Some associations have bylaws that allow the board of directors to unilaterally amend the bylaws without obtaining owner approval. Although this may appear to be a “handy” provision, boards may get into trouble by using it in certain situations. If your community’s bylaws contain such a provision, don’t undertake any amendments until you read the rest of this article.
Pursuant to the Colorado Revised Nonprofit Corporation Act, a board of directors may not unilaterally amend the bylaws if such amendment changes the quorum requirement. Instead, owner approval must be obtained.
The Nonprofit Act further provides that the board of directors may not unilaterally amend the bylaws if such amendment would result in “a change of rights, privileges, restrictions, or conditions of a membership class as to voting, dissolution, redemption, or transfer by changing the rights, privileges, preferences, restrictions or conditions of another class”. This requirement is admittedly confusing. Therefore, if there is any doubt as to whether the board is changing such rights, the association’s legal counsel should be consulted.
If the proposed amendment to the bylaws falls under one or more of the above situations, owner approval should be sought. If the bylaws already contain an owner approval requirement for amendments, this requirement should be used. If, on the other hand, the bylaws do not contain an owner approval requirement, the Nonprofit Act allows the bylaws to be amended by approval from owners representing at least a majority of the current quorum.
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