A document of many names, the Covenants, Conditions, and Restrictions – also commonly known as the CC&Rs, DCCRs, declaration, covenants, or deed restrictions – help lay the foundation for your community association. Regardless of what you call the CC&Rs, their significance is undeniable.
As the highest non-plat governing document, the CC&Rs are filed with the county, or counties, in which the association is located, and includes the restrictions for community aimed to retain property values and maintain community aesthetics. All association members are bound by the restrictions placed by the CC&Rs, as they create the rules of the land, tied to the property itself rather than the individual owner. Since the CC&Rs are the most comprehensive document in the dedicatory instruments covering community development and operations, it’s important to know how to draft them correctly.
Consult an expert.
First and foremost, seek counsel from an attorney, specifically one specializing in HOA law. They’ll know the state laws, requirements, and limitations as well as the proper filing process.
Additionally, an HOA attorney will be familiar with the nuances required in creating association documents. For example, parking rules are generally listed in the CC&Rs, but their extent depends on if the association streets are private or public. An attorney will be able to assist in making this distinction and determine how much authority the HOA has to enforce parking rules.
Furthermore, plan ahead so that the governing documents are recorded in time. The CC&Rs should be filed with the association’s county prior to development starting. An attorney will help in avoiding the pitfalls of procrastination.
Know what should be included.
The CC&Rs establish the rights and responsibilities of HOA members. Essentially, they explain what an owner can and cannot do on their property, giving the association the power to enforce any violations of the written rules. Also, the CC&Rs define the roles and responsibilities of the board. Ultimately, all owners must comply with this document.
Therefore, knowing what to include in the CC&Rs is vital when drafting them. The CC&Rs should discuss the overall structure of the development, identifying the property governed by the HOA and designating the common areas of the community.
Furthermore, when creating the CC&Rs, the following items should be covered:
- Maintenance – Distinguish the responsibilities of the association and owners
- Insurance – Identify the minimum coverage requirements
- Enforcement – Grant the association the authority to enforce the rules, including fines
- Property use restrictions – Determine the restrictions of what can and cannot be done to properties within the HOA
- Assessments – Set forth the assessment obligations of HOA members and establish the association’s collection and foreclosure rights
- Architectural guidelines – Provide the association with control over lot improvements
Be as reasonable as possible.
When drafting the CC&Rs, consider current and future needs along with current state law, as well as potential rules and policies future boards may make down the line. Additionally, it’s important to lay out the amending process, ensuring that amendments are not inhibited or that the process is too complicated.
Being reasonable when writing the CC&Rs also means not being too restrictive of board power. Allow for board-created rules and resolutions, and also establish the proper procedure to do so. Furthermore, be reasonable when considering rules regarding quorum, parking, external structures, pets, nuisances, landscaping, maintenance, trash cans, property improvements, and more.
Ultimately, consider how the language and rules in the CC&Rs will affect the overall management of the association, including the eventual transition from developer control to a homeowner board of directors. Also, make sure the enforcement procedures and appeal processes are fair in the CC&Rs.
Avoid vague language.
In addition to being reasonable, it’s just as important to be clear, precise, and coherent when drafting the CC&Rs. Vague and unclear language may cause problems and confusion in the future. Additionally, when identifying the procedure for amending the CC&Rs or making changes in the community, create processes that are clear-cut and easily understood.
For example, ensure that the language of the CC&Rs allows for clearly established assessment collections and enforcement. Specific language should be used for this section in order to determine property liens, enforcement procedures, etc.
Overall, don’t use too much legal jargon or elaborate verbiage; on the other hand, don’t be too ambiguous, either!