Friday, August 20, 2010

Governing Documents

We are frequently asked by Boards which laws or rules govern Associations. Many Board Members are unaware that there is a hierarchy of what laws and rules govern their community.

In this hierarchy, federal and state laws always take priority. However, every community association also has governing documents that are meant to enhance the federal and state laws and are more specific about how the community is to be run.

Below is a list of governing documents most community associations have. The documents have been listed in order of the one with the most authority to the one with the least authority.

The primary document is often called a “Declaration” for Condominium Associations or “CC&Rs” (Covenants, Conditions, and Restrictions) for Homeowners Associations. The Declaration is kind of like an operating agreement for a business; it lists the details of the property included in the development and contains restrictions on use of the individual units or homes. It specifies what authority the association has and how it can or must do certain things, like maintain the common areas. It also defines the rights and obligations of the individual owners and the Association, like paying their maintenance fees.

The next document in the hierarchy of Association governance is the Bylaws. The Bylaws are intended to cover the procedural aspects of how an association is run. For instance, this document will include information on electing a Board of Directors, association meetings, voting procedures, budgeting procedures and guidelines, and much more. The Bylaws should be your property manager’s number one reference tool.

The Rules and Regulations are the next set of governing documents. Every Community Association should have a set of Rules and Regulations. Although some associations do not, we recommend that if your association does not have rules and regulations that the board should consider adopting a set of rules and regulations for living in your community. Rules and Regulations are usually adopted by the Board of Directors and are meant as a management tool to further clarify the rights and obligations of owners and their guests.

The final governing documents, which not every community association has is the Boards Policies and Resolutions. These are voted on by the Board of Directors and are meant to keep consistency among different Boards and management companies through the years. There may also be Amendments to your association’s Declaration or CC&Rs, which can change the terms of the original document.

It’s important to remember that the Declaration is above everything else besides the federal, state, or city laws, so any provisions in your Bylaws, Rules and Regulations, or other documents that conflict with the declaration are probably invalid.

Understanding the contents of your association’s governing documents is an important step towards being an informed Board Member. All unit owners should have received a copy of all governing documents for the association at the time of purchase. If you have misplaced them, please contact our office and request a copy for your records.

If you have any questions or comments, please feel free to leave a comment or contact us.

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