You’ve all heard the terms Resolution and Amendment, but do you understand the differences between the two? These are two terms we hear often and refer to how boards make their decisions regarding their community.
A Resolution memorializes decisions made by the Board of Directors to address specific issues or clarify the Governing Documents and are used in managing many associations. Resolutions provide guidelines, procedures or rules and regulations to help the day-to-day operations. They are typically passed by a majority vote of the Board and are used to deal with things, such as, approving a budget, establishing rules for common areas, or addressing violations of rules and regulations. It will contain such things as information on the purpose of the Resolution, what action follows, and where the Board’s authority to make that decision comes from (i.e. a specific section of the CC&R’s). Resolutions validate and support the Board’s policies.
Use Resolutions when you are clarifying ambiguous language in policy documents; establishing new rules or procedures not explicitly mentioned in the Governing Documents (they cannot be in conflict with the Governing Documents); addressing specific issues or concerns raised by Member of the Association; and memorializing approvals such as annual budgets, assessment increases and any procedural changes.
How do you make a Resolution?
- Identify the policy or change that requires a resolution.
- Discuss the proposed policy or change during an Open Board Meeting.
- Vote on the policy or change and document it in the meeting minutes, ensuring it passes by the required majority of Board members.
- Draft and sign the Resolution memorializing the Board action and notify the community members.
Amendments are changes made directly to the Governing Documents (i.e. Declaration of Covenants, Conditions, and Restrictions (CC&R’s), By-laws or Articles of Incorporation. These types of changes require a more formal and rigorous process than resolutions, often involving a majority vote from the community membership or the Board of Directors. Approving an amendment means you must follow a strict process as provided by your Governing Documents and typically involve a period of notice and an opportunity for members to comment on the proposed changes. This helps to promote transparency and fairness in the decision-making process.
Use Amendments when making changes to the Governing Documents, CC&R’s, By-laws, or Articles of Incorporation; updating the Governing Documents to comply with new laws or regulations; amending outdated restrictions or change rules to modernize existing rules and covenants; alter existing rules or restrictions that impact property rights.
How do you make an Amendment?
- Seek legal counsel to ensure compliance with laws and regulations.
- Present the proposed Amendment to the community members for discussion.
- Hold a vote or written consent process (check the Governing Documents for language that may allow the Association to utilize the written consent process or voting by absentee ballot or in person. Again, seek legal counsel for the accurate process of your community).
- Record the Amendment or file it with the appropriate governmental agency (your attorney will assist with this process).
- Publish the Amendment on the community’s website or shared portal.
Always check with your legal counsel to ensure that you are using the correct process as directed by your Governing Documents.