What is the difference between an HOA resolution vs amendment? This is a question many board members and homeowners ask. To understand the differences, it is first essential to understand what role each one plays in an HOA. Board members can’t always make resolutions as a way to sort out an issue. There are procedures and requirements to satisfy.
The Importance of Distinguishing HOA Resolution vs Amendment
Board members should know the distinction between a resolution and an amendment. This is vital to ensure the HOA board follows proper procedures. Failing to do so can have their decisions called into question. Furthermore, improperly enacted resolutions or amendments can lead to problems down the road.
When a board passes a resolution or enacts an amendment incorrectly, that resolution or amendment may be deemed unenforceable later on. This can result in the reversal of many past decisions and actions, including violations, fines, and other penalties. Before long, the board will have to backtrack on everything.
Additionally, homeowners will question the legitimacy of other board decisions in the past. Those unrelated to the resolution or amendment will suddenly be scrutinized under a microscope. After all, if the board made a huge mistake this time, it is possible they had done it before. Ultimately, this will damage the trust owners have in the board.
What is a HOA Resolution?
Resolutions are official documents created by the HOA board to record their decisions on specific issues or to clarify the community’s governing documents. They explain the resolution’s purpose, actions to be taken, and the origin of the board’s authority. In short, resolutions help formalize and support the policies of the board.
These resolutions are essential for managing a community association. They set supplementary guidelines, procedures, or rules to help with day-to-day operations. The HOA board usually approves resolutions through a majority vote.
Types of HOA Resolutions
There are three types of HOA resolutions: administrative, policy, and special. Let’s break them down below.
Administrative Resolutions
Administrative resolutions, also known as procedural resolutions, focus on the association’s internal workings and processes. They cover rules for conducting board meetings, holding elections, and handling architectural change requests.
Policy Resolutions
Policy resolutions directly affect the rights and responsibilities of homeowners. Boards use these resolutions to clarify unclear sections of the governing documents. They can also establish new policies permitted by those documents.
Often, the CC&Rs provide limited guidance, making it difficult for the board to make informed decisions. In such cases, a policy resolution can be very useful. These resolutions can address various issues, such as the appearance of homes, the use of common areas, pet rules, and more.
Special Resolutions
Special Resolutions are designed to address specific situations. Boards can use them to introduce new rules that existing guidelines don’t cover or to handle particular issues on a case-by-case basis.
What is a HOA Amendment?
An amendment is a change made directly to the governing documents. An amendment is necessary if an HOA wishes to edit or add to its CC&Rs, bylaws, or articles of incorporation. Unlike resolutions, amendments follow a more formal process with much stricter requirements. More often than not, an amendment requires a majority vote from the membership.
When considering an HOA amendment, it is imperative to turn to state laws. Some states, like North Carolina, have specific requirements for passing an amendment. Section 47F-2-117 of the North Carolina Planned Community Act requires a 67% vote of approval by homeowners to amend the declaration, with exceptions.
In addition to state laws, an HOA’s governing documents may contain specific requirements and procedures for passing an amendment. The process may involve providing notice, seeking comments or input from homeowners, and using a certain voting method.
What is the Difference Between a Resolution and an Amendment?
Is a resolution the same as an amendment? The simple answer is no. While HOA resolutions clarify the governing documents or provide supplementary guidelines, amendments change the governing documents directly.
When to Use HOA Resolution vs Amendment
An HOA board does not need to pass a resolution every time it makes a decision. It is best to use resolutions in the following situations:
- Clarifying unclear or vague language in the governing documents
- Enact new rules or procedures that the governing documents don’t expressly mention (but don’t contradict the governing documents)
- Address specific concerns or problems that homeowners raise
- Record approvals related to dues increases, annual budgets, and changes in procedures in line with the governing documents
In contrast, it is best to use amendments in the following situations:
- Revising, adding, or removing provisions within the governing documents (CC&Rs, bylaws, articles of incorporation, etc.)
- Updating the governing documents for legal compliance
- Changing covenants or rules to modernize outdated restrictions
- Amending existing restrictions or regulations that affect property rights
Voting Requirements
In general, resolutions only need a vote from the HOA board. On the other hand, amendments typically mandate a majority vote (or a super-majority vote) from the homeowners.
Precedence
Do HOA resolutions take precedence over amendments? No, resolutions do not take precedence or override amendments. Amendments are direct changes to the governing documents. Therefore, resolutions can’t conflict with them. If they do, amendments take precedence over resolutions.
HOA Resolution vs Amendment Example
It is difficult to fully grasp the differences between amendments and resolutions without the proper examples. Here are some that may help board members better understand.
HOA Resolutions Examples:
- Approving the annual budget and establishing regular dues for members
- Assigning the roles of the board directors and officers
- Addressing rule or bylaw violations
- Enacting rules that govern the use of common areas and facilities
- Crafting policies such as collection policies and fine policies
HOA Amendments Examples:
- Changing board member terms
- Revising the voting rights of homeowners
- Altering the rules on property use (such as short-term rentals, home businesses, leasing, etc.)
- Annexing additional property or facilities into the HOA
- Introducing a new fee, such as a working capital fee, an initiation fee, or a resale reserve fund fee
- Revising the CC&Rs and bylaws to comply with newly passed or changed federal, state, or local laws
It is crucial to remember that resolutions and amendments are not confined to these examples. They can still vary depending on the community’s rules and needs.
HOA Resolution vs Amendment Explained
Resolutions and amendments may share similar qualities, but they are vastly different. Board members should understand the role each one plays and when to use them. Meanwhile, homeowners should also learn the distinction between the two to keep board members in check.
Juggling an HOA resolution vs. amendment can be challenging. Make things easier for your board with the help of an HOA management company. Call Cedar Management Group at (877) 252-3327 or contact us online to learn more!
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