August 7, 2020
 
Fellow Homeowners,
 
Last night, the Board of Directors met in a special meeting and approved extending the voting for acceptance of new CCR’s and Bylaws to November 16, 2020 at 5:00 PM local time.
 
Just under 29% of the members have yet to vote.  As president, I will continue to ask the BOD to extend the vote until we have a clear consensus on approval or rejection of these documents.  At the beginning of this process, I was told by those knowledgeable of it that it may take a year.  I am optimistic that we can have an outcome before the end of 2020.  
 
Based on recent comments that suggest confusion about what is in our CCR’s and Bylaws, Tom Smith and I have attached information about that topic.  If you have any questions do not hesitate to contact either of us.
 
For those 117 members who have not voted, please vote.
 
Best Regards, 

John Yerke
President BOD
 
cc:
Kurtis Peterson – Inspectors of Election
Kyle Grant – SPA Legal Counsel

Confusion over what is in our CC&R’s

Several members voiced concern that the Governing Documents (CC&R Declarations and By Laws) changes add more property restrictions. This is not accurate. The mandate from 62% of the 362 surveyed members in 2019 indicated a desire to continue with the property restrictions already in place in the Bylaws and Articles of Incorporation. The Board rejected proposals to create new use restrictions, and therefore we directed the Association’s attorney to draft documents that added no new rules consistent to the feedback from the members.  
 
Understanding the changes by direct comparison is complicated.  Surf Pines was incorporated as a non-profit corporation in 1969 under different State statutes than today.  The State now mandates compliance with the statutes passed in 1982 and which has undergone major reforms since then.  However, since we were formed prior to 1982, we have flexibility in the exact statutes we follow. 
 
Standard documents for a homeowner’s association include:

1. Articles of Incorporation that contain the physical attributes of the association.
2. Declaration of Covenants, Conditions and Restrictions that govern the property rights of the association members.
3. Bylaws that define the governing structure for the Association. 

The issue for Surf Pines Association is two-fold.  

1. CCR’s that existed before the incorporation in 1969 had a sunset date and expired in 1974. 
2. Since there were no CCR’s after 1974, changes that impacted property rights were incorrectly placed in either the bylaws or articles of incorporation.  Neither of those documents are typically used to outline property rights in Oregon planned communities.

A key piece of developing the new CCR’s is to move all property right provisions and restrictions from the bylaws and into the CCR’s.  No new rules were added to any document.  The only addition was definitions and some changes in phrasing to be consistent with the State statues. CC&R’s are extremely important to any HOA homeowner.  They specify and protect each member’s property rights.  To complement this, two significant changes were added to the CCR’s and Bylaws: 

1. By adopting these CCR’s, any future amendments require approval by 75% of all members.  This adds significant protection to member property rights.  Comments by some that the Board has unlimited power to negatively impact members’ property rights are unfounded.  
2. The new bylaws specify a quorum of 20% of all members eligible vote including attendees and proxies.  This level was picked because it is the lowest allowed by the State statutes and typically our participation level.  Our old Governing Documents did not have any quorum requirement, which would allow the Association to be directed by a small minority of owners. This new quorum requirement creates further protection for owners. This quorum requirement applies to voting by members at the annual meeting for board members, annual budget, etc.  

A few members want all rules other than those that apply to common property eliminated from our governing documents. They allege that any property restrictions are unnecessary and infringe on property rights.  While we believe most of us do not want Surf Pines to operate like some of the more heavily restrictive communities, with which we are familiar, some rules are important to maintain property values and maintain our community appearance. 

On October 17, 2009, 15 amendments to the bylaws were proposed at a Special member meeting.  All passed in the presence of 115 valid proxies and ballots.  Seven of the amendments dealt with procedural items.  The other eight dealt with property rights items.  Those amendments were:

1. Burning that threatens property and/or health.

1. Dead or uprooted trees not removed 30 days after a Board order for removal.

1. No part of any residence or other construction, nor any other object intruding on views to the west of the ocean-front setback line defined herein, may be placed to the west of that line. Trees, bushes and other vegetation west of that line before October 17, 2009 may be maintained, but no vegetation that may obstruct views may be planted west of the line after that date.

1. All residential structures shall be constructed on-site (pre-cut, on-site assembled homes are permitted). All trailers, mobile homes, and modularly built homes preconstructed off-site for movement over highways are prohibited.

1. No structure or object other than a permanent residence affixed to a foundation, including a trailer, camper, basement, shed, garage, or barn, may be used as a temporary residence for more than 14 days within a one-year period without prior Board approval or as a permanent residence.

1. Owners must repair seriously deteriorated building structures, exterior walls, roofs, fences, driveways, sidewalks, walkways, and parking areas.  

1. Storage of items (other than stacked firewood) including but not limited to tires, lumber, household appliances, furniture, fixtures, or inoperable vehicles is permitted only within the confines of a house, garage, or storage port.

1. Except as provided herein, the following must be screened from view from the street by being kept either within the confines of an enclosed garage or storage port, or behind shrubbery or a screening fence: Boats, trailers, campers, truck campers, light recreational vehicles, light recreational equipment, trucks (other than pickups), more than four autos or pickups, or vehicle repairs other than emergency repairs. Exception: The foregoing objects may be parked in view from the street on a temporary basis (not more than 120 hours).

 
Under the rules at that time, this was a valid vote and it would be today under our existing bylaws.  However, because CCR’s did not exist, the changes were made to the Bylaws and Articles of Incorporation.  If this vote were held today and we had approved CCR’s, 75% of membership approval would be required.  
 
Other property rights amendments have routinely been added to our bylaws over time.  However, we feel it is important to create a set of governing documents that is structured consistently with State law and with the customs in the HOA industry.  
As of today, 117 members have not voted. Hopefully, this explanation will help persuade you to vote. Not voting will cause more time and money to be spent on the voting process, as the Board is committed to a full voter turnout.

Many people who are criticizing the proposed CCR’s and Bylaws purchased in Surf Pines under the existing documents.  The new documents capture the intent of those documents but structure them in a way that is more reflective of a traditional HOA. While we are committed to having a minimal set of rules in place to preserve property values, as explained there are certain rules that are necessary to maintain value. For those rules that we do have in place and which the owners have voted on, it is important that we have a governing document structure that preserves the integrity of the community and communicates to owners that the HOA can be relied upon to carry out its duties. 

We encourage all owners to vote. If you have any questions, please feel free to contact John Yerke or Tom Smith. 

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Detailed White Paper with linked references.