If you are a homeowner in a planned community, it is important to be aware of the homeowners association (HOA) documents that govern your property. HOAs play a crucial role in maintaining and improving neighborhoods, and they can help protect your investment by ensuring that all homeowners are following the rules.
In this blog post, we will discuss the different types of HOA documents and what you should expect to find in each one.
1. HOA Governing Documents
All homeowners organizations have governing documents that include:
The Federal and State Laws
This section regulates what the association can or cannot do, thus protecting the interests of homeowners. For example, the Fair Housing Act prohibits discrimination based on race, color, religion, national origin, sex, familial status, or disability. This law applies to all HOAs, regardless of their size or location.
States can also have their own rules and requirements for HOAs. California, for instance, requires that HOAs provide certain disclosures to prospective buyers, such as a copy of the CC&Rs. These laws help ensure that HOAs are run fairly and transparently.
CC&Rs (Declaration of Covenants, Conditions & Restrictions)
The covenants, conditions, and restrictions (CC&Rs) are the rules that govern the association. They are enforceable by the association and run with the land, meaning that they bind all current and future owners of the property.
The CC&Rs typically cover topics such as lot sizes and setbacks, building materials, landscaping, and parking. They may also include rules about pets, noise, and other nuisances.
Enforcement of the CC&Rs is typically handled by the HOA board of directors or a violations committee. Homeowners who violate the CC&Rs may be subject to fines or other penalties, such as having to remove unauthorized improvements to their property.
These guidelines help to ensure that all homeowners in the community abide by the same set of rules, creating a more pleasant and orderly neighborhood for everyone. It’s important to note, however, that the CC&Rs cannot override federal or state laws.
Articles Of Incorporation
Homeowners' associations are formed similarly to business corporations. Therefore, they must file articles of incorporation with the state which bear information such as an HOA location, name, and purpose.
The articles of incorporation spell out the purpose of the HOA and its powers and duties. They also specify how the HOA will be structured and governed, including how meetings will be conducted and how decisions will be made. The articles of incorporation can be amended by a vote of the homeowners.
Bylaws
Generally speaking, bylaws establish the rights and responsibilities of the association. Through a board of directors, an HOA declares its right to protect the community. Bylaws include rules and procedures about term limits, voting processes, and the election of directors.
Enforcing bylaws is often one of the most challenging tasks for an HOA. However, it is also one of the most important, as bylaws help to ensure that all residents can enjoy a peaceful and orderly community.
Rules And Regulations
The section talks about the interpretation and implementation of CC&R. The rules and regulations section of the HOA governing documents helps to ensure that everyone in the community understands what is expected of them and that everyone has the same opportunity to enjoy the amenities and common areas.
2. HOA's Official Records
Also known as official documents, a member is allowed to copy and review an HOA's official records. Here is a list of associated documents:
- HOA's community management records
- Board and members' minutes and meeting notices
- The developer's documents such as maps, land surveys, permits, and plans.
- Membership roster indicating members' telephone numbers, mailing addresses
- Documents about membership voting, the election of directors and officers, directors, and membership approvals such as notices, minutes, ballots, and proxies
- Copies of judgments, liens, or encumbrances recorded against or on behalf of the HOA
- Past-due assessment notices
- Recorded instruments related to properties owned by the HOA
- Architectural guidelines
- Age restrictions since some associations only allow a specific age group within the community
3. The Association's Financial Records for The Past Few Years
The HOA’s financial records essentially give you an overview of the number of fees you will be expected to contribute and how often you're required to do so. These records mainly entail:
- Records of expenditures and all receipts
- Association's members updated account ledgers indicating the member's name, amount, and the due date of annual assessments, payments made, and the outstanding balance
- The association's financial reports, audits, and reviews
- Contract records of work performed, including bids
- Invoices of purchases
4. The Association's Reserve Fund
An HOA reserve fund refers to money kept aside by the association for future repairs and other expenses. The reserve fund determines an association's ability to plan short and long-term activities such as building swimming pools and extensive renovations like getting new roofs for the community.
5. The Master Insurance Policy
The master insurance policy covers common areas and buildings against destruction. Reviewing it will help you understand the extent of protection against damage. It is essential to confirm all the details regarding the master policy to be certain of the coverage and determine whether you may need extra insurance.
HOA Documents Keep Your Community Running Smoothly
Familiarizing yourself with the HOA documents will help you avoid potential conflict and ensure that you are able to take full advantage of the amenities and services that are available to you.
By taking reviewing your HOA documents, you can safeguard your investment and enjoy a seamless transition into your new community.
Staff Writer
Jennifer Harvey
Mary Arnold, CMCA®, AMS®
