Judge: Layne H. Melzer, Case: 2023-01304905, Date: 2023-08-03 Tentative Ruling

Petitioner Beacon Hill Terrace Condominium Homeowners Association

Petition for an Order Modifying Voting Requirements to Amend CC&RS

Petitioner Beacon Hill Terrace Condominium Homeowners Association’s unopposed motion for an order pursuant to Corp. Code, § 7515 to modify the voting requirements to amend its governing documents is granted.

Petitioner states that in August of 2020, the Association began an effort to amend the CC&Rs to address five issues: (1) to address changes to laws and standards for homeowner association in the thirty-nine years since the adoption of the Governing Documents; (2) to reduce approval requirements for amendment of the Governing Documents; (3) to address circumstances in the Development that did not exist when the Association was originally formed; (4) to modify and clarify the rights and responsibilities of the Association and its members; and (5) to remove obsolete developer-specific provisions.

Currently, 75% of the voting power of the membership is required to amend the CC&Rs.  Amending its bylaws requires an affirmative vote by a majority of the membership. In addition, amendment of the governing documents requires approval of the Federal Housing Administration (FHA) and/or the Veterans’ Administration in the event that either organization insures or guarantees any mortgage or provides any form of assistance with respect to the Development.

Pursuant to the Petition, from November 2021 to April 2022, the Association held numerous meetings, sent out multiple notices, went door-to-door to request owners return ballots, and even created a raffle with monetary incentive to encourage members to attend the meetings and vote on the amendments. (Comito Dec., ¶¶ 22, 24-27.) Despite this, the Association only received 24 ballots. (Comito Dec.,¶ 29.) Not only was the number of ballots received insufficient to obtain the super-majority approval required for amending, but it was not enough for a quorum (i.e., 29 ballots) to even hold a meeting to open and count the ballots. (Comito Dec., ¶¶ 28-29.)

Corp. Code § 7515 applies in situations like these to permit an Association like Petitioner to dispense with certain voting requirements if it is impractical or unduly difficult for a corporation to conduct a meeting of its members and obtain consent to undertake certain actions.  The purpose of the statute is to overcome membership voting apathy.  (Fourth La Costa Condominium Owners Assn. v. Seith (2008) 159 Cal.App.4th 563, 583 [“As with Civil Code section 1356, Corporations Code section 7515 is intended to ‘overcome membership voting apathy.’”].) It permits the court, as with § 1356 with regard to the declaration, to retroactively approve amendments to the articles and bylaws.”  (Id. at 583.)   The Court may do so “in such a manner as the court finds fair and equitable under the circumstances,” but where practical, should “limit the subject matter of the meetings or other forms of consent authorized to items, including amendments to the articles or bylaws, the resolution of which will or may enable the corporation to continue managing its affairs without further resort to this section.”  (Corp. Code §7515(a), (d).)   

On 6/26/23, the Court entered an order setting the hearing on this matter for 8/3/23, and proscribing the method of notice to the homeowners and process for opposing the Petition. (ROA 16.)

On 7/21/23, Petitioner filed a declaration from its attorney who stated that the Association mailed the Court’s 6/26/23 Order to the Association’s members and posted the Order at the Association’s mailboxes. (Mahar Decl., ¶ 3.)  The notification provides a website where members can view the Petition.  Petitioner states that it received emails from three member units objecting to the Petition.  In the emails, the members state that they would like the voting requirements and governing documents to remain the same.  Some state that they don’t believe that the HOA should have complete control over the community.  However, this is not what has been proposed.  Rather, Petitioner wishes only to modify the voting requirement to amend the governing documents, because it has been unable to obtain 75% participation.

No oppositions have been filed with the Court.

Because the Court finds Petitioner’s proposed amendment to be reasonable, it grants the Petition.

Petitioner shall give notice to all homeowners.