Q: Can 5-206 of the MD corp & Assn Code be used to modify the by-laws of an organization (HOA in this case) without quorum?
Our HOA is trying to introduce an amendment to modify the by-laws. They have notified (via mail) that if they fail to achieve quorum at the first meeting, tonight, that a second meeting will be called using 5-206. Presumably that meeting will be in mid-December. We are owners and previous residents in this neighborhood (we have since converted it to a rental) and the amendment seems particularly heavy handed including limits on number of units that can be rented and power of attorney clauses. It has no provisions for grandfathering either, so we believe that we could be forced to sell our house if they so chose. I am not sure that there are limits on the power of attorney either.
A: Your situation sounds like a growing number of those kinds of cases we are seeing. Condo boards are taking steps to cut or eliminate remote ownership. Unfortunately, I see no alternative but to retain counsel to review the entire bylaws and the process as measured against the Code and to look for flaws in the process or advise the clients how to navigate HOA politics. Restrictions on ownership such as owner-occupancy clauses may even retroactively deprive past landlord-owners of valuable property rights, and a government isn't generally permitted to do that. It may reduce resale values significantly. This is particularly true in neighborhoods that are changing in value. If you don't want to investigate this as a cost of ownership, you may be wise to sell before the change in rules, but you may be required to disclose the prospective change in the condo rules.
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