Many times directors reference their governing documents when making decisions involving the HOA and the community. But what does this all mean? What kind of rules do they have to follow? If you are a new member of an HOA there are a lot of different terms to understand. If you’re looking at understanding what they are talking about, then here’s what you need to know.
What Rules Does the Board of Directors Follow?
The board of directors follows strict rules and guidelines in making every decision and in every meeting. Discussing important topics that can affect the livelihood of its members. What does it mean when community taxes are going up? Why do they reference this article in relation to this topic? Here, you’ll be able to understand the differences between articles, such as the CC&Rs, the architectural review, and the association bylaws. The rules depend on the type of community and what state you’re in, you’ll be able to get the gist.
The Articles and Bylaws of an HOA Community
In this article, we will outline the basics of each kind of law that the board of directors references. The laws help board members make important decisions that impact their community. Each will come with a basic summary to help you understand what they mean and how they affect you. According to websites such as the Homeowner’s Protection Bureau, Keystone Pacific, and Spectrum, here are the articles you need to know to understand what happens in your community:
Articles of Incorporation
HOA communities are founded in a manner that is similar to a business. The board of directors helps run the HOA like a business. This means that, like any small business, they must have articles of incorporation filed to the secretary of state in order to state the name, location, and purpose of the community. Not much is stated here which affects the community; it is basically just a statement article that lets everyone know the community exists, it’s non-profit, and it exists in this location.
The bylaws establish the rights and responsibilities of the board of directors as well as its community members. Duties, for instance, are the set of guidelines that the board of directors follows in their community to make sure that they are handling their responsibilities fairly and safely. It declares the rights of the association to protect its community and to collect assessments. These bylaws also dictate the number of members allowed on the board, how often elections take place, numbers necessary to provide a quorum, and more. Most of the time, it ensures protection to its community.
Covenants, Conditions, and Restrictions
CC&Rs dictate the restrictions that the community has, such as the color of your house, how often the yard needs to be mowed, and where parking is placed. This is usually published with the county recorder, and the board of directors has the fiduciary duty to enforce those rules. Breaking the rules will usually result in letters of warning, then a fine, and afterward could potentially lead to lawsuits and exercising a lien on the property. The CC&Rs also lists in detail the association’s covenant for assessments. It gives the association its rights to charge its members, how it executes the architectural control committee and ensures maintenance. When new members purchase a home, reading the CC&Rs and understanding the rules is an important part of making a decision about becoming part of the community.
The Architectural Review Changes committee is a more detailed and specific set of rules that branches off from the CC&Rs. It ensures that any changes to the exterior of the homes conform to the standards set by the governing documents. This is the committee that cares about appearance and notes any changes that the members make to the community homes. So, if you want to paint the house that pretty light blue color you love, you’ll have to request permission from the ARC in order to do so.
The financial documentation is what lets the members of the board assign dues to homeowners to help cover expenses of the association. These dues are generally uniform but can increase over time depending on need. These documents also help make assessments in cases of emergencies. It’s important to pay attention to what these finances look like and be prepared for extra assessments made in your community.
Other Rules and Regulations
Many times, the rules and regulations of the Bylaws and the CC&Rs are under dispute by the board of directors, especially when meetings occur and annual budgets are being discussed. If they don’t violate federal or state law and don’t conflict with the CC&Rs, new rules can be created and put in place. However, generally, there are three specific rules that can cause problems for the board:
- Rules that restrict age limit for the community pool – The board of directors should not ban children from your community pool. If you find a law that states that the swimming pool is banned from children under the age of ten, this violates the Fair Housing Law, and thus, a lawsuit could occur.
- Banning Satellite Dishes – Members are allowed to install and use a satellite dish. While the board of directors can state restrictions on those satellites, such as diameter length under the use of ARC, disallowing the use of satellites can lead to a lawsuit.
- Banning Solar Panels – This one is usually referenced as part of state law. An association cannot ban the installation and use of solar energy panels. If the association is aiming to make the installation of solar panels more expensive, then it’s against state law and can be filed.
With this outline of rules, what can you take from it? Do the restrictions seem a little too powerful? Maybe, but it is also necessary, especially when you’re part of an association that’s running a large community. The main goal of the board of directors is to keep its regulations equal and fair. The board also has to keep everyone involved and help prepare for outward expenses and community safety. However, it’s not always the case that the board of members makes a decision with the best thoughts in mind.
If you are concerned about what the HOA board members are doing. Then one of the best ways to prepare is by looking at your governing documents. Read the documents carefully. You should be able to determine what rights you explicitly have. If there are gray areas in the rules, then that implies that the association might have the right to enforce rules that aren’t stated. In this case, it’s best to take caution. As for the rules themselves, those rules can be contradicted with state and federal laws, so if you do find a problem, bring it up to the next open meeting and request the topic to your board members.