New Ruling May Mean Less Leeway To Amend Governing Documents
A recent ruling by the Arizona Supreme Court seems to significantly curtail the ability of associations in the state to amend their governing documents. And the impact of the ruling could be felt beyond Arizona’s borders.
The case involved a small HOA outside Tucson, with only five lots. The lots range from 3.3 to 6.6 acres, except for the plaintiff Kalway’s lot of 23 acres. The CC&Rs provide that they can be amended “at any time by an instrument executed and acknowledged by the majority vote of the owners” under the general amendment power provision.
A “majority vote” is four of six votes. Kalway’s lot is entitled to two votes, and the other lots each come with one vote.
In 2018, the other property owners amended the CC&Rs by majority vote without Kalway’s consent or knowledge. The amendments change some definitions and add others, create new restrictions, and enact new enforcement measures for covenant violations. The new restrictions limit owners’ ability to convey or subdivide their lots, limit the size and number of buildings on each lot, and reduce the maximum number of livestock permitted on each lot.
Kalway went to court to invalidate the amendments. The trial court entirely invalidated two sections of the amendments and partially invalidated two others. Kalway appealed, arguing that all of the amendments are invalid without unanimous consent. The Court of Appeals affirmed the trial court decision.
The state Supreme Court agreed to review the case because it raised issues of statewide importance regarding the scope of an HOA’s authority to amend CC&Rs.
Learn how the case was decided, and what it could mean for you: