Amendments to governing documents come in many different shapes and sizes - there is the limited, single issue amendment or the comprehensive amendment which amends and restates the entire document. Regardless of which your community is tackling, the following list of the 10 most common amendments should be considered.

1. Limit Liability of Directors
 
The Colorado Nonprofit Act allow associations to eliminate or limit the personal liability of a director to the association or to its members for monetary damages for breach of fiduciary duty as a director, except that any such provision may not eliminate or limit liability of a director for the following: (a) any breach of the director’s duty of loyalty to the association or its members; (b) acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of the law; or (3) any transaction from which the director directly or indirectly derived an improper personal benefit. In order to take advantage of this provision, the limitation must be included in the association’s Articles of Incorporation.
 
2. Indemnification
 
The Colorado Revised Nonprofit Act includes expanded indemnification (i.e., reimbursement) provisions that should be included in the Bylaws for the Association. While the Act provides that directors’ liability may be limited, this does not mean that a suit cannot be filed. To the extent a lawsuit is filed, the directors, officers and committee members should be indemnified by the association so they do not have to pay their own legal fees. The association should also maintain directors and officers liability insurance to fund the indemnification obligation.
 
3. Amendment Provisions in Declarations
 
In light of issues raised in the West v. Evergreen Highlands case, it is prudent for any association that does not have express language in its amendment section providing that amendments may be made to add new provisions to the declaration to amend this section to include all options for amendments, including, but not limited to amending, revising, removing, repealing, and adding new provisions, covenants, conditions, conditions, restrictions or equitable servitudes.
 
4. Right to Evict Tenants 
 
In some cases owners are less than cooperative in addressing covenant violations by their tenants as long as the tenant pays the rent on time. Many associations have adopted provisions that authorize the Board to evict a tenant who violated the covenants or rules if the owner fails to do so and the cost is assessed against the owner. 
  
5. Maintenance Issues
 
Many declarations are drafted before construction of the units. Although the document drafter will generally address maintenance issues based on the type of construction, often as the community matures, maintenance issues come up that may not be clearly addressed in the declaration. Rather than continuing to seek legal opinions regarding allocation of maintenance responsibility, it may be more cost effective for the association to amend the declaration to address maintenance issues not clearly addressed or to reallocate maintenance responsibility, if appropriate.
 
6. Insurance Issues
 
There are generally three levels of coverage available for condominiums and townhome communities: bare walls coverage (rebuilds back to the sheetrock); single entity coverage (rebuilds to original specifications) and all-in coverage (rebuilds to condition when damaged, including betterments and improvements). Different levels of coverage involve different cost to the association.  Depending on the insurance requirements in the declaration, some associations may not have flexibility to purchase different types of coverage. Ideally, the association should have this flexibility.
 
Insurance deductibles on association policies are increasing. If allocation of deductibles is not addressed in either the covenants or the association’s insurance guidelines, the association will pay the deductibles for claims on its policy. Many associations require the owner to pay the deductible if the repair would be the owner’s responsibility in the absence of insurance. Under some HO6 policies, the loss assessment coverage may cover the difference between the owner’s deductible on the HO6 policy and the association deductible.
 
Some associations include provisions in the covenants providing that if an owner entitled to insurance proceeds is delinquent in payment of assessments, the association may deduct the delinquency from the proceeds of insurance.
 
7. Occupancy Limits
 
The United States Supreme Court has ruled that the single-family occupancy requirements found in many association legal documents are not exempt from fair housing laws. However, the Court and the Department of Housing and Urban Development have indicated that limits on the number of occupants in units may be permissible if based on the size of the units. Although HUD has indicated that it would review such limits on a case by case basis, two people per bedroom is generally acceptable. Any such limitation should allow the association to make exceptions to comply with the Fair Housing Amendments Act.
 
8. Business Use

Older documents restrict use of property in the community to residential use. In an age where our work environment is being redefined, many communities are considering more liberal business use provisions to allow owners to operate businesses out of their homes that are not detectable by sight, smell and sound. Some communities adopting such restrictions prohibit employees, while others may allow one or two non-owner employees. Some communities restrict customers or clients on the property while others allow such activity not in excess of what would be reasonable and customary to a residential use. In many cases, businesses are prohibited that involve the following are included: (a) manufacturing or fabrication of any kind; (b) storage of hazardous materials; (c) increased traffic or parked vehicles beyond that reasonable and customary to a residential dwelling use; (d) permanent or long term parking of heavy equipment, including semi trailers; and (e) the use or rental of any structure on a Lot for any transient, hotel, motel, bed and breakfast, restaurant, bar or other commercial purposes. In no instance shall a home occupation be visible externally, nor shall any home occupation employ any person other than the Owner. Such a provision allows the association to enforce restrictions on business uses that may negatively impact the neighbors without facing a claim of selective enforcement.

9. Special Meetings

It is important to clarify procedures for calling and holding special meetings. Under most association bylaws, the members can petition for a special meeting to be called. Under the Colorado Revised Nonprofit Act, if the Board fails to call a special meeting within 30 days, the members may call the meeting. Who will run such a meeting? The Bylaws should provide that all meetings, no matter how they are called, will be chaired by the president of the Association or the president’s designee.
 
10. Removal of Directors 

 This can be an emotionally charged issue in a community. Association Bylaws should be drafted to ensure that appropriate due process procedures are in place for such an event. For post-CCIOA communities, any meeting to remove an officer or member of the executive board must be included in the meeting notice. However, this provision does not apply to pre-CCIOA communities. The CCIOA requirement should be included in all bylaws. It may be noted that under CCIOA, any member of the executive board may be removed by 2/3 of the members present and voting at a duly called meeting. This is another provision that does not apply to pre-CCIOA communities. To limit the ability of a minority to remove directors in pre-CCIOA communities, the vote may remove may be a majority of all members.