HOA Documents Can Be Confusing, but They’re Needed to Avoid Disputes and Misunderstandings
As a Board Member or Property Manager, it’s critical for you to know what’s included in the documents and to have a working understanding of their purposes. You don’t need to remember every detail of your governing documents, nor does it have to take a long time to find specific records. Using HOA property management software, you can easily access any document, making it simple to determine if someone is in or out of compliance. For example, you can easily find out if HOA rules allow Sue Jones to use a vehicle magnet to market her business.
Another important piece of information you’ll find in the governing documents is the maximum length an individual can hold a position as a Board member. But where would you find that information?
The 4 Common Types of HOA Documents
Homeowners associations use a variety of governing documents to guide their operations.
The bylaws, for example, indicate Board member term length.
These are the four common types of documents for HOAs:
1. Articles of Incorporation
3. Declarations of Covenants, Conditions, and Restrictions (CC&Rs)
4. Rules and Regulations
Articles of Incorporation
The Articles of Incorporation, which are also known as the “Articles,” and don’t require much attention.
These documents would have been filed with your secretary of state to create the association as a nonprofit organization.
The articles are brief and include things like the name, location, and purpose of the association. Though important documents, you won’t find yourself reviewing them often.
The bylaws describe how an association is required to function and the restrictions on the entity.
They outline the rights and responsibilities of the HOA, as well as details like:
- Maximum term lengths for Board members
- Detailed rules for elections and voting rights
- Specifics about meetings, like how to call one and how often one must be held
- Procedures on how to create the annual budget and determine assessments
Owners and potential buyers alike will want to familiarize themselves with these documents too.
Declarations of Covenants, Conditions, and Restrictions (CC&Rs)
The most important category of your association’s governing documents – and often the longest – is the CC&Rs.
These are comprised of the most comprehensive information, and everything outlined within them overrules any conflicting provisions in other governing documents.
Here you’ll find things like restrictions on the use of common areas and owner’s property, and an explanation of which areas are considered common. When it comes to making association amendments, those procedures are also contained within the CC&Rs along with any previously documented changes.
Your CC&Rs may also include a Community Plan or “subdivision map” that serves as a visualization of the divisions of lots. This map is usually created and filed with the county when the development is formed. You’ll also find the Community Plan connected to every deed within the association’s parcel.
Many states require the CC&Rs to be recorded in the local county property records. Real estate agents should provide them to interested buyers for a better understanding of the restrictions, rights, and obligations of property owners within the development.
Rules and Regulations
Yes, we mentioned the inclusion of rules in the CC&Rs above, but associations generally have a separate Rules and Regulations document too.
These are a bit more detailed and are often the cause of disputes among the HOA and homeowners.
The rules and regulations include ordinances related to:
- Waste disposal
- Signage/vehicle wraps
- Boats and recreational vehicles
Potential owners will be looking through this document to find out if they are okay with living by the HOA’s rules and regulations. You’ll want to know the rules and regulations well – who knows; maybe there’s an outdated rule that should be changed or removed altogether.
Adopting new rules and regulations is usually at the discretion of the association so long as they comply with federal and state laws, and don’t disagree with the CC&Rs.
HOA Property Management Software – Saves You Time
Using TOPS [ONE] software to manage your HOA property allows your team or Board members to access the information they need from any device.
If a Board member is out and about and is questioning a possible infraction, they can log in to the program and search the HOA docs for any relevant regulations.
Watch a demo to save you and your team time. Get started with a free consultation today!
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