(originally published in Fall 2000)

THE BYLAWS:

– generally set forth the mechanics of how a corporation is to operate (these days, most homeowners associations are incorporated  as non-profit mutual benefit corporations)

– govern how the membership votes to elect the directors of the association – enumerate the powers and duties of the board of directors and the limitations thereon

– set forth how the meetings of members are to take place (e.g., notice requirements, quorum, voting, use of proxies, place and   time of the meetings, attendance, etc.)

– contain requirements for the board of directors meetings (location, notice, quorum, telephonic/video appearance, action without  meetings)

– address vacancies on the board and removal of directors

– enumerate the officers, committees and their duties

– govern the keeping of associations books, records and financial statements

– address members’ and directors’ rights to inspect association documents

– set forth the fiscal year of the association

REVIEWING THE BYLAWS

Even though the Bylaws generally serve to set forth the mechanics of how the association is to operate, the Bylaws need to be reviewed periodically to ensure that they are current with California law and are best serving the interests of the owners.  In performing that review, the following may assist you:

– if your Bylaws are more than five (5) years old, they should be reviewed and updated to reflect any new laws.  Some of the following recent changes to the California Corporations Code probably affect your Bylaws:

– Quorum.  The quorum requirement for membership meetings may be one-third (1/3) of the owners (as opposed to    the higher requirement of a majority of the members), so long as the bylaws do not provide for a different amount.     Most association bylaws set forth the majority requirement and should be amended to indicate the one-third (1/3) requirement if obtaining a quorum for the annual meeting is an issue.    – Participation at Board Meetings.  Due to the “high tech” world in which we are now living, the Corporations code recognizes that, in certain circumstances, directors may “participate” in board meetings through the use of various communications devices such as conference calls, electronic video, etc.

– if your Bylaws are at least ten (10) years old, they should be reviewed to ensure that the association’s practices are in conformance with the Bylaws requirements (e.g., older Bylaws often set a specific date to hold the annual meeting, such as the third Monday in February and the association may have long since abandoned that date)

– if a provision conflicts with the association’s CC&Rs or Rules and Regulations, the language should be amended to ensure consistency with the governing documents

– certain items must be contained in the Bylaws.  For instance, allowing cumulative voting must be set forth in the Bylaws.  Similarly, written ballots (not proxies) are non-revocable unless the Bylaws provide otherwise

– the number of directors and term lengths are set forth in the Bylaws.  If the association has changed the number of directors and/or term lengths, the Bylaws must be consistent with those changes

– the Bylaws set forth the qualifications of directors.  The association may wish to add certain qualifications that may not be contained in the Bylaws, such as mandating that directors (and candidates running for director positions) be current in payment of assessments and owners within the association

– the powers and duties of the board should be reviewed and modified if the board believes that there are additional powers and duties that should be enumerated in the Bylaws

– if amendment to the Bylaws requires more than a majority vote of the members, that provision should be amended to allow a majority vote to amend the Bylaws