Life used to be fairly simple. In the old days, when a Long Island Homeowners Association (HOA) amended its Declaration or By-Laws, the common practice was for the Board to file a Certificate of Amendment with the County Clerk.
First of all, when an amendment is filed with that office, all owners and subsequent owners of homes in the community will legally be on notice that such amended rules exist and apply to them. Filing amendments with the County Clerk’s Office is also a good way to make sure those documents can be easily located by future generations of board members and homeowners. Finally, the Declaration of most HOAs requires that amendments be recorded in order to be effective.
Things became a bit more complicated several years ago…
Things became a bit more complicated several years ago when the County Clerk’s Offices in both Suffolk and Nassau substantially increased the filing fees for documents such as a Certificate of Amendment, often to the point where HOA Boards began looking for ways to avoid such filings. One such “wrinkle” was that, while the Declaration often made a recording of an amendment a requirement, the By-Laws of the HOA often contained no such language. While this option to not file a By-Law amendment was not optimal, it was a definite and significant money saver.
That option came to a sudden end by way of a recent decision by the Appellate Division of the Second Judicial Department, whose jurisdiction includes Nassau and Suffolk Counties.
In a March 20, 2019 decision in the matter of Keller v. Kay[i], the Court noted that the HOA By-Laws were annexed as an exhibit to the Declaration — a common configuration in HOA documents. Since the Declaration states that amendments must be recorded and since the By-Laws are “a part of” the Declaration, “amendments to the By-Laws must be recorded to be effective.”
HOA boards on Long Island need to examine their governing documents to determine if this same relationship between the Declaration and By-Laws – the latter as an exhibit to the former – exists.
If so, not only should the board make sure to record all future-Law (and Declaration) amendments with the County Clerk, but all such HOA communities that amended their By-Laws in the past and chose not to record those changes now need to reconsider if they want those amendments to be valid. In a cost-benefit analysis, while filing By-Law amendments is expensive, an unfiled document may have suddenly been rendered somewhat useless.
[i]170 A.D.3d 978
