As a homeowner, do you understand the true meaning of the terms used within your Association? Understanding the vocabulary used by your community association manager and board members is the first step to clarity.
The Difference Between Declaration, Articles of Incorporation, and Bylaws
Your community’s documents are essentially three parts:
There is a distinct hierarchy or priority of the documents in that, in most cases, the Declaration, also known as Covenants, Conditions, and Restrictions (or CC&Rs), is the priority document, the Articles, where required, are next, and the Bylaws last. Often, homeowners like to group all three of these documents and call them the Governing Documents. Each part provides a description, authority, direction, or information that is different from the others. When there’s a conflict among those documents, the hierarchy determines which to follow.
The Declaration, CC&Rs or Master Deed is the legal document that provides guidelines for the operation of the community. It defines ownership, the boundaries of the unit and/or common area, create relationships between owners, sets standards, and provides a framework for financial responsibility and support.
Not all Community Associations are incorporated with their states, but when they are, the Articles of Incorporation, or Charter, establish the association’s name, type, and legal status. It brings the association into existence, defines its main purpose, and assigns an initial board of directors.
Bylaws govern the corporation and provide guidelines for operations and governance, such as how often meetings are held, means of communication, the board size, etc. They also lay out the framework for membership requirements, voting, elections processes, general board duties, and more.
Rules and Regulations
After the Bylaws, rules and regulations are classified next in the hierarchy. Rules and regulations are exactly what they sound like, and they are meant to clarify and provide a process for handling specific items.. Examples of this would be the establishment of the process by which owners would submit a request for architectural modification or the rules for the use of the clubhouse.
In many cases, board members can change or add rules and regulations. Generally, the adoption of rules is done by a Board vote at a meeting. Boards should always date the new rules to ensure that the most recent versions are accessible and easy to reference!
An amendment is how the Declaration, Articles, and Bylaws are changed or added to. An amendment is generally one of the few things that homeowners vote on. The amendment process is provided in the document to be amended. It typically takes a super majority of 75% or 66.6% of the total membership voting affirmatively to pass the proposed amendment. An amendment may be required on multiple documents to be effective, such as both the Declaration and the Bylaws. Legal counsel should always draft the amendment(s) and provide guidance on the process, assisting in having it recorded with the local jurisdiction when necessary amendments become a legal part of the existing governing documents.
A resolution is a formal means of clarifying or creating a process or rule. For example, a board could “resolve to hold the open forum portion of their meeting after adjournment and provide 20 minutes for the owners to bring up issues of importance to them”.. Resolutions are generally voted on as a motion at a meeting and while the vote is noted in the minutes of that meeting, the resolution is kept separate so that future boards, owners, and managers have a record of the process or rule. A resolution would never take the place of an amendment since it can’t change anything in a higher-level document.
Understanding the foundation of your community association will help you better understand the decisions made within your community and how and when you can have input to make your community a wonderful place to live.
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