The Life and Death of an
Attempted Covenant Change

by Carol Rawle

This past year the SFTR Covenants Committee undertook the task of examining our covenants and determining which, if any, covenants should be changed.  It has been widely agreed that many of the covenants were written to protect the developer and no longer may be entirely applicable.  Other covenants have ambiguous wording and may not entirely address some of the present issues on the ranch.  However, this committee thought it would be unwise to attempt to take on too many covenant changes at one time, thus overwhelming the membership.  So it was decided that we would concentrate on the one single covenant that affects voting.

In the past it has been extremely difficult to make any changes to the covenants because of Article vii which states that we must have a 60 percent approval of ALL property owners.  So the committee decided that this was the covenant that we should attempt to change.  Since only about one third of our property owners bother to return their ballots each year for the annual election of new board members, and the only successful covenant changes in the past were a result of an intense telephone campaign to get folks to vote, we would change the covenant to read "approval of 60 percent of all property owners VOTING".  This way, we felt, the folks actually returning ballots would decide the outcome of future POA voting issues, rather than the POA continually being held hostage by the apathy of the majority.

It sure sounded simple.  Then we noticed an additional clause that required us to also get 66 2/3 percent approval of all first mortgage holders.  How come nobody ever noticed this? Well there it was.  There was no ignoring it.  We now had to find out who all the first mortgage holders were because we had to send them ballots in addition to sending ballots to all of the property owners.  This covenant change just got more complicated and it looked like it was going to be a huge undertaking to find all of this information.

Weeks later and many, many e-mails to property owners, the committee had half of the list of mortgage holders completed.  An interesting thing was emerging.  More than half of the property owners held their property free and clear.  This emphasized the need for this proposed change since it didn't seem fair that mortgage institutions, being in the minority, could decide the outcome of all future attempts to change our covenants.  A few trips to the local title company, and the list of mortgage holders was completed.

Another encouraging fact emerged.  While there were mortgage holders from all over the country, most of the mortgages were held by local institutions.  This would certainly simplify things.  We could gang up the mortgaged properties held by each lender and get each institution to approve the covenant change on a single document.  If all three of the local lenders approved the covenant change, this would give us the required percentage.

Satisfied that we had overcome this major hurdle, we began to consider ways to ensure that we would be able to get the property owner vote.  We already had on line voting available via the web site, but we needed an added incentive.  That was it! INCENTIVE voting! We'd have a raffle with the property owner's ballot automatically entered as a raffle ticket with the prize being one year's free association dues! AND we would have early voting at the annual picnic, thus giving us time before the October meeting to see where we needed to concentrate a phone campaign in order to persuade the non voters to send in their ballots.  All we needed to do now was firm up the wording of the proposed covenant change and run it by the POA attorney.

Everything was looking oh so promising until the attorney pointed out one more clause in Article vii.  In order for this particular covenant change to be considered legal, we were required to have each and every ballot signed AND NOTARIZED! If it was difficult to get more than a third of our property owners to even return a ballot, how many did we think we could expect to go to all the trouble of taking the thing to a notary public to witness their signature?

Is this horse dead yet?  If not, it's pretty darned close.

In conclusion, the committee decided that our existing covenants are pretty okay as they are.  Instead of trying to make changes to them {under some really impossible odds}, we would concentrate on enforcing the ones we have.

Any property owner who encounters a violation of the covenants that they cannot resolve by talking the matter over with their neighbor, they may report it by writing to the SFTR POA c/o Covenants Committee, P.O. Box 870 Trinidad, CO  81082.  The committee will do all it can to try to get compliance.

One positive note to this infamous Article VII... we're only stuck with these provisions until the Declaration turns twenty years of age.  Then all bets are off!