Management Corner: What You Should Know About Association Governing Documents
"You can't tell me what to do!" is a phrase community association managers (CAMs) often hear from homeowners regarding their property in a homeowners’ association (HOA). Contrary to popular belief, this phrase is accurate—CAMs don’t tell homeowners what to do; they’re merely the messengers. A CAM's role is to assist the board of directors in enforcing the provisions outlined in the association's governing documents. Read on to learn more about governing documents, their importance, and more.
Governing Documents: The Basics
Every HOA is governed by a distinct set of documents, sometimes referred to as Covenants, Conditions, & Restrictions (CC&Rs), that define the authority of the association. In short, these documents detail what homeowners can and cannot do. The governing documents are arranged in a hierarchy as follows:
1. Recorded Map, Plat, or Plan
Shows the precise location of units, lots, common areas, and limited common areas.
2. Declaration or CC&Rs
Outlines property restrictions that can include more than the city, state, or federal land ownership rights.
3. Articles of Incorporation
If incorporated, brings the corporation into existence and defines its basic purpose.
4. Bylaws
Establishes the governance structure, including the make-up of the board of directors, election guidelines, and the board’s authority.
5. Board Resolutions
Includes the rules and regulations or other actions passed by the board via resolution, as allowed by the documents above.
Where the document sits in the hierarchy defines its importance. All documents except the board resolutions cannot be changed solely by the board of directors. Any change requires a full vote by all homeowners with a certain percentage—usually 66% or more—approving the modification, as outlined in the document. If there are any discrepancies, the document higher up in the hierarchy always prevails. For example, Rules and Regulations cannot fundamentally change any restrictions contained in the Declaration.
Why Governing Documents Matter
All governing documents are binding on the home. When you purchase a home in an HOA, you've agreed to abide by the association's governing documents. Upon transfer of the property, a seller must provide a resale disclosure that includes all necessary information about the home and its status in the HOA, but many buyers don't read them. And it's easy to understand why—these legal documents, often hundreds of pages long, are drafted by attorneys and can be extremely confusing. Trying to review and comprehend them in their entirety before closing on a home can be an overwhelming task.
However, you should read your documents BEFORE doing anything that could violate them. If you fail to abide by your association’s rules, guidelines, and expectations, you may receive a violation from your HOA board. Typically, a violation will include details about the offense, how to correct it, and any other information about potential fees, fines, and a deadline to respond or fix the issue.
Many HOAs have very similar restrictions with minor differences. If you love your home and your community's amenities, there likely isn't anything that's going to alter your enjoyment of the property drastically. All restrictions and guidelines are in place to maintain harmony within the association, make the community inviting, and increase property values.
Tips for Reading Governing Documents
All homeowners should read their association’s governing documents and consult with a real estate professional or attorney to ensure every provision and its applicability is understood; however, many neglect to do so. These documents can be daunting, but homeowners should, at minimum, read the following to get a basic understanding of what’s expected in their association:
- The definition of unit boundaries, common elements, and limited common elements in the Declaration
- The restrictions section in the Declaration
- The maintenance and repair responsibilities in the Declaration
- The Bylaws, specifically quorum requirements and general duties or responsibilities of the board
- The Rules and Regulations
Non-Compliance Letters: What You Should Know
If you receive a notification from the association stating that your home isn’t in compliance with the governing documents, don’t blame the messenger. Instead, review the Rules and Regulations and the restrictions in the Declaration to determine if the issue was in compliance. If it wasn’t, correct the problem and notify management to resolve the situation amicably. If you believe the notice was sent in error, dispute resolution guidelines are likely outlined in the Rules and Regulations. If needed, your management team can review and discuss the interpretation of the rules and schedule a hearing with the board of directors. To learn more about non-compliance letters, check out our article, “Management Corner: What You Should Know About the Association Non-Compliance Letter.”