The Bylaws Revision: First Look

Sound Legal has returned bylaws revision language for us to review. The board has proposed addressing the articles section by section, with discussion in board meetings. Here is what we found and how you can participate.

What Makes a Good Bylaw?

A good bylaw is clear, legal, and supports best practices to improve governance and reduce conflict. The Homeowner Document Review identified 9 questions that every article needs to address.

Checklist for Success: Sound Legal Bylaw Language

Overall, the Sound Legal bylaws revisions address many concerns on the checklist for success. Applying the checklist reveals gaps which will need to be addressed in the next revision.

Article 1: No timeline for new owners to register ("promptly" is undefined). No officer assigned to maintain the register.

Article 2: Director election tie-breaker could leave board positions vacant indefinitely. Special meeting agenda exclusion power is very broad and could be abused.

Article 3: Board size variance (3-5-7) and term adjustment power could be used to pack the board. Three-absence removal provision (3.7b) is immediately void but still in the text. Emergency meeting "unforeseen event" category lacks definition.

Article 4: Conflict-of-interest provision (4.10) is entirely conditional on Articles being amended — currently unenforceable.

Article 5: Committee anti-exclusion language has exception that swallows the rule. Committee reporting timeline ("promptly") undefined. No committee quorum rule specified.

Article 6: Annual reconciliation is too infrequent (should be monthly or quarterly). "Reasonable fee" for inspection is undefined and could become prohibitive.

Article 7: Code of Conduct has no enforcement mechanism — purely aspirational. D&O insurance is discretionary ("may") not mandatory ("shall").

Cross-References to Address When Companion Articles/Policies Are Drafted

• Enforcement obligations currently diffuse across articles need consolidation in companion policy

• Meeting disruption definition needed (what constitutes disruption under Section 3.12/3.15? Why is this written twice?)

• Reserve study and financial review/audit requirements need explicit inclusion or cross-reference

What About the Structure?

You might notice that some of the articles have changed and now cover something different to our original bylaws. While the Sound Legal revision is a functional starting point, the structure is more useful for a lawyer who reads the entire document than a volunteer with volunteer tasks (how do I notice a meeting? what records do I keep? how do I run an election?). 

1. Notice provisions scattered across three articles with no cross-references, which can be difficult to track.

2. Voting procedures are not all grouped together, which again creates unnecessary difficulty

3. Records are also scattered. Currently, Article VII addresses all notices, and Article IX all records.

Grouping sections by task helps volunteers find information quickly, and can be referenced in sections about member meetings, board roles, and financial obligations instead of repeating the same information in many places.

Homeowner Document Review

Our Homeowner group, previously known as the Governance Committee, was able to compare Sound Legal’s revisions with committee notes from the last 3 months. We noticed that we had more key homeowner protections in place, and we will be making sure these suggestions are part of the conversation going forward. 

Here is what we are noticing and thinking about in Articles I and II:

• If a homeowner’s status is challenged, is there a fair process to cure their documents?

  • Can we prevent that homeowner from being disenfranchised for an honest mistake?

• Should member definition be provided in the bylaws or the covenants?

• 50% quorums are rare - that’s 146 people participating! What does an achievable quorum look like for members meetings (that's where we get to vote on actions!)

• Should absentee ballots be a right, or a board choice?

• What are the muting rules for a member meeting?

• Who should handle ballots? Why or why not?

• How do we better use digital tools to reflect the in-person elections bylaws were originally designed for?

• What happens when elections are disputed?

• How do members vote without a meeting? What are the pros and cons of this?

What Comes Next

If you are interested in creating Bylaws with a built-in Homeowner Bill of Rights, we’re still going! We’ll be revising our notes on these articles next, then continue our study with Articles IV and V.

Connect with Homeowners

The board will have to determine their own process. Currently, the board is on track for an open discussion on Articles I & II on May 19. 

Article I is about membership, and reflects current Article II.

Article II is about members' meetings (ie, annual meeting), & reflects current Article III.

There is additional language about board elections and budget ratification, both of which occur in these meetings.

There is no work plan for completion, and no benchmark for what ‘complete’ looks like at a board level. The plan for ongoing public participation is unclear.

The Governance Committee (now Homeowner Document Review) recommended a work plan in their April 2 report. They also asked the board to approve or comment on the ‘checklist for success.’

Failure by the board to adequately address either item has resulted in the current rift, and presents an obstacle to formal partnership.

We hope that the board will revisit the work provided by the committee.

Your Role In This

You are a homeowner, and in 3 years you may be the one looking at the bylaws to answer a question, or for protection.

Without a work plan, the process may be unpredictable. We need to be proactive to have a voice in the rules we will live under.

• Go to board meetings; they’re on Zoom - be present in bylaws discussions

• Comment if you can; ask the board about process; ask them how the bylaws will support members, volunteers, and the assets we share.

• Add comments to the HDR website so we can support you, too!

• Know what you will and won’t agree to. Write it down. This will come to a vote; you want your decision to be based on evidence, not personality.

  
  

Get to know the Current Bylaws