When it comes to operating an HOA, there are four main governing documents you need to be familiar with. If you plan to buy a home or condo within a planned community or if you’re considering becoming an HOA board member, knowing the important role of each of these documents and how they work is important.
To help you get a better understanding of each one, let’s break them down and identify what you need to know.
Articles of Incorporation:
Prior to any property within a planned community is sold, the developer creates an association called a Condominium Association or Homeowners Association, depending on whether or not it’s a condominium community or single family homes. As each person purchases property within the community, they automatically become a member of the Association. The Association is created when legal documents are filed called “Articles of Incorporation” through the nonprofit sector with the secretary of state where the development is located. These articles are brief and contain only basic information about the Association like the name, location and purpose. There is no need for a buyer to review the Articles, only to be aware that they exist.
Once the Association has been formed, a set of bylaws are adopted. These bylaws are important because it describes in detail how the HOA is to be run, defines voting rights and necessary procedures and also contains rules for things like calling meetings and how often those meetings should be held.
Bylaws are also necessary because they explain the Association’s rights and responsibilities; how the Association should enforce rules, how to collect assessments, procedures for creating an annual budget and determining any assessments and their amounts.
A ‘board’ is a group of directors elected by the membership of the Association during election periods. The bylaws clearly define the length of term in which board members may serve and what the procedures are for elections. Knowing the term limits of a board member is especially important if there is someone you are hoping leaves soon and you or someone else can resume their seat.
Because of the power contained within the bylaws, it’s helpful to understand how they work and what the restrictions of the Association may be.
CC&R’s (Declaration of Covenants, Conditions and Restrictions):
If there was a ‘big Kahuna’ of HOA governing documents, this would be it! The CC&R’s are the most lengthy and contain the most detail in regards to the development operation. It’s also the end of the line when it comes to provisions, so if any other document conflicts with the CC&R’s, the CC&R’s win and other conflicting data is considered invalid.
This document outlines the general structure of the development and describes in detail what the land is subject to, as well as all other parts of the community owned by the Association, including common areas.
Because the CC&R’s also outline the restrictions of each owner, the Association’ authority to enforce rules and regulations, and responsibilities of each Association member, being familiar with it is crucial to your success as an HOA board member or homeowner. Learn about general restrictions, use of the property, and procedures for amendments within the CC&R’s.
Rules and Regulations:
There may be rules and regulations within the CC&R’s, but the separate document of rules and regulations may provide additional details in order to enforce anything that may be in violation. However, it’s important that if anything contained within the rules and regulations contradicts that of which is contained in the CC&R’s, the details in the CC&R’s take precedence.
The rules and regulations describe things like parking broken cars on the street and overgrown grass, also regulating the height of fences homeowners may wish to install and the number of swimming pools that may be limited within a community. This particular document is often the most controversial because not all homeowners may agree on what the policies say and can cause potential disputes among residents and board members. Property owners should be familiar with the rules and regulations and stay up to date on any changes that may occur.