HOA board members recognize and understand the importance of the association’s governing documents. The governing documents do just what the name implies – they govern the association and set the rules and regulations for how the community is run. Mostly, these rules and regulations are put in place for community safety, efficiency, and structure.
No matter the type of association – whether it be a homeowners’ association (HOA), a property owners’ association (POA), a condominium association, a housing cooperative (“co-op”), a master association, or other – there are various documents used by an association to govern it.
In this article, we’ll guide you through the purpose and power of each document and help you get a better understanding of how you, as a board member, can utilize these governing documents for the ease and effectiveness of running your association.
Let’s start with the document hierarchy:
If you find yourself questioning which document takes precedence, or how to resolve a conflict between two of the HOA’s documents, it’s best to refer to the document hierarchy.
The governing document hierarchy is imposed by the state and orders your association’s governing documents by authority. To understand how your state handles this hierarchy, it’s important to check state laws.
In general, the hierarchy is as follows:
- Legislative law (federal, state, and local – in that order)
- Plat map
- Declaration of Covenants, Conditions, and Restrictions (DCC&Rs or CC&Rs)
- Articles of Incorporation (AOI)
- Rules and Regulations
There are two types of precedence when referring to the governing documents of an association:
Temporal Precedence – just as it sounds, this type of precedence abides by which document was drafted and recorded first. By understanding this, you will quickly see which document has the most authority. (For example, as a matter of necessity, the plat map was drafted and recorded before the declaration was made, the declaration was made prior to the articles of incorporation, etc.)
Degree of Generality – this refers to how the governing documents at the top of the hierarchy tend to have more general/foundational/strategic statements and rules, as compared to those found at the bottom of the hierarchy.
Tip: Documents at the bottom of the hierarchy tend to include more specific and procedural statements and provisions.
The Purpose of Governing Documents
As we touched on earlier, governing documents specify the HOA’s authority and obligations while defining the rights and responsibilities of all members. Basically, it’s a rule book for how the association must operate – great information for board members and homeowners alike!
Governing Documents Explained
Now that we’ve covered the purpose and hierarchy of the governing documents, let’s take a look at each actual document and what it covers:
Recorded maps, or plats, mark the boundaries of a planned development. These visual illustrations are sometimes referred to as a “subdivision map”, and they are typically filed when a development is first formed. Eventually, they are connected to every deed and mortgage on the parcel of land!
These maps are used to establish the responsibility of maintenance and the location of the property. They are prepared by licensed professionals and reviewed by government agencies prior to being filed with county authorities.
Declaration of Covenants, Conditions, and Restrictions
The DCCRs (sometimes referred to as CC&Rs) describe the rights and obligations of the association and each member of the association. These legally binding documents are officially filed with the state and they’re often lengthy and comprehensive since they contain the most important information about the HOA development and the operation of the association.
The declarations set up the general structure of the HOA and define the association’s powers of enforcement, procedures for dispute resolution, use of amenities, regulations on pet governance, collection of assessments, owner usage restrictions, and much more.
In the DCCRs, you will find things like:
- Guidelines for rule enforcement
- insurance obligations
- Assessment obligations
- Maintenance obligations for the association and individual members
- Mechanisms for dispute resolution
- Lender protection provisions
- Restrictions on the use of property
- Amendment procedures
Most DCCRs contain procedures for amendments. In older developments, there may be a number of amendments revising the original terms of the documents. Because a record of the DCCRs is kept on file with the state, it is often a difficult and lengthy process to amend the documents; a vote by the membership is also required to make changes to these documents.
Tip: The Architectural Standards section of the DCCRs outlines the steps that a homeowner should take for submission and approval of any potential change to the exterior of their home or property. Typically, the architectural standards stipulate the general guidelines for property changes. If this section is not located in your association’s DCCRs, check for it in the Rules and Regulations.
While the declarations may vary greatly between associations, they typically outline the rules and responsibilities that must be adhered to within the HOA. When another governing document conflicts with the provision of the DCCRs, the DCCRs win since they take precedence over other documents of the association.
The majority of states require that the DCCRs be recorded in real property records of the county where the association is located.
Articles of Incorporation
The association is created by filing the Articles of Incorporation with the secretary of state where the development is located. Often referred to simply as “the articles”, these documents set the name of the association and provide basic information such as the association’s purpose and its location.
The articles of incorporation establish the association as a non-profit and identify its initial agent.
Tip: The initial agent is the individual who is authorized to receive legal notices on behalf of the association.
These articles not only create the association as a legal entity, they can be made more extensive through the inclusion of information on topics such as voting, amendments, and directors.
Once an association has been established, it will adopt a set of bylaws. The association’s bylaws describe the procedures of how the HOA will run. Essentially, the bylaws establish the structure of the day-to-day operations of the association.
The bylaws of an association often include:
- the number of board members that will serve at one time
- the responsibilities and duties of elected board members
- how officer and director positions are filled
- the length of board member terms
- election procedures
- guidelines and procedures for voting
- how to determine assessment amounts
- guidelines for meetings, including quorum and frequency
- how record-keeping and reporting will be conducted
- procedures for determining and creating the association’s annual budget
Tip: Think of the DCCRs as covering the “what” of the association, while the bylaws cover the “how!”
Typically created by a legal professional and reviewed by government when the development is created, these documents are not actually filed with a governmental agency. However, bylaws, like the DCCRs, are often difficult to amend because they also require a vote by the membership.
Rules and Regulations
In addition to federal, state, and local governmental restrictions, HOAs often have additional regulations and/or procedures for passing internal rules, as outlined in the DCCRs.
The association’s rules and regulations are often very specific, covering everything from signage, parking, restrictions on pets, use of amenities, etc. They are internal, which means the DCCRs take precedence over them in terms of legal importance.
The rules and regulations cover a variety of topics that are often controversial, which sometimes leads to dispute or confusion within the association. For example, if the rules and regulations limit the hours of operation for the pool and clubhouse during summer months, this may lead to a disagreement about the feasibility of this rule, as some members may argue that longer hours of operation are necessary, while others argue that it poses risk and/or increased expense.
Tip: The rules and regulations of an association tend to be lengthy and they affect how the property is used.
The association’s rules and regulations can be changed by board vote and with review by the membership. Typically, this happens by the board adopting a rule and sending notice to community members, who then have 30 days to review and voice their questions, comments, and concerns. Once feedback has been provided, the board will then consider it before making a final decision regarding the amendment or change to the rule or regulation in question.
Amending the Governing Documents
As a community evolves, and as state laws are revised, it may become necessary to amend the governing documents of the association to avoid confusion or discrepancy between the law and community rules. In some instances, amendment may be necessary to avoid enforcing unreasonable or unlawful restrictions in your association!
Important association documents, such as the DCCRs, bylaws, and rule and regulations, can be changed, or amended. True, it’s not an easy process and is often expensive, time-consuming, and a bit frustrating for some, but the needs of a community change over time and cannot be fully anticipated when a developer establishes the community.
By following the expert advice of the association’s legal counsel, coupled with careful and intentional planning, the board can successfully enact changes that benefit the association.
When documents are in need of modification to best suit/serve the needs of the community, it’s simply a matter of understanding and following the process required to make the desired changes.
Below are five helpful tips for the process of amending your association’s governing documents:
- Once it’s been determined that the governing documents should be amended, review the requirements for revising them. This can be tricky because rules to amend vary based on state laws, your association’s classification, and the particular document you need to amend. It’s important to have your HOA’s legal counsel advise you through this process!
- Draft proposed changes with the HOA attorney and review them. The board may want to form a committee for this process.
- Explain proposed changes to homeowners and communicate why these changes are needed in advance. Remember, you need their votes to make the amendment!
- Acquire votes from the membership. Give homeowners as much time as possible to vote and remind them of their ballots’ due date throughout the voting period.
- Finalize and file the amended documents. Your HOA attorney can aid in this process. Don’t forget to inform homeowners of the results!
Enforcing the Governing Documents
It’s in everyone’s best interest to follow the rules and adhere to the regulations of the community, but there may be times when warnings, violation notices, and fines don’t do the trick.
As a board member, you have the authority to enforce the rules set forth by the association’s governing documents. While the rules and regulations of an HOA are legally binding for its members, they may not be enforceable by local law enforcement. There may be exceptions pertaining to parking violations for public streets, noise restrictions, and other city or county ordinances. This will vary depending on the location of the association.
There are options when it comes to enforcing HOA rules and violating those rules can lead to legal and/or financial consequences for homeowners. In more drastic cases, a lien could be placed against the violating homeowner.
What About Unenforceable Rules?
When changes to federal, state, or local laws are made in regard to homeowners’ associations, it’s important that those changes are reflected in the community’s rules and regulations. If your association’s governing documents contradict any changes of the law, you could be in violation of the law! This is another reason why it’s imperative that the governing documents are fully understood and reviewed regularly. As a board member, it’s your responsibility to do so!
In general, there are three rules within an association’s governing documents (specifically, the rules and regulations) that may violate the law. They are:
- Satellite dishes: By federal law, you cannot ban a resident form installing or using a satellite dish, but you can enforce a rule stating that the satellite cannot exceed one meter in diameter.
- Solar energy panels: It is against state law for an association to make the installation of solar panels too difficult or expensive for members, no matter how unsightly they may seem to some.
- Access to community pool: Under the Fair Housing Law, children cannot be banned from the community pool entirely. The association cannot prohibit children under a certain age access to the community pool, but you can set rules for the pool which may help protect the association from liability should a lawsuit occur.
Many people think of rules, rules, and more rules when they think of an HOA. That’s because, on the surface, having so many rules, regulations, and documents to follow may seem quite restrictive and unappealing. However, what we see long-term when looking below the surface is:
- Preserved aesthetics, which equals protected home and property values
- Safer communities
- Increased satisfaction and higher quality of life
- Valuable amenities and increased opportunities for building social connections
- Maintained property for association and owners alike
Helping Homeowners Understand Their Governing Documents
It’s understandable that the governing documents may seem a bit boring, or even daunting, for those who are not legal experts. However, it is definitely worth the time for a homeowner or potential buyer in an HOA to review and understand these important documents.
Homeowners’ associations continue to grow in popularity in the United States, and as more homebuyers enter the market, it’s important for them to understand how an HOA operates and why governing documents are used to guide the operation of an association. Ignorance is not bliss when it comes to owning a home in an HOA! By becoming familiar with the governing documents of an association, members can avoid violations, fees, and frustrations while maximizing their enjoyment of the community.
As a board member, you can assist by becoming very familiar with these documents yourself and working cooperatively with your membership to educate them on the basics. Some may even request to review the association’s financial records, review meeting minutes, or ask for a statement of past or current homeowner assessments, and that’s good! Homeowners who invest the time to read and understand their HOA’s documents are more likely to abide by them and take an active role in homeownership, which leads to increased enjoyment of living in the community.
Remember these summations when explaining the governing documents to homeowners:
- Plat Maps mark the official boundaries of the development. Tied to deeds and mortgages, they are professionally prepared and filed with local authorities.
- DCCRs define the restrictions on the use of common areas and the owners’ property, as well as define the rights and responsibilities of members of the association. They are filed with the state and require the assistance of an experienced attorney to amend.
- Articles of Incorporation are filed with the secretary of state to establish the association as a legal, non-profit entity. The articles include basic information that identifies the association by name, location, and purpose.
- Bylaws describe the association’s rights and responsibilities and set rules for how the association will be run. They require a vote of the membership and can be difficult to amend.
- Rules and Regulations are in effect at the community level, and they detail specifics about the rules that members must follow in accordance with the DCCRs. Any amendment requires membership review and a board vote.
Board members are important and valued members of any association. By implementing the rules and regulations of the association and following the guidelines set forth in the association’s governing documents, you can ensure that your community operates like a well-oiled machine, and who doesn’t want that? Contact JellyBird HOA Management to learn more about how we can help streamline the management of your HOA community.