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My local Condo Board of Directors is trying to amend our Condo Association's Bylaws citing Texas Business Organizations Code 22.102(c).

Sec. 22.102. BYLAWS. (a) The initial bylaws of a corporation shall be adopted by the corporation's board of directors or, if the management of the corporation is vested in the corporation's members, by the members. (b) The bylaws may contain provisions for the regulation and management of the affairs of the corporation that are consistent with law and the certificate of formation. (c) The board of directors may amend or repeal the bylaws, or adopt new bylaws, unless: (1) this chapter or the corporation's certificate of formation wholly or partly reserves the power exclusively to the corporation's members; (2) the management of the corporation is vested in the corporation's members; or (3) in amending, repealing, or adopting a bylaw, the members expressly provide that the board of directors may not amend or repeal the bylaw.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

So what does "wholly or partly reserves the power exclusively" mean?

  • The Declarations state,

    Voting. Unit ownership shall entitle the Owner(s) to case one (1) vote per Unit in the affairs of the Association, which vote will be weighted to equal the proportionate share of ownership of the Unit owner in the Common Elements. Voting shall not be split among more than one (1) Unit Owner. The present number of votes that can be case by the Unit Owners is thirty-seven (37). Should additional property be annexed in accordance with Paragraph 2.11 hereof, the total number of votes shall be increased accordingly, and the weighted average adjusted to total one hundred percent (100%). (Declarations. Article IV § 5(b))

    The consent of the Owners of Units to which at least sixty-seven percent (67%) of the votes in the Association are allocated and the approval of First Hortgagees holding mortgages on Units which have at least fifty-one percent (51%) of the votes of Units subject to mortgages' **shall be required to add or amend any material provisions to this Declaration or to the By-Laws** including those provisions which provide for, govern or regulate any of the following: [...] (Declarations. Article IV § 8.1(a))

  • The By-laws state,

    10.1(a). These By-Laws may be amended by the Association at any time at a duly constituted meeting for such purpose, and no amendment shall take effect unless approved by Owners representing at least sixty-six and two-thirds percent of the aggregate interest of the undivided Ownership of the Common Elements except for the amendments provided for in Article VIII of the Declaration which shall require the approval of Owners and Mortgagees as provided therein. In no event shall the By-Laws be amended to conflict with the Declaration. In the event of a conflict between the two (2) documents, the Declaration shall control.

  • Articles of Incorporation

    "[The Corporation's] specific and primary purpose is to provide for the preservation and maintainence of a Condominium Project, as provided in the Condominium Declaration of KINGS CROSSING TOWNHOMES CONDOMINIUM (hereinafter referrer ed to as the "Declaration") ..." (Article IV § 1)

    To exercise all of the powers and privileges and to perform all of the duties and obligations of the Corporation arising from the Declaration applicable to the Property, as amended from time to time, and recorded or to be recorded in the Condominium Records in the Office of the County Clerk of Harris County, Texas, the Declaration being incorporated herein by reference for all purposes. (Article IV § 2(b))

The Articles of Incorporation make numerous references to both the Bylaws and the Declarations.

Links

Update

Previously, I asked

To what degree is "the management of the corporation is vested in the corporation's members" applicable? What constitutes "management" in that context. Clearly, as owners, we're tasked with a lot not least of which is to elect the board. Is the management of the corporation vested in us?

But reading 22.102(c), I found

(b) A corporation is considered to have vested the management of the corporation's affairs in the board of directors of the corporation in the absence of a provision to the contrary in the certificate of formation, unless the corporation is a church organized and operating under a congregational system that:

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    Are the bylaws considered to be part of the certificate of formation? – phoog Jun 22 '17 at 3:48
  • @phoog not sure, I've requested the Certificate of Information from the state. It's currently listed as a legacy filing so it's not available through online search. I've got above the Declarations and By-Laws. I do assume the Declarations which I quoted above (though I wrongly attributed it to the Bylaws) are part of the original filing. I could be incorrect in that assumption. Time will tell. – Evan Carroll Jun 22 '17 at 4:28
  • @phoog updated with the link to the articles. – Evan Carroll Jun 23 '17 at 1:45
  • Hey, with respect to when they say “members,” they mean shareholders. So the board of directors may amend the bylaws unless the corporations certificate of formation wholly or partly reserves the power exclusively to the corporations shareholders. – A.fm. Jul 25 '17 at 23:37
  • @A.fm. I understand, the question is whether or not the corporations certificate of formation above does. It references the declarations which explicitly does. And, I'm not sure if it has to reference the declarations either. – Evan Carroll Jul 25 '17 at 23:52
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The Board of Directors may not amend the bylaws, because the Articles of Incorporation incorporates the Declarations by reference, and the Declarations provide that the Unit Owners (i.e. the members) are the ones who get to vote on changes to the bylaws.

The voting rules are almost identical except that the Bylaws requires a two-thirds majority, while the Declarations require a 67% majority which would control, in principle (but a judge would probably defer to the Board regarding how it handled rounding issues).

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