearing to be reasonable and strike a good balance, often present enforcement challenges.  The same is true with seasonal flags.

In light of the potential controversy over this issue, it is wise to ensure that your association’s governing documents state your flag policy clearly and that you enforce them uniformly.  No matter how hard you try, however, you may attract unwanted media attention.  If that happens, seek legal assistance as needed, early in the process.