This is to follow today's radio program on amending governing documents. In Oklahoma, we amend covenants pursuant to the terms contained within the covenants themselves. For example, a covenant might provide:
"Change in Covenants: These covenants are to run with the land and shall be binding on all parties and all persons claiming under them for a period of twenty (20) years from the date hereof after which time said covenants shall be automatically extended for a successive period of 20 years unless an instrument signed by sixty percent of the then owners of the property has been recorded, agreeing to change said covenants in whole or in part."
Under this language, the covenants can be amended within the 20 year restrictive periods with only a unanimous approving vote. See, In Re Wallace, 1994 OK CIV APP 73. Thus, even the most necessary covenant amendment would have to wait until the end of the next restrictive period term in order to have a chance at approval (assuming in most cases that unanimous approval would be impossible).
To provide some relief from the harsh result of such amendment clauses and the In Re Wallace case, the Oklahoma legislature passed a remedial statute at 11 O.S. 42-106.1. Essentially, the statute allows property owners under a set of covenants to amend the covenants with a 70% majority if the covenants have been on file for 10 years, and with a 60% majority if the covenants have been on file for 15 years.
So, one of the first questions to answer in regards to a covenant amendment project is "What percentage of owner approval must the proposed amendment obtain?" If within the first ten year term of the covenants, the project may have to wait until the end of the covenant restrictive period, or until the expiration of the ten year filing period in order to obtain a 70% voting percentage under 11 O.S. 42-106.1.
Tune into "Who do you Trust" on NEWSRADIO 1000 KTOK on October 16 and 23 where we will continue our discussion of governing document amendment projects.
On the October 23, 2005 show, I will have a special guest Kraettli Q. Epperson, Esq., a colleague and esteemed OCU law adjunct professor, to discuss the special issue of converting voluntary neighborhoods to mandatory associations under Oklahoma Statute 11 O.S. 42-106.1(D).
Matthew L. Winton
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