HOA governing documents can vary by jurisdiction.
These are likely to include Articles of Association, Bylaws, Declaration of CC&Rs, plus associated rules.
Let’s dive in!
What are HOA Governing Documents?
Articles of Association or Articles of Incorporation
The Articles of Incorporation establish the legal foundation of the HOA, outlining its name, location, and purpose.
This document is essential for creating the HOA and is usually filed by the original developer or the community residents. While the Articles themselves may not directly impact the day-to-day life of homeowners, they set the stage for how the HOA operates.
For instance, if a homeowner wants to understand the legal basis for the HOA’s existence or verify its official name and registered agent, they would refer to this document.
Moreover, the Articles ensure that the HOA is recognized as a legal entity, allowing it to enter into contracts, hold property, and perform other necessary functions to maintain and improve the community. Though homeowners might not consult the Articles regularly, they are a critical component of the HOA’s structure and legitimacy.
The ‘articles’, as they are often known, create the legal entity. This sets the HOA name and initial contact person. The articles may also set out some procedures as this document is typically a precursor to the bylaws.
Bylaws
HOA bylaws dictate the operational rules of the community, influencing many aspects of daily life.
For instance, bylaws often include details on voting rights and procedures, which determine how homeowners can participate in community decisions, such as electing board members or amending community rules. They outline the responsibilities of the board of directors, ensuring that elected officials adhere to specific duties like preparing financial statements or managing meeting protocols.
Homeowners might consult the bylaws to understand how meetings are called, how often they must be held, and the process for collecting dues or special assessments.
Additionally, the bylaws set policies for creating annual budgets and determining assessment obligations, providing transparency on how HOA funds are managed.
Familiarity with the bylaws can empower homeowners to understand their rights and the limitations of the HOA’s powers, fostering a well-informed and engaged community.
Bylaws describe the mechanics of HOA management. It’s a fairly boring document but one that you will read if you find yourself in a state of conflict with the board. It sets out notification and voting procedures, and should also describe record-keeping procedures and the roles of directors.
Declaration of CC&Rs
CC&Rs (Covenants, Conditions, and Restrictions) establish the standards and limitations for property use within the HOA, greatly impacting homeowners’ daily lives.
For example, CC&Rs often dictate property maintenance standards, specifying requirements for lawn mowing, exterior paint upkeep, and overall aesthetic consistency. These rules can also govern home decorations, both permanent and temporary, ensuring a uniform appearance throughout the community.
Pet restrictions, such as limits on certain dog breeds or the number of allowable pets, are commonly found in CC&Rs.
Parking regulations, including guest parking provisions, and guidelines for managing garbage and unsightly items also fall under CC&Rs.
Moreover, CC&Rs address architectural control, such as the installation of satellite dishes or antennas, ensuring that any modifications to properties align with the community’s overall design.
By setting these expectations, CC&Rs aim to maintain property values and promote a harmonious living environment, although they may also limit personal choices and individuality.
Commonly known as CC&Rs, these are the covenants, conditions and restrictions. CC&Rs set out the expectations on owners and residents as well as their guests. This is an important subject so we have a post on it here, and another post on common rules.
Recommended Reading: How Do I Find CC&R’s For My Property?
Records: Financial, Meeting Minutes & Reserve studies
Your HOA also keeps financial records (statements and budgets), minutes from board meetings and annual general meetings (AGMs). Finally, your HOA will fund reserve studies (also known as reserve reports) on common assets.
Financial records
HOA financial records play a crucial role in the financial transparency and stability of the community.
Audited annual financial statements provide homeowners with a comprehensive overview of the HOA’s financial status, ensuring accountability and accuracy in financial reporting.
Interim statements, whether prepared monthly or quarterly, offer regular updates on income and expenses, helping homeowners stay informed about the HOA’s financial performance throughout the year.
Budgets serve as a roadmap for how HOA dues will be utilized, detailing planned expenditures for various services, maintenance, and improvements within the community.
These financial documents enable homeowners to assess whether their dues are being managed effectively and if the HOA is adequately funding essential services and long-term projects, contributing to informed decision-making and community trust.
Annual financial statements should be audited; interim statements, which may be prepared monthly or quarterly, will not. Budgets are prepared to provide a clear indication to owners about how their dues will be spent.
Minutes
Minutes from board meetings and annual general meetings (AGMs) offer a detailed record of HOA governance and decision-making processes.
These minutes document who attended the meetings, what topics were discussed, and the outcomes of any votes or decisions made. For homeowners, reviewing meeting minutes provides insights into current issues, proposed projects, and ongoing concerns within the community. The AGM, open to all owners, addresses the budget, financial status, procedural matters, and allows homeowners to voice their concerns.
By staying informed through meeting minutes, homeowners can actively participate in shaping the direction of their HOA, ensuring that their voices are heard and their interests are represented in community governance.
Whenever there is a meeting of the board, minutes should be kept in accordance with the bylaws. Minutes set out who was present, what was discussed, and outcomes. The larger annual general meeting (AGM) is open to all owners. AGMs cover the budget, state of financial affairs, procedural matters, and other owner concerns. It is within minutes that most current, relevant issues about the health and harmony of the HOA are recorded so read them!
Reserve studies
Reserve studies are essential for long-term financial planning within an HOA, ensuring the community can fund necessary repairs and replacements of common assets.
These studies evaluate the expected lifespan and replacement cost of key infrastructure components such as roads, gates, parking facilities, clubhouses, tennis courts, and pools.
In condominium associations, reserve studies also cover assets like elevators, gyms, HVAC units, and the building envelope, including roofs, siding, and windows. By proactively assessing these capital items, HOAs can develop a funding strategy that reduces the likelihood of special assessments, which can place a significant financial burden on homeowners.
Properly funding reserves demonstrates a commitment to maintaining and improving community assets, protecting property values and enhancing the overall quality of life for residents.
A reserve study sets out the expected life and replacement cost of key common assets. This could include roads, gates, parking, a clubhouse, tennis court or pool. If you live in a condo assets like elevators, gym, HVAC units, and the building envelope (roof/siding/windows) would also be covered.
Do not underestimate the value of investing in infrastructure. If your HOA is fully funding the repair and replacement of capital items, it reduces the likelihood of a special assessment.
Recommended Reading: What are the HOA Documents You Need for Closing?
The Importance of HOA Governing Documents
HOA governing documents are the bedrock of a well-managed and smoothly functioning homeowners association.
These documents, including the articles of incorporation, bylaws, and CC&Rs, provide a legal and operational framework that dictates how the community is governed. They establish the rights and responsibilities of both the HOA and its members, ensuring that everyone understands their obligations and privileges.
By setting clear standards for property maintenance, architectural control, and community conduct, governing documents play a pivotal role in maintaining property values and fostering a harmonious living environment.
They also outline procedures for resolving disputes, enforcing rules, and making decisions, which helps to prevent conflicts and promote fair governance. Moreover, these documents ensure transparency and accountability in HOA operations, allowing homeowners to stay informed and participate in community affairs.
Without well-defined and consistently enforced governing documents, an HOA can become prone to mismanagement, discord, and declining property values.
Finding Governing Documents
To access your HOA’s governing documents, start by contacting your HOA management or board of directors. They should be able to provide you with copies of the Articles of Incorporation, Bylaws, CC&Rs, and any other relevant rules and regulations.
Many HOAs also maintain a website or online portal where these documents can be downloaded. If you are unable to obtain the documents directly from the HOA, you can typically find them recorded in the county’s public records office.
Visit the county clerk’s office or access their online database to search for the documents associated with your HOA. When searching, use the HOA’s legal name or the name of the community to locate the relevant records. Keep in mind that there may be fees associated with obtaining copies of documents from the county.
Having easy access to these documents ensures that homeowners can stay informed about their rights and responsibilities within the community.
HOA governing documents may seem dull, but are important so pay attention when buying.
Want to learn more about your HOA?